introduction to indian economy section 7 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Indian Economy topic of indian economy mcq
(a) increases the strength of the banks
(b) increases supply of cash
(c) provides funds to the state
(d) restricts lending
The correct answers to the above question in:
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.
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Read more introduction Based Indian Economy Questions and Answers
Question : 1
Which one of the following is not included while estimating national income through income method?
a) Mixed incomes
b) Rent
c) Pension
d) Undistributed profits
Answer »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:
- Employee compensation (cost of fringe benefits, including unemployment, health, and retirement benefits);
- Interest received net of interest paid;
- Rental income (mainly for the use of real estate) net of expenses of landlords; and
- 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.
Question : 2
“Himayat” is a training cumplacement programme for unemployed youth in the State of
a) Punjab
b) Haryana
c) Jammu and Kashmir
d) Himachal Pradesh
Answer »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.
Question : 3
If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits
a) will increase
b) will neither increase nor decrease
c) will decrease
d) None of the above
Answer »Answer: (b)
It will remain the same, because banks do not increase the national income. So it remains the same immaterial whether banks are there or not.
Question : 4
Scheduled bank is a bank which is
a) Not Nationalised
b) Nationalised
c) Based in foreign Country
d) Included in the second schedule of RBI
Answer »Answer: (d)
A scheduled bank, in India, refers to a bank that is listed in the 2ndSchedule of the Reserve Bank of India Act, 1934.
Banks not under this Schedule are called non-scheduled banks. Scheduled banks are usually private, foreign, and nationalized banks operating in India.
Question : 5
What does the open market operation of the RBI mean ?
a) Auctioning of foreign exchange
b) Buying and selling shares
c) Trading is securities
d) Transactions in gold
Answer »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.
Question : 6
One of the reasons for India’s occupational structure remaining more or less the same over the years has been that :
- invest pattern has been directed towards capital intensive industries
- productivity in agriculture has been high enough to induce people to stay with agriculture
- ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture
- people are largely unaware of the significance of transition from agriculture to industry for economic development
a) 4 only
b) None of the above
c) 2 and 3 only
d) 1 only
Answer »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.
GET Introduction to Indian Economy PRACTICE TEST EXERCISES
introduction to indian economy section 1
introduction to indian economy section 2
introduction to indian economy section 3
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introduction to indian economy section 5
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introduction to indian economy section 7
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introduction to indian economy section 10
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introduction to indian economy section 13
introduction to indian economy section 14
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