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

Answer: (b)

In the calculation of GNP, we include the money value of goods and services produced by nationals outside the country.

Hence, income produced and received by nationals of a country within the boundaries of foreign countries should be added to the Gross Domestic Product (GDP) of the country.

Similarly, income received by foreign nationals within the boundary of the country should be excluded from GDP.

Answer: (b)

Inflation in India is measured on the Wholesale Price Index (WPI). The wholesale price index (WPI) is based on the wholesale price of a few relevant commodities or over commodities available.

The base year used for comparing is 2004–05 and uses 676 items. The indicator tracks the price movement of each commodity individually. Based on this individual movement, the WPI is determined through the averaging principle.

Answer: (a)

Answer: (a)

GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer.

Products like kerosene, naphtha and LPG will be under the ambit of GST, while five items in the basket — crude oil, natural gas, aviation fuel, diesel and petrol — have been excluded during the initial years.

Answer: (d)

IDBI Bank Limited is an Indian financial service company headquartered in Mumbai, India. RBI categorised IDBI as an “other public sector bank”. It was established in 1964 by an Act of Parliament to provide credit and other facilities for the development of the fledgling Indian industry.

The Industrial Development Bank of India (IDBI) was established on 1 July 1964 under an Act of Parliament as a wholly-owned subsidiary of the Reserve Bank of India.

On 16 February 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in the country.

Answer: (b)

Devaluation is a deliberate downward adjustment to the value of a country’s currency, relative to another currency, group of currencies.

Since it is relative to other currencies so the internal price remains unchanged. It causes a country’s exports to become less expensive and imports more expensive.