introduction to indian economy section 13 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (b)

C.D. Deshmukh was the first Indian to be appointed as the Governor of the Reserve Bank of Indian in 1943.

He subsequently served as the Finance Minister in the Union Cabinet (1950–1956). He was a civil servant by profession.

Answer: (d)

The Government of India in February 2000, announced the National Population Policy (NPP) with the objectives,

1. The immediate objective is to address the unmet needs for contraception, health care infrastructure and basic reproductive and child health care.
2. The medium-term objective is to bring the Total Fertility Rate (TFR) to replacement levels of 2.1 by 2010.
3. The long-term objective is to achieve a stable population by 2045, at a level consistent with the requirement of sustainable economic growth, social development and environmental protection.

Answer: (a)

A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves, and that is commonly used in international transactions for commodities, like oil and gold.

Persons who live in a country that issues a reserve currency can purchase imports and borrow across borders more cheaply than persons in other nations because they need not exchange their currency to do so.

Answer: (d)

Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function.

The term typically refers to the technical structures that support a society, such as roads, bridges, water supply, sewers, electrical grids, telecommunications, and so forth, and can be defined as “the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions.”

Viewed functionally, infrastructure facilitates the production of goods and services, and also the distribution of finished products to markets, as well as basic social services such as schools and hospitals;

For example, roads enable the transport of raw materials to a factory.

So an investment in infrastructure does not include the automobile industry which is a capital-based industry.

Answer: (d)

Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy.

The two main instruments of fiscal policy are government taxation and changes in the level and composition of taxation and government spending can affect the following variables in the economy:

1. Aggregate demand and the level of economic activity;
2. the pattern of resource allocation; and
3. the distribution of income.