introduction to indian economy section 10 MCQ Questions & Answers Detailed Explanation

Answer: (c)

In an economy, the sectors are classified into private and public on the basis of ownership. Private sector is owned and managed by proprietors and partnerships while the public sector is wholly owned and managed by government.

Answer: (a)

The government of India is divesting its share from public sector undertakings. Most of the government undertakings were incurring losses during the pre liberalization period.

Hence, after the introduction of a new economic policy in 1991, the government started downsizing its share in PSU. But the process of disinvestment is very slow due to a host of legal and political hurdles.

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.

Answer: (b)

National product at factor cost is equal to net domestic product at factor cost + Net factor Income from Abroad.

Answer: (b)

The State Bank of India traces its ancestry to British India when the Bank of Calcutta was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (1840) and the Bank of Madras (1843).

The Presidency banks amalgamated on 27 January 1921 as the Imperial Bank of India. On 1 July 1955, the Imperial Bank of India became the State Bank of India.

Answer: (c)

A large quantity of imports of India comes from OPEC countries like Saudi Arabia, Iran, Brazil, etc.

Normally, this group accounts for more than 25 per cent of India's imports. As per the Economic Survey 2011-2012, the United Arab Emirates and Saudi Arabia were the major exporters to India.

India's foreign trade with developing countries has been on the rise. The share of these countries in India's import trade has increased to over 31 per cent.