introduction to indian economy section 7 MCQ Questions & Answers Detailed Explanation

Answer: (d)

Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form of gold or government approved securities before providing credit to the customers.

An increase in SLR practically restricts lending, thus controlling credit in the country. In India, the RBI can increase the Statutory Liquidity Ratio to contain inflation, suck liquidity in the market, to tighten the measure to safeguard the customers’ money.

Answer: (d)

The income approach equates the total output of a nation to the total factor income received by residents or citizens of the nation.

The main types of factor income are:

1. Employee compensation (cost of fringe benefits, including unemployment, health, and retirement benefits);
2. Interest received net of interest paid;
3. Rental income (mainly for the use of real estate) net of expenses of landlords; and
4. Royalties paid for the use of intellectual property and extractable natural resources.

All remaining value-added generated by firms is called the residual or profit. If a firm has stockholders, they own the residual, some of which they receive as dividends.

Profit includes the income of the entrepreneur - the businessman who combines factor inputs to produce a good or service.

Answer: (c)

Himayat is a training-cum-placement programme for unemployed youth in Jammu and Kashmir. Under the program, the youth of the state will be provided short-term training for at least 3 months, in a range of skills for which there is good market demand.

The scheme aims to train 1,00,000 youth in 5 years and provide at least 75% of them with jobs.

Answer: (c)

Open Market Operations (OMO) is the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system.

Purchases inject money into the banking system and stimulate growth while sales of securities do the opposite.

Answer: (d)

The gap between poor and rich will be wide and it must be increase when their investment lean towards capital sector. They only prefer profit.

Answer: (d)

The Tenth Finance Commission was incorporated in the year 1995 consisting of Shri Krishna Chandra Pant as the Chairman. The operational duration of the Commission was 1995-2000.

Note : The chairman of 14th and current finance commission is former RBI governor Y.V.Reddy.