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

Answer: (a)

The gems and jewellery sector is a major foreign exchange earner. At present, gems and jewellery is the second largest foreign exchange earner in the country surpassing even what was earned by the textile and apparel sector.

The countries where demand is increasing for Indian jewellery include the UAE, the US, Russia, Singapore, Hong Kong, Latin America and China.

Answer: (a)

Since independence, India’s economic development has been guided by the twin objectives

1. a rapidly and technologically progressive economy by democratic means; and
2. a social order based on justice, offering equal opportunity to every citizen of the country.

Answer: (d)

Damodar Valley Corporation is a thermal and hydropower generating public organization of India. It emerged as a culmination of attempts made over a whole century to control the wild and erratic Damodar River.

By April 1947, a full agreement was practically reached between the three Governments of Central, Bengal and Bihar on the implementation of the scheme and in March 1948, the Damodar Valley Corporation Act (Act No. XIV of 1948) was passed by the Central Legislature, requiring the three governments – the Central Government and the State Governments of West Bengal and Bihar (now Jharkhand) to participate jointly for the purpose of building the Damodar Valley Corporation.

The Corporation came into existence on 7 July 1948 as the first multipurpose river valley project and the first Public Sector Corporation of independent India.

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: (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: (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.”