introduction to indian economy section 6 MCQ Questions & Answers Detailed Explanation

Answer: (a)

Answer: (a)

The Voluntary Severance Scheme (VSS) is popularly known as Golden Hand Shake. It is a stipulation in an employment agreement that states that the employer will provide a significant severance package if the employee loses their job.

A golden handshake is usually provided to top executives for loss of employment through layoffs, firing or even retirement.

Answer: (a)

Headline inflation also called WPI inflation is a measure of the total inflation within an economy and is affected by areas of the market which may experience sudden inflationary spikes such as food or energy.

As a result, headline inflation may not present an accurate picture of the current state of the economy as it doesn’t take account of the service sector.

Answer: (d)

While the Reserve Bank of India (RBI) has the authority to issue banknotes of denominational values of Rs.2, Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500, Rs.1,000, Rs.5,000 and Rs.10,000, the one rupee note was printed and issued by the central government.

The Government of India also has the sole right to mint coins of all denominations.

Answer: (b)

Answer: (d)

The definition of deficit financing is likely to vary with the purpose for which such a definition is needed.

In one sense by deficit financing we mean the excess of government expenditure over its normal receipts raised by taxes, fees, and other sources. In this definition such expenditure whether obtained through borrowing or from the banking system measures the budget deficit. Deficit financing is said to have been used whenever government expenditure exceeds its receipts. In under-developed countries deficit financing may be in two forms:

1. Difference between overall revenue receipts and expenditure
2. Deficit financing may be equal to borrowing from the banking system of the country.