introduction to indian economy section 13 MCQ Questions & Answers Detailed Explanation

Answer: (a)

A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves, and that is commonly used in international transactions for commodities, like oil and gold.

Persons who live in a country that issues a reserve currency can purchase imports and borrow across borders more cheaply than persons in other nations because they need not exchange their currency to do so.

Answer: (d)

Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function.

The term typically refers to the technical structures that support a society, such as roads, bridges, water supply, sewers, electrical grids, telecommunications, and so forth, and can be defined as “the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions.”

Viewed functionally, infrastructure facilitates the production of goods and services, and also the distribution of finished products to markets, as well as basic social services such as schools and hospitals;

For example, roads enable the transport of raw materials to a factory.

So an investment in infrastructure does not include the automobile industry which is a capital-based industry.

Answer: (d)

Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy.

The two main instruments of fiscal policy are government taxation and changes in the level and composition of taxation and government spending can affect the following variables in the economy:

1. Aggregate demand and the level of economic activity;
2. the pattern of resource allocation; and
3. the distribution of income.

Answer: (b)

C.D. Deshmukh was the first Indian to be appointed as the Governor of the Reserve Bank of Indian in 1943.

He subsequently served as the Finance Minister in the Union Cabinet (1950–1956). He was a civil servant by profession.

Answer: (d)

Generally, per capita income is the indicator of the progress of any country. According to World Development Report 2009, the per capita income of India was $950. Goa has the highest per capita income in India.

Goa leads the country with a per capita income of Rs.1,92,652. Delhi comes in second after Goa with PCI of Rs.1,75,812 followed by Chandigarh (1,28,634 – 2011) & Haryana (1,09,227).

Note: According to recent data given by the Ministry of Statistics and Programme Implementation, Goa has the highest NSDP per capita among 33 Indian states and union territories.

NSDP per capita of Goa is estimated at 224,138 Indian rupees in 2013-14 at current prices. The ranking of Delhi is two with a per capita income of around 212,219 INR. Sikkim is third, Chandigarh is fourth and Puducherry is the fifth richest economy of India.

Bihar, Uttar Pradesh, Manipur, Assam, and Jharkhand is top 5 poorest state in terms of NSDP per capita. These five states have net state domestic product per capita below Rs.50,000.

Answer: (b)

All the above given terms are not a financial term. RTGS (Real Time Gross Settlement) is fund transfer system, core banking solutions like treasury and investment are all processes not financial term.