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

Answer: (e)

The Reserve Bank of India (RBI), on 25 October 2011, deregulated savings bank deposit interest rates, leaving it to the banks to select their own interest rates.

However, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit.

Besides, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses.

Answer: (a)

National Income is based on the production of goods and services.

A variety of measures of national income and output are used in economics to estimate,

1. total economic activity in a country or region,
2. including gross domestic product (GDP),
3. gross national product (GNP),
4. net national income (NNI), and
5. adjusted national income (NNI* adjusted for natural resource depletion).

All are especially concerned with counting the total amount of goods and services produced within some “boundary”.

Answer: (b)

National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of a one-year duration, as a year is neither too short nor long a period. National product is usually used synonymously with National income.

The Central Statistical Organization defines National income as “National Income is the sum of factor income earned by the normal residents of a country in the form of wages, rent, interest and profit in an accounting year.”

Answer: (d)

The principal source of States own tax revenues is sales tax which accounts for about 60 per cent of the total. The other major components of States own tax revenues according to their revenue share are State excise, registration and stamp duty, motor vehicle and passenger tax, electricity duty, land revenues, profession tax, entertainment taxes and other sundry taxes.

Answer: (b)

Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society.

For financial inclusion 'Know your customer' norms should be relaxed and no-frills account should be opened for low-income segments which are looking for basic banking only.

Along with general-purpose credit cards should be issued and bank branches should be opened in unbanked rural areas.

Answer: (b)

The economic liberalisation in India refers to ongoing economic reforms in India that started on 24 July 1991.

In 1991, the government of P. V. Narasimha Rao and his finance minister Manmohan Singh (currently the Prime Minister of India) started breakthrough reforms which included opening for international trade and investment, deregulation, initiation of privatization, tax reforms, and inflation controlling measures.