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

Answer: (c)

National Income is one of the basic concepts in macroeconomics. National Income means the total income of the nation. The aggregate economic performance of the whole economy is measured by the national income data.

National Income refers to the money value of all final goods and services produced by the normal residents of a country while working both within and outside the domestic territory of a country in an accounting year. National Income also includes net factor income from abroad.

Symbolically, Y = PG + PS,

where, Y = National Income;
P = Price;
G = Goods; and
S = Service.

Answer: (d)

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous, statutory agency tasked with regulating and promoting the insurance and re-insurance industries in India. It was constituted by the Insurance Regulatory and Development Authority Act, 1999.

Answer: (d)

Answer: (d)

A value-added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price.

From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. Being a consumption tax, VAT is usually used as a replacement for sales tax.

Ultimately, it taxes the same people and businesses the same amounts of money, despite its internal mechanism being different. This means that, without special measures, goods that are imported from one country that does have VAT to another country that does not have VAT will be taxed twice.

The exporting country will charge VAT and the importing country will charge sales tax.

Answer: (d)

The Central Bank uses Quantitative control to regulate the volume of total credit. Quantitative methods are:

1. Manipulation of Bank Rate;
2. Open market operations;
3. Manipulation of Cash reserve ratio;
4. Repo & Reverse Repo; and
5. Altering Statutory Liquidity Ratio.

Moral persuasion and direct action is a qualitative method.

Answer: (c)

Rashtriya Ispat Nigam Ltd (RINL), on 23 September 2014, filed a draft prospectus with market regulator SEBI for an initial public offering (IPO) through which the government will sell 10 per cent of its stake in the company.

The government proposes to raise Rs 43,425 crore through disinvestment in PSUs.