introduction to indian economy section 2 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Indian Economy topic of indian economy mcq
- GDP is the total money value of all final goods and services produced within the geographical boundaries of the country during a given period of time.
- GNP refers to the money value of total output or production of final goods and services produced by the nationals of a country during a given period of time
(a) 2 only
(b) 1 and 2
(c) 1 only
(d) Neither 1 nor 2
The correct answers to the above question in:
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.
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Read more introduction Based Indian Economy Questions and Answers
Question : 1
Inflation in India is measured on which of the following indexes / indicators?
a) Consumer Price Index (CPI)
b) Wholesale Price Index (WPI)
c) Gross Domestic Product (GDP)
d) Cost of Living Index (CLI)
Answer »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.
Question : 2
As per the statistics on foreign debt at the end of March 2014, the ratio of long term debt and short term debt stands at—
a) About 81.5 : 18.5
b) About 61.5 : 29.5
c) About 70 : 30
d) About 80 : 20
Answer »Answer: (a)
Question : 3
Which of the following is not an objective of the monetary policy of the RBI ?
a) Direct credit in desirable direction
b) Boost economic development
c) Control inflationary pressure
d) Ensure social justice
Answer »Answer: (d)
Monetary policy is the process by which the monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth.
In India, the central monetary authority is the Reserve Bank of India (RBI). It is so designed to maintain price stability in the economy.
Question : 4
Which one of the following is not correct ?
a) Second Five Year Plan1956– 61
b) First Five Year Plan–1951–56
c) Third Five Year Plan–1961– 66
d) Fourth Five Year Plan–1966–71
Answer »Answer: (d)
Fourth Five-Year Plan was from 1969 to 1974. At this time Indira Gandhi was the Prime Minister. The Indira Gandhi government nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture.
Question : 5
The GST (Goods and Services Tax), recently passed by Government will be levied on which of the following products ?
a) Tobacco
b) Petroleum Crude
c) Natural Gas
d) Aviation Turbine Fuel
Answer »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.
Question : 6
Which of the following is apex bank for industrial loans ?
a) NABARD
b) RBI
c) ICICI
d) IDBI
Answer »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.
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