introduction to indian economy section 10 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Indian Economy topic of indian economy mcq
- Devaluation is an activity conducted by the Central government whereas depreciation happens due to market forces.
- In both the devaluation and depreciation, the currency loses value against other currencies in a floating currency exchange market.
(a) 1 and 2 both
(b) 2 only
(c) 1 only
(d) None
The correct answers to the above question in:
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.
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Question : 1
What is the extent of change of the literacy rate envisaged by the end of the Xth Five Year Plan ?
a) From 60% to 70%
b) From 65% to 75%
c) From 50% to 55%
d) From 45% to 50%
Answer »Answer: (b)
The Tenth Five-Year Plan (2002–2007) envisaged attainment of 8% GDP growth per year; reduction of poverty ratio by 5 percentage points by 2007; and reduction in gender gaps in literacy and wage rates by at least 50% by 2007.
It set the goal that the rate of literacy must be increased by at least 75%, within the tenure of the Tenth Five Year Plan.
Question : 2
The Minimum Alternative Tax (MAT) was introduced in the budget of the Government of India for the year?
a) 1992-93
b) 1995-96
c) 1991-92
d) 1996-97
Answer »Answer: (d)
The Minimum Alternative Tax (MAT) was introduced for the first time in the Budget for the year 1996-97.
Minimum alternate tax or MAT is a tax levied on firms/ companies or limited liability partnerships (LLPs) making abundant profits as well as distributing dividends to its shareholders who leveraging on the features of the Indian Taxation system do not contribute towards the government’s taxation kitty.
Thus, for such corporates, a minimal tax amounting to some fixed percentage of book profits i.e. profits according to accounting records is charged as minimal alternative tax (MAT).
Question : 3
From which of the following banks did Madan Mohan Malaviya take loans for financing “The Hindustan Times” ?
a) Bank of Maharashtra
b) Punjab National Bank
c) Bank of Baroda
d) State Bank of India
Answer »Answer: (b)
Madan Mohan Malaviya raised Rs.50,000 rupees to acquire the Hindustan Times along with the help of nationalist leaders Lajpat Rai and M. R. Jayakar and industrialist G. D. Birla, who paid most of the cash. Due to involvement of Lala Lajpat Rai with Punjab National Bank. Malaviya received much needed funds from the bank to revive the paper.
Question : 4
Consider the following statements:
- Government disinvesting its share in various public sector undertakings
- Process of disinvestment is very fast
- Process of disinvestment is very slow and government always falls short of target
a) I and III
b) I and II
c) Only I
d) I, II and III
Answer »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.
Question : 5
In an economy, the sectors are classified into public and private on the basis of
a) nature of economic activities
b) use of raw materials
c) ownership of enterprises
d) employment condition
Answer »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.
Question : 6
Which among the following equation is correct
- GDP = GNP + X - M
- GNP = GDP + X – M
- GNP = GDP + NFIA
- NNP = GNP – Depreciation.
a) 1, 2 and 3
b) 2, 3 and 4
c) 1 and 2
d) 1, 3 and 4
Answer »Answer: (b)
X = Income from Abroad (income earned and received by nationals within the boundaries of foreign countries).
M = Income received by foreign nationals within the country.
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