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

Answer: (d)

The immediate effect of devoting a larger share of national output to investment is that the economy devotes a smaller share to consumption; that is, “living standards” as measured by consumption fall. The higher investment rate means that the capital stock increases more quickly, so the growth rates of output and output per worker rise.

According to Smith, in a developing economy, both income level and capital stock rise. In addition to this, the rate of capital accumulation also shows a tendency to increase.

This leads to an increase in the capital stock in successive periods as investment keeps on increasing. Another important factor that contributes to the progress of an economy is the successive decline in the incremental capital-output ratio due to the influence of capital on the productivity of labour.

Answer: (d)

The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established on 12 April 1992 through the SEBI Act, 1992. Initially, SEBI was a non-statutory body without any statutory power.

However, in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act 1992.

In April 1998 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

Answer: (d)

The one rupee note is issued by the Ministry of Finance and it bears the signature of the Finance Secretary, while other notes bear the signature of Governor RBI.

However, only RBI is the only source of legal tender money because the distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as an agent of the Government.

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

Answer: (c)

Both A and R are true and R gives correct explanation of A. It believes in universalism and globalism.

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.