introduction to indian economy section 2 MCQ Questions & Answers Detailed Explanation

Answer: (c)

The System of Memorandum of Understanding was introduced in the Public Sector Enterprises during the year 1987-88 in India. It was based on the report of the Arjuna Sengupta Committee (1984).

Answer: (b)

Only statement 2 is correct.

Statements 1 & 3 are wrong.

Answer: (c)

The rising population can be a virtue or can be vice with regards to the economic development of a country.

In India, the demerits of population growth outweigh its merits. Due to the large population size and its rate of growth, our per capita income continues to be stagnant at a low level. Since First Five Year Plan, our national income has increased about 11 times but our per capita income has increased only about three and half times, thanks to the rise in population.

Also, large population size has tended to reduce the landman ratio in India which reduces the productivity of land and labour. The growing population has also reduced the per capita availability of cereals and pulses.

Further, due to the high growth rate of the population, unemployment is assuming monstrous proportions. Lack of employment opportunities outside agriculture builds pressure on farming as a source of subsistence. Consequently, disguised unemployment in the farming sector is emerging as a serious challenge.

Answer: (c)

Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time.

The United Nations Conference on the Law of the Sea has defined sovereign rights over international waters by defining such concepts as Internal Waters, exclusive economic zones (EEZs), continental shelf jurisdiction, etc. According to this law, the income generated by Indian fishermen would be accounted for in the GDP of India.

Answer: (a)

Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a year.

GDP can be determined in three ways: the production (or output) approach, the income approach, or the expenditure approach.

Answer: (c)

The Second Plan between years 1956-1961 was focused on the development of India by establishing heavy industries under the public sector.

The total money allotted for this 5-year plan was 48 Billion rupees. The plan followed the Mahalanobis model of economic development.