introduction to indian economy section 14 MCQ Questions & Answers Detailed Explanation

Answer: (c)

National Income is essentially what a country produces in a given year. It takes into account the value of all the goods and services in an economy.

The term is interchangeable with Gross Domestic Product (GDP) The services industry accounted for over 57% of India's gross domestic product in 2010- 2011 and is by far the largest.

Answer: (a)

The existence of a parallel economy or black money makes the monetary policies less effective.

A parallel economy, based on black money or unaccounted money, causes high circulation of money in the market and thus causes inflation etc.

Answer: (d)

Austerity describes policies used by governments to reduce budget deficits during adverse economic conditions.

These policies may include expenditure cuts, tax increases; this is done in an economic crisis situation to improve the credit rating of the countries going through adverse economic conditions.

Answer: (c)

Fiscal Deficit: When a government’s total expenditure exceeds the revenue that it generates (excluding money from borrowings).

Deficit differs from debt, which is an accumulation of yearly deficits.

Answer: (a)

Swachh Bharat is India’s biggest ever cleanliness campaign that was originally known as Nirmal Bharat Abhiyan and Total Sanitation Campaign from 1999 to 2012.

On 2 October 2014, the Nirmal Bharat Abhiyan campaign was relaunched as Swachh Bharat Abhiyan (Clean India Mission) which aims to eradicate open defecation by 2019.

Answer: (b)

Net National Product (NNP) of a country is GNP minus depreciation allowances.

NNP is the actual addition to the year’s wealth. While calculating GNP, we ignore depreciation of assets but in reality, the process of production uses up the fixed assets or there is some wear and tear or fixed assets by process of depreciation.

In order to arrive at NNP, we deduct depreciation from GNP.