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

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.

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.

Answer: (a)

Inflation redistributes wealth from creditors to debtors i.e., lenders suffer and borrowers benefit out of inflation.

Bondholders = this person has lent money (to debtors) and received a bond in return.

So he is a lender, he suffers, by the way, they haven’t specifically used the word – “inflation-indexed bonds”, hence we cannot say inflation benefits the bond-holders.

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.

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.

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.