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

Answer: (d)

In 1976, Government of India launched a plan scheme called “Economic Census and Surveys”. In 1977 Central Statistical Organisation conducted First economic census in collaboration with the Directorate of Economics & Statistics (DES) in the States/Union Territories. Current Economic Census is Sixth Economic Census held in 2013.

The Central Statistics Office (CSO) in the Ministry of Statistics and Programme Implementation (MOSPI) conducted the Sixth Economic Census during January, 2013 to April, 2014 in collaboration with Directorates of Economics and Statistics in all the States and Union Territories.

Answer: (c)

Rashtriya Ispat Nigam Ltd (RINL), on 23 September 2014, filed a draft prospectus with market regulator SEBI for an initial public offering (IPO) through which the government will sell 10 per cent of its stake in the company.

The government proposes to raise Rs 43,425 crore through disinvestment in PSUs.

Answer: (d)

The Central Bank uses Quantitative control to regulate the volume of total credit. Quantitative methods are:

1. Manipulation of Bank Rate;
2. Open market operations;
3. Manipulation of Cash reserve ratio;
4. Repo & Reverse Repo; and
5. Altering Statutory Liquidity Ratio.

Moral persuasion and direct action is a qualitative method.

Answer: (d)

A value-added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price.

From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. Being a consumption tax, VAT is usually used as a replacement for sales tax.

Ultimately, it taxes the same people and businesses the same amounts of money, despite its internal mechanism being different. This means that, without special measures, goods that are imported from one country that does have VAT to another country that does not have VAT will be taxed twice.

The exporting country will charge VAT and the importing country will charge sales tax.

Answer: (c)

Inflation increased steadily during 2008, reaching 8.75% by the end of May and in June when this jumped to 11% then there was an alarming increase in the prices.

There were many reasons for it but one of the main driving forces was a reduction in government fuel subsidies, which lifted gasoline prices by an average of 10%.In July 2008, the key Indian Inflation Rate

i.e. the Wholesale Price Index touched the mark of 12.6%, the highest rate in the past 16 years of Indian history. This was almost three times the RBI‘s target of 4.1% and almost doubled as compared to 2007.

This continuous rise slipped back to 12.4% by mid-August in 2008.