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
(a) Direct credit in desirable direction
(b) Boost economic development
(c) Control inflationary pressure
(d) Ensure social justice
The correct answers to the above question in:
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.
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Question : 1
What does the term ‘Green shoots’ represent in an Economy?
a) signs of economic recovery during an economy downturn
b) signs of growth of agriculture sector in a declining economy
c) signs of growth of agriculture sector in a growing economy
d) signs of economic decline in a developed economy.
Answer »Answer: (a)
Green shoots is the first signs of an improvement in an economy that is performing badly. It was first used in this sense by Norman Lamont, the then Chancellor of the Exchequer of the United Kingdom, during the 1991 recession.
Question : 2
For the Assertion (A) and Reason (R) below. Choose the correct alternative.
Assertion (A): The emergence of economic globalism does not imply the decline of socialist ideology.
Reason (R): The ideology of socialism believes in Universalism and globalism.
Which one of the following is correct?
a) Both A and R are true but R is not the correct explanation of A.
b) A is true but R is false.
c) Both A and R are true and R is the correct explanation.
d) A is flase but R is true.
Answer »Answer: (c)
Both A and R are true and R gives correct explanation of A. It believes in universalism and globalism.
Question : 3
The Report of Vijay Kelkar Committee relates to
a) Centre-State Financial Relations
b) Trade Reforms
c) Disinvestment in Public Sector Enterprises
d) Tax Reforms
Answer »Answer: (d)
Vijay Kelkar, former finance secretary and advisor to the finance minister almost a decade ago, was mandated by the finance minister to give a report outlining a roadmap for fiscal consolidation. Kelkar, who headed the 13th Finance Commission, was told to present a fiscal road map for the medium term
Question : 4
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 : 5
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 : 6
Consider the following statements:
- 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
Answer »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.
GET Introduction to Indian Economy PRACTICE TEST EXERCISES
introduction to indian economy section 1
introduction to indian economy section 2
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