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) Reserve Bank of India
(b) Ministry of Finance in Centre
(c) State Bank of India
(d) Planning Commission of India
The correct answers to the above question in:
Answer: (a)
Monetary policy is the defining function of the central bank of a country. The Reserve Bank of India announces a set of measures of both short-term and structural nature in the two bi-annual statements on monetary and credit policy. These documents are normally released in April and October of each year.
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Question : 1
The volatility in the Indian share market is due to
- inflow and outflow of foreign funds.
- fluctuations in foreign capital markets.
- changes in the monetary policy.
a) 1 and 3
b) 1, 2 and 3
c) 1 and 2
d) 2 and 3
Answer »Answer: (b)
Question : 2
The Narasimham Committee (1991) on financial reforms proposed for establishment of a
a) Three tier hierarchy of the Banking structure
b) Four tier hierarchy of the Banking structure
c) Two tier hierarchy of the Banking structure
d) Unified control by the apex institutions
Answer »Answer: (b)
Two expert Committees were set up in the 1990s under the chairmanship of M. Narasimhan (an exRBI (Reserve Bank of India) governor).
The first Narasimhan Committee (Committee on the Financial System - CFS) was appointed by Manmohan Singh as India’s Finance Minister on 14 August 1991, and the second one (Committee on Banking Sector Reforms) was appointed by P. Chidambaram as Finance Minister in December 1997.
The 1991 committee submitted its report to the Finance Minister in November 1991 which was placed on the table of Parliament on December 17, 1991.
It recommended the introduction of a four-tier banking system in the country:
- tier: 3 or 4 International Banks;
- tier: 8 to 10 National Banks; .
- tier Regional Banks; and
- tier: Rural Banks.
Question : 3
Consider the following statements in regard to devaluation and depreciation of a currency:
- Devaluation is an activity conducted by the central government whereas depreciation happens due to market forces.
- In both, the devaluation and depreciation currency loses value against other currencies in a floating currency exchange market.
a) 2 only
b) Both 1 and 2
c) 1 only
d) Neither 1 nor 2
Answer »Answer: (c)
Devaluation happens in countries with a fixed exchange rate. In a fixed-rate economy, the government decides what its currency should be worth compared with that of other countries. The exchange rate can change only when the government decides to change it.
If a government decides to make its currency less valuable, the change is called devaluation. Depreciation happens in countries with a floating exchange rate. A floating exchange rate means that the global investment market determines the value of a country’s currency.
Question : 4
Consider the following statements about personal Income:
- Personal income is that income which is actually obtained by nationals.
- Personal Income = National income – undistributed profits of corporation – payments for social security provisions – corporate tax + government transfer payments + Business transfer payments + Net interest paid by government.
a) 2 only
b) 1 and 2
c) 1 only
d) Neither 1 nor 2
Answer »Answer: (b)
Personal income is a flow concept.It isthe income that is obtained by nationals. Personal income is obtained by subtracting corporate taxes and payments made for social securities provision from national income and adding to it government transfer payments, business transfer payments and net interest paid by the government.
Question : 5
Which of the following is the largest employer in India?
a) Posts and Telegraphs Department
b) Food Corporation of India
c) Indian Railways
d) Steel Authority of India
Answer »Answer: (c)
Indian Railways not just runs the world's third-largest railroad network but is also among the largest employers.
As in 2012, it is the world's seventh-largest employer in the world, according to Economist magazine, with over 1.4 million employees.
It is ranked as the largest employer after the US Defence Department, the Chinese army, Wal-Mart, China National Petroleum, State Grid of China and British health services.
Question : 6
Beginning from the Financial Year 2017–18 NITI Ayog plans to replace the 5 year plans with which of the following?
a) 10 year Vision Document
b) 5 year Vision Document
c) 15 year Vision Document
d) 20 year Vision Document
Answer »Answer: (c)
Abandoning the ancient concept of five-year plans that India has been following since 1951, the National Institution for Transforming India (NITI) Aayog has decided to come up with a 15-year vision document in tandem with global trends and economic growth.
Cleared by Prime Minister Narendra Modi in May 2016, the new blueprint will be implemented after the last of the five-year plans, the 12th (2012- 17) ends in 2017.
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introduction to indian economy section 13
introduction to indian economy section 14
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