introduction to indian economy section 9 MCQ Questions & Answers Detailed Explanation

Answer: (a)

Capital Intensive Industry refers to that industry that requires a substantial amount of capital for the production of goods. In the Capital Intensive Industries, the proportion of capital involved is much higher than the proportion of labour.

This is because the industrial structure and industry type require high-value investments in capital assets. On the basis of this standard, the iron and steel industry can be termed as a capital intensive industry.

Answer: (a)

Open market operation : When RBI buys/sells securities in open market, in case of OMO, first party permanently sells the Government security to second party. Second party is free to do whatever it wants with that security.

Answer: (a)

The Reserve Bank of India on 25 June 2015 extended the deadline for exchanging pre-2005 currency notes of various denominations, including Rs 500 and Rs 1,000, till December 31, 2015.

The rationale behind the move to withdraw banknotes printed prior to 2005 is to remove them from the market because they have fewer security features compared with banknotes printed after 2005.

Answer: (c)

In banking, excess reserves are bank reserves in excess of the reserve requirement set by a central bank. They are reserves of cash more than the required amounts.

Holding excess reserves has an opportunity cost if higher risk-adjusted interest can be earned by putting the funds elsewhere; the advantage of holding some funds in excess reserves is that doing so may provide enhanced liquidity and therefore the more smooth operation of the payment system.

Answer: (d)

Indian Economy grew by 8.6% and 9.3% in 2009-10 and 2010-11 before it plunged again into slow growth.

CPI has a high weightage for food. In India, during the mentioned period food grain production actually had gone up.

GAAR is kept in abeyance as of now.

Answer: (c)

According to the Reserve Bank of India, cooperative marketing is a cooperative association of cultivators formed primarily for the purpose of helping the members to market their products more profitably than is possible through private trade. Under the system of co-operative marketing whole responsibility of marketing is taken up by the farmers themselves, organized on a co-operative basis.

The area of operation of marketing society is usually fixed with reference to local conditions - area based or commodity-based. The commodity-based societies related to grapes, oranges, bananas, pomegranates, etc. have wider jurisdiction covering the major areas growing each crop.

There are societies at the producer’s level and they federate at the state or national level to deal with bigger markets including foreign markets for the export of their produce.