introduction to indian economy section 11 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (b)

The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line.

Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development. The scheme is a “giant step” towards achieving the directive principle in the Constitution.

Answer: (a)

Economics takes care of various needs and wants of life.

Answer: (d)

Provision of public goods like a defence which no private agency can be entrusted with.

Provision of merit goods - goods like education and housing - through policies that encourage the consumption of such goods and discourage the use of non-merit goods like cigarettes.

Poverty reduction is considered a prime responsibility of all modern governments, as the market caters to the needs of only those who can afford to pay, not of the poor.

Answer: (c)

An open market operation (also known as OMO) is an activity by a central bank to buy or sell government bonds on the open market. A central bank uses them as the primary means of implementing monetary policy.

The usual aim of open market operations is to control the short term interest rate and the supply of base money in an economy and thus indirectly control the total money supply.

This involves meeting the demand of base money at the target interest rate by buying and selling government securities, or other financial instruments.

Monetary targets, such as inflation, interest rates, or exchange rates, are used to guide this implementation.

Answer: (a)

Current account convertibility was first coined as a theory by the Reserve Bank of India in 1997 by the Tarapore Committee. Full capital account convertibility allows local currency to be exchanged for foreign currency without any restriction on the amount.