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

Answer: (d)

GDP at factor cost is GDP at market price minus indirect taxes plus subsidies. GDP at factor cost measure the value of output in terms of what it really costs to produce.

However, adjustments have to be made for government subsidies to firms that make up market prices purchasers pay so price plus subsidy represent the true income to the factor of production.

Therefore, We can value domestic output at prices received by producers after indirect taxes and subsidies have been taken into account.

Answer: (c)

Navratna was the title given originally to nine Public Sector Enterprises (PSEs) identified by the Government of India in 1997 as “public sector companies that have comparative advantages”, giving them greater autonomy to compete in the global market so as to “support [them] in their drive to become global giants”.

The number of PSEs having Navratna status has been raised to 16, the most recent addition being Oil India Limited.

The list of such companies is:

1. Bharat Heavy Electricals Limited;
2. Bharat Electronics Limited;
3. Bharat Petroleum Corporation Limited;
4. Hindustan Aeronautics Limited;
5. Hindustan Petroleum Corporation Limited;
6. Mahanagar Telephone Nigam Limited;
7. National Aluminium Company Limited;
8. National Mineral Development Corporation Limited;
9. Neyveli Lignite Corporation Limited;
10. Oil India Limited;
11. Power Finance Corporation Limited;
12. Power Grid Corporation of India Limited;
13. Rashtriya Ispat Nigam Limited;
14. Rural Electrification Corporation Limited;
15. Shipping Corporation of India Limited;
16. GAIL (India) Limited.

Answer: (a)

The first stage of stable or slow population growth:

The growth of the population was slow due to the high death rate which nullified the high birth rate. In this stage, these economies were primitive and primarily agrarian, with widespread illiteracy, poor sanitation and health care conditions, negligible knowledge of family planning and large family sizes which contributed to factors such as high fertility rate and high death rate.

In the period between the first and the second stages, the death rates start reducing and birth rates remain stable which brings an imbalance in the economy. Measures like diseases control, improving nutrition levels, and sanitation improvement are implemented to reduce death rates, but the measures for controlling birth rates are not implemented, which results in a population explosion. This required a period of transition for adjustment, thus bringing the second stage of transition.

The second stage of population explosions:

In this stage rise in income levels contributed to improvement in health care, education, disease control and so on which in turn contributed to reducing the death rates. This accelerated the growth of the population. The family size reduced and improved trade and economic conditions resulted in more food and better food habits which further helped the population to grow at a much higher rate than in the first stage. The demographic changes brought imbalances in the economy, creating conditions for further transition of society.

The third stage of low birth rates and low death rates:

Modernization and industrialization changed the living pattern in such nations, the rural population shifted to cities and family sizes were reduced to become nuclear families. The standard of living increased which further brought down mortality rates and birth rates. As a result, the growth of the population declined.

Answer: (b)

Both statements are correct.

Answer: (c)

Gilts are bonds issued by certain, national governments. The term is of British origin and originally referred to the debt securities issued by the Bank of England, which had a gilt (or gilded) edge.

Hence, they are called gilt-edged securities, or gilts for short. The term is also sometimes used in Ireland and some British Commonwealth Countries, South Africa and India.

The term “Gilt Account” is also a term used by the RBI of India to refer to a constituent account maintained by a custodian bank for maintenance and servicing of dematerialised Government Securities owned by a retail customer.

Answer: (a)

Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States.

There are taxes that are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in a proportion determined by the Parliament.

These taxes include:

1. Succession and Estate duty;
2. Terminal taxes on goods and passengers;
3. Taxes on railway freight and fares;
4. Taxes on transactions in stock exchanges and
5. future markets; and Taxes on sale and purchase of newspapers and advertisements therein.