introduction to indian economy section 1 MCQ Questions & Answers Detailed Explanation

Answer: (b)

The current account deficit is a measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services it exports. An increase in crude oil price and rise in services of import of oil, increase the current account deficit.

However, an increase in export software services will reduce the deficit.

Answer: (a)

India, among the countries, has the lowest GDP per capita.

GDP per capita is as follows-

1. India 1509 USD,
2. China 6959 USD,
3. Sri Lanka 3204 USD,
4. Indonesia 3510 USD.

Answer: (b)

India’s Trade Policy 2009-14 had a view to achieve a growth of 15% per annum in export rather than 25% per annum.

Answer: (d)

Ways and means advances (WMA) is a mechanism used by the Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments.

These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of the RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.

Answer: (a)

The Indian economy constitute of predominance of agriculture, low per capita income, massive unemployment.

Answer: (b)

After India gained independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the Prime Minister of India was established on 15 March 1950. Prime Minister Jawaharlal Nehru was the first chairman.