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

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: (a)

Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as non-agricultural production.

However, such a method can only be called a non-scientific method. The first person to adopt a scientific procedure in estimating the national income was Dr VKRV Rao in 1931.

Answer: (c)

Monetary policy is the process by which the monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth.

In India, the central monetary authority is the Reserve Bank of India (RBI). is so designed as to maintain the price stability in the economy.

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: (b)

Videsh Sanchaar Nigam Limited (VSNL) was the first Indian PSU to be listed in the New York Stock Exchange in 2000. The company operates a network of earth stations, switches, submarine cable systems, and value added service nodes to provide a range of basic and value added services.

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.