introduction to indian economy section 9 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Indian Economy topic of indian economy mcq
(a) Excise Duty
(b) Sales Tax
(c) Custom Duty
(d) Service Tax
The correct answers to the above question in:
Answer: (a)
Central Value Added Tax (CENVAT), popularly known as Central Excise Duty, is a duty on the manufacture/ production of goods in India. It is an adaptation of VAT, which came into force in the country in 1986 in the form of MODVAT (Modified Value Added Tax).
MODVAT was re-named as CENVAT on 1 April 2000.
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Read more introduction Based Indian Economy Questions and Answers
Question : 1
Fiscal policy in India is formulated by
a) Planning Commission
b) Reserve Bank of India
c) Finance Ministry
d) SEBI
Answer »Answer: (c)
Fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy. In India, the fiscal policy is formulated by the Union Ministry of Finance.
Fiscal policy is distinguished from monetary policy that deals with the money supply, lending rates and interest rates and is formulated by the Reserve Bank of India.
Question : 2
The ‘activity rate’ of an economy depends upon so many factors, such as :
- School leaving age
- Popularity of higher education
- Social customs
- Retirement age
a) 2 and 3
b) 2, 3 and 4
c) 1 and 2
d) 1, 2, 3 and 4
Answer »Answer: (d)
The labour force of an economy is known as the activity rate (also called the participation rate). It is shown in per cent and always as a proportion of an economy.
The concept of the ‘demographic dividend’ is related to this rate.
Question : 3
Which of the following ‘Public Undertakings’ has not been conferred with ‘Maharatna’ Status ?
a) BHEL
b) SAIL
c) ONGC
d) Coal India Limited
Answer »Answer: (a)
There are 5 Maharatna companies: Coal India Limited, Indian Oil Corporation Limited, NTPC Limited, Oil and Natural Gas Corporation Limited and Steel Authority of India limited. Bharat Heavy Electricals Limited (BHEL) is a navaratna company.
Question : 4
The term mixed economy denoted the existence of both
a) private and public sector
b) developed and under developed sector
c) heavy and small industry
d) rural and urban sector
Answer »Answer: (a)
The concept of a mixed economy evolved from the ideas of Keynes. The concept of a mixed economy means that both private enterprises and public enterprises coexist.
However, the condition attached is that the private enterprises must work for serving society rather than having only self-interest.
Further, private enterprises may not be allowed in every sector of the economy like area of national importance.
Question : 5
RBI’s deadline to exchange pre-2005 currency notes of Rs.500 and Rs.1000 is
a) December 31, 2015
b) January 1, 2015
c) April 1, 2015
d) March 31, 2015
Answer »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.
Question : 6
In the context of Indian economy, open market operations to :
- borrowing by scheduled banks from RBI
- lending by commercial banks to industry and trade
- purchase and sale of government securities by the RBI
- None of the above
a) 3 only
b) 4 and 1 only
c) 1 and 2 only
d) 2 and 3 only
Answer »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.
GET Introduction to Indian Economy PRACTICE TEST EXERCISES
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introduction to indian economy section 9
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introduction to indian economy section 14
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