introduction to indian economy section 2 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (d)

Corporate Tax is a levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period.

Most countries tax all corporations doing business in the country on income from that country.

Answer: (d)

NABARD is the apex institution in the country that looks after the development of the cottage industry, small industry and village industry, and other rural industries.

Its other functions are:

1. to coordinate the rural financing activities of all institutions engaged in developmental work at the field level and maintain liaison with Government of India, State Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation;
2. to re-finance the financial institutions which finance the rural sector;
3. to regulate the cooperative banks and the RRB’s, etc.

NABARD’s refinance is available to;

1. State Co-operative Agriculture and Rural Development Banks (SCARDBs),
2. State Co-operative Banks (SCBs),
3. Regional Rural Banks (RRBs),
4. Commercial Banks (CBs) and
5. other financial institutions approved by RBI.

Answer: (b)

Net Factor Income from Abroad (NFIA) refers to income generated by nationals abroad in the form of wages, salaries, rent, interest, dividend and profit.

It has the following three components:

1. Net compensation of employees;
2. Net income from property i.e., rent, interest and income from entrepreneurship (that is, profits and dividends); and
3. Net retained earnings of the resident companies working in foreign countries.

Profits earned by Indian banks functioning abroad come under ‘income from entrepreneurship.’

Answer: (c)

The logo of the Reserve Bank of India comprises a tiger walking underneath a palm tree.

It is contended that the Reserve Bank of India copied the tiger and palm tree symbol from the gold Mohur issued by the East India Company in the 19th century.

The double Mohur of William IV had a nice reverse, which was a symbol of a Lion and a Palm tree. When RBI was created, it was decided that the reverse of Double Mohur, the Lion and Palm design should be used as the emblem of RBI.

The last-minute modification was made introducing Tiger instead of Lion.

Answer: (c)

The first person to adopt a scientific procedure in estimating the national income was Dr. VKRV Rao in 1931.