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

Answer: (d)

Fourth Five-Year Plan was from 1969 to 1974. At this time Indira Gandhi was the Prime Minister. The Indira Gandhi government nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture.

Answer: (b)

In the calculation of GNP, we include the money value of goods and services produced by nationals outside the country.

Hence, income produced and received by nationals of a country within the boundaries of foreign countries should be added to the Gross Domestic Product (GDP) of the country.

Similarly, income received by foreign nationals within the boundary of the country should be excluded from GDP.

Answer: (b)

Inflation in India is measured on the Wholesale Price Index (WPI). The wholesale price index (WPI) is based on the wholesale price of a few relevant commodities or over commodities available.

The base year used for comparing is 2004–05 and uses 676 items. The indicator tracks the price movement of each commodity individually. Based on this individual movement, the WPI is determined through the averaging principle.

Answer: (a)

Answer: (d)

Monetary policy is the process by which the monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth.

In India, the central monetary authority is the Reserve Bank of India (RBI). It is so designed to maintain price stability in the economy.