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

Answer: (d)

The Tenth Finance Commission was incorporated in the year 1995 consisting of Shri Krishna Chandra Pant as the Chairman. The operational duration of the Commission was 1995-2000.

Note : The chairman of 14th and current finance commission is former RBI governor Y.V.Reddy.

Answer: (d)

The gap between poor and rich will be wide and it must be increase when their investment lean towards capital sector. They only prefer profit.

Answer: (c)

Open Market Operations (OMO) is the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system.

Purchases inject money into the banking system and stimulate growth while sales of securities do the opposite.

Answer: (d)

A scheduled bank, in India, refers to a bank that is listed in the 2ndSchedule of the Reserve Bank of India Act, 1934.

Banks not under this Schedule are called non-scheduled banks. Scheduled banks are usually private, foreign, and nationalized banks operating in India.

Answer: (d)

Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form of gold or government approved securities before providing credit to the customers.

An increase in SLR practically restricts lending, thus controlling credit in the country. In India, the RBI can increase the Statutory Liquidity Ratio to contain inflation, suck liquidity in the market, to tighten the measure to safeguard the customers’ money.