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

Answer: (c)

The first person to adopt a scientific procedure in estimating the national income was Dr. VKRV Rao in 1931.

Answer: (b)

The effect of a government surplus upon the equilibrium level of NNP (Net National Product) is substantially the same as an increase in consumption.

Answer: (d)

Infant mortality rate indicates the number of infant death under one years of age per 1000 live birth under one year of age.

Answer: (b)

Net Factor Income from Abroad (NFIA) refers to income generated by nationals abroad in the form of wages, salaries, rent, interest, dividend and profit.

It has the following three components:

1. Net compensation of employees;
2. Net income from property i.e., rent, interest and income from entrepreneurship (that is, profits and dividends); and
3. Net retained earnings of the resident companies working in foreign countries.

Profits earned by Indian banks functioning abroad come under ‘income from entrepreneurship.’

Answer: (d)

NABARD is the apex institution in the country that looks after the development of the cottage industry, small industry and village industry, and other rural industries.

Its other functions are:

1. to coordinate the rural financing activities of all institutions engaged in developmental work at the field level and maintain liaison with Government of India, State Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation;
2. to re-finance the financial institutions which finance the rural sector;
3. to regulate the cooperative banks and the RRB’s, etc.

NABARD’s refinance is available to;

1. State Co-operative Agriculture and Rural Development Banks (SCARDBs),
2. State Co-operative Banks (SCBs),
3. Regional Rural Banks (RRBs),
4. Commercial Banks (CBs) and
5. other financial institutions approved by RBI.

Answer: (d)

Corporate Tax is a levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period.

Most countries tax all corporations doing business in the country on income from that country.