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

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: (b)

Tata AIG General Insurance Company offers motor insurance, car insurance, auto insurance, travel insurance & health insurance services in India.

ICICI Prudential offers insurance for wealth plans, health, life insurance in India, term insurance plans, ULIPs, retirement solutions, pension plans, etc.

Bajaj Allianz presents Life Insurance, Car Insurance, Travel Insurance, Health Insurance, Term Insurance and Home Insurance.

HDFC Life Insurance is one of India’s leading private life insurance companies, which offers a range of individual & group insurance plans & policies. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India’s leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom.

Answer: (d)

Currency is most liquid, because you can use it as and when you want. Time deposit with bank (e.g. fixed deposit), are least liquid compared to savings/ demand deposit with banks and currency.

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 National Development Council (NDC) or the Rashtriya Vikas Parishad is the apex body for decision making and deliberations on development matters in India, presided over by the Prime Minister.

The functions of the Council are to prescribe guidelines for the formulation of the National Plan;

1. to consider the National Plan as formulated by the Planning Commission;
2. to consider important questions of social and economic policy affecting national development; and
3. to review the working of the Plan from time to time and to recommend such measures as are necessary for achieving the aims and targets set out in the National Plan.

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