introduction to indian economy section 7 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 1

Who among the following has suggested migration to accrual accounting system from cash based accounting system in India?

a) D.N. Ghosh

b) C. Rangarajan

c) R.H. Patil

d) I.V. Reddy

Answer: (a)

Question : 2 [SSC CGL 2016]

Golden Hand Shake scheme is the name of

a) Voluntary Retirement Scheme

b) Retirement Scheme

c) One Rank One Pension Scheme

d) Private Sector Retirement Scheme

Answer: (a)

The Voluntary Severance Scheme (VSS) is popularly known as Golden Hand Shake. It is a stipulation in an employment agreement that states that the employer will provide a significant severance package if the employee loses their job.

A golden handshake is usually provided to top executives for loss of employment through layoffs, firing or even retirement.

Question : 3

Consider the following statements in regard to Headline inflation :

  1. It provides an accurate picture of the inflation in the country.
  2. It is affected by short term transitory effects on the prices of products.
Which of the statements given above is/are correct?

a) 2 only

b) Both 1 and 2

c) 1 only

d) Neither 1 nor 2

Answer: (a)

Headline inflation also called WPI inflation is a measure of the total inflation within an economy and is affected by areas of the market which may experience sudden inflationary spikes such as food or energy.

As a result, headline inflation may not present an accurate picture of the current state of the economy as it doesn’t take account of the service sector.

Question : 4 [SSC GL 2013]

Which of the following does not form a part of the foreign exchange reserves of India ?

a) SDRs

b) Gold

c) Foreign currency assets

d) Foreign currency and securities held by the banks and corporate bodies

Answer: (d)

Foreign-exchange reserves are assets held by central banks and monetary authorities, usually in different reserve currencies, mostly the United States dollar.

However, the term in popular usage commonly also adds gold reserves, special drawing rights (SDRs), and International Monetary Fund (IMF) reserve positions.

Question : 5 [SSC CGL 2016]

Disguised unemployment in India is mainly related to

a) Rural Area

b) Agricultural sector

c) Factory sector

d) Urban Area

Answer: (b)

Disguised unemployment exists where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero.

It is unemployment that does not affect aggregate output. When more people are engaged in a job than actually required, a state of disguised unemployment is created.

Disguised, or hidden, unemployment is primarily found in the agricultural and the unorganized sectors of rural India.

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