introduction to indian economy section 8 MCQ Questions & Answers Detailed Explanation

Answer: (b)

The Commission for Agricultural Costs and Prices (CACP), the government’s nodal agency to recommend the minimum price for farm commodities.

The Agricultural Prices Commission was set up in January 1965 to advise the Government on the price policy of major agricultural commodities with a view to evolving a balance and integrated price structure in the perspective of the overall needs of the economy and with due regard to the interests of the producer and the consumer.

Since March 1985, the Commission has been known as Commission for Agricultural Costs and Prices

Answer: (b)

Statutory liquidity ratio is the number of liquid assets such as precious metals (Gold) or other approved securities, which a financial institution must maintain as reserves other than the cash. The statutory liquidity ratio is a term most commonly used in India.

The objectives of SLR are to restrict the expansion of bank credit. They serve to augment the investment of the banks in government securities and ensure the solvency of banks.

Answer: (c)

Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to the farmers for their short-term credit needs for the cultivation of crops. This mainly helps farmers purchase inputs etc., during the cropping season.

The credit card scheme proposed to introduce flexibility to the system and improve cost efficiency. It was introduced in August 1998.

Answer: (d)

Inflation reflects a situation where the demand for goods and services exceeds their supply in the economy. Higher interest rates in low inflation means higher real returns not just on money, but on all other assets too. These higher real returns increases the allocation of investment.

Answer: (c)

Food production or agriculture is a primary activity of the economy making direct use of natural resources. This includes agriculture, forestry and fishing, mining, and extraction of oil and gas. This is contrasted with the secondary sector, producing manufactured and other processed goods, and the tertiary sector, producing services.

Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function.

The term typically refers to the technical structures that support a society, such as roads, bridges, water supply, sewers, electrical grids, telecommunications, and so forth.

Answer: (b)

India’s commercial export of power to Bangladesh commenced in October 2013 with the inauguration of the Bangladesh-India Power Transmission Centre at western Bherampura, near West Bengal.

India will export 500 MW of electricity daily to Bangladesh for 35 years.