Indian Economy GK Quiz-4

Indian Economy GK Quiz-4

Indian Economy Multiple Choice Questions (MCQs) Quiz for State and UPSC Civil Services Examinations. Objective Questions on Indian Economy for competitive examinations.

    61. What is known as the open market operation of the RBI ?

    (1) Buying and selling of stocks
    (2) Auctioning of foreign exchange
    (3) Trading in securities
    (4) Transactions in gold
    61. (3) OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.

    62. Which of the following functions as a controller of credit in India ?

    (1) The Central Government
    (2) The Reserve Bank of India
    (3) The State Bank of India
    (4) The Planning Commission
    62. (2) Credit Control is an important tool used by Reserve Bank of India, a major weapon of the monetary policy used to control the demand and supply of money (liquidity) in the economy. Central Bank administers control over the credit that the commercial banks grant. Such a method is used by RBI to bring “Economic Development with Stability”. It means that banks will not only control inflationary trends in the economy but also boost economic growth which would ultimately lead to increase in real national income with stability.

    63. When did the Rupee become a freely convertible currency on current account, in India ?

    (1) 2000 
    (2) 2001
    (3) 1994 
    (4) 1999
    63. (3) A currency is deemed convertible on the current account if it can be freely converted into other
    convertible currencies for purchase and sale of commodities and services. For example, if the rupee
    is convertible on the current account an Indian firm should be able to freely convert rupee into Yen (JPY) to purchase from a Japanese Company. Since August 20, 1994, the rupee has been made a freely convertible currency on current account.

    64. Antyodaya Programme is associated with

    (1) Liberation of bonded labour
    (2) Bringing up cultural revolution in India
    (3) Demands of textile labourers
    (4) Upliftment of the poorest of the poor
    64. (4) Antyodaya Anna Yojana (AAY) is a centrally sponsored scheme launched on December 2000 for one crore of the poorest families. It is on the lookout for the ‘poorest of the poor’ by providing them 35 kilos of rice and wheat at Rs.2 per kg.

    65. The Government resorts to devaluation of its currency in order to promote

    (1) national income
    (2) international goodwill
    (3) exports
    (4) savings
    65. (3) A country devalues its currency in order to promote exports. A key effect of devaluation is that it makes the domestic currency cheaper relative to other currencies. There are two implications of devaluation. First, devaluation makes the country’s exports relatively less expensive for foreigners. Second, the devaluation makes foreign products relatively more expensive for domestic consumers, thus discouraging imports. This may help to increase the country’s exports and decrease imports, and may therefore help to reduce the current account deficit. One typical example is Thailand in 1998 Asian financial crisis. The baht was pegged at 25 to the US dollar before the crisis. During the crisis, the slowdown in export growth caused Thailand to abandon the dollar peg and devalue its currency in order to promote exports.

    66. The basic regulatory authority for mutual funds and stock markets lies with the

    (1) Government of India
    (2) Reserve Bank of India
    (3) SEBI
    (4) Stock Exchange
    66. (3) The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. SEBI has to be responsive to the needs of three groups, which constitute the market: the issuers of securities; the investors; and the market intermediaries. It is entrusted with
    regulating the business in stock exchanges and any other securities markets; registering and regulating
    the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust
    deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers
    and such other intermediaries who may be associated with securities markets in any manner; registering
    and regulating the working of [venture capital funds and collective investment schemes], including mutual funds; etc.

    67. The Employment Guarntee Scheme, which is now an important component of the NCMP, was first introduced in which State ?

    (1) Kerala
    (2) Maharashtra
    (3) Andhra Pradesh
    (4) West Bangal
    67. (2) The Employment Guarantee Scheme (EGS) underlying the National Rural Employment Guarantee Act is by far one of the largest social safety-net programmes launched anywhere in the developing world. Maharashtra became the first state in India to guarantee work in 1979 following a severe drought. The EGS began in 1972 during the drought period. However, it received statutory basis in 1977 when the Maharashtra Legislative Assembly unanimously voted it as a law of the land. The law became operative from January 26, 1979 with the consent of the President of India.

    68. Identify the Navratna Company in the following

    (1) ICICI Bank 
    (2) Infosys
    (3) HPCL Ltd 
    (4) Air India
    68. (3) Navratna was the title given originally to nine Public Sector Enterprises (PSEs) identified by the
    Government of India in 1997 as “public sector companies that have comparative advantages”, giving
    them greater autonomy to compete in the global market so as to “support [them] in their drive to
    become global giants”. The number of PSEs having Navratna status has been raised to 16, the most
    recent addition being Oil India Limited. The list of such companies is: Bharat Heavy Electricals Limited; Bharat Electronics Limited; Bharat Petroleum Corporation Limited; Hindustan Aeronautics Limited; Hindustan Petroleum Corporation Limited; Mahanagar Telephone Nigam Limited; National Aluminium Company Limited; National Mineral Development Corporation Limited; Neyveli Lignite Corporation Limited; Oil India Limited; Power Finance Corporation Limited; Power Grid Corporation of India Limited; Rashtriya Ispat Nigam Limited; Rural Electrification Corporation Limited; Shipping Corporation of India Limited; GAIL (India) Limited.

    69. Which car has been the best seller in India in 2004-2005 ?

    (1) Maruti 800
    (2) Maruti Suzuki Alto
    (3) Tata Indica
    (4) Santro Xing
    69. (2) After beating the Maruti 800 over the second half of 2004, the Maruti Alto officially took the title of bestselling car in India over the Full Year 2005. Below the Alto at 102,970 units, the Hyundai Santro (aka Atos), built in India, took the 2nd spot over the period at 73,822 sales and the Tata Indica was 3rd with 70,267 sales.

    70. Consider the following statements :

    a. NTPC has diversified to hydropower sector
    b. Power Grid Corporation has diversified into telecom sector.
    Which of the statements below is correct ?
    (1) Only a 
    (2) Only b
    (3) Both of a and b
    (4) None of a and b
    70. (3) NTPC Limited is the largest Indian state-owned electric utilities company based in New Delhi, India. NTPC’s core business is engineering, construction and operation of power generating plants and
    providing consultancy to power utilities in India and abroad. The name of the Company “National Thermal Power Corporation Limited” was changed to “NTPC Limited” with effect from 28 October, 2005. The primary reason for this was the company’s foray into hydro and nuclear based power generation along with backward integration by coal mining. The Power Grid Corporation of India is an Indian state-owned electric utilities company headquartered in Gurgaon, India. Power Grid wheels about 50% of the total power generated in India on its transmission network. Power Grid has also diversified into Telecom business and established a telecom network of more than 25,000 km across the country.

    71. Which Indian company secured the highest export revenue from IT software and services during the past two years ?

    (1) TCS
    (2) Infosys Technologies Ltd.
    (3) Wipro Technologies Ltd.
    (4) Satyam Computer Services Ltd.
    71. (1) Tata Consultancy Services (TCS) is India’s top software services exporter. TCS is part of the Tata Group conglomerate that also manufactures cars and steel, and serves customers including Citigroup Inc and BP Plc. It is one of India’s most valuable companies and is the largest India-based IT services company by 2012 revenues.

    72. Match the Indian and foreign companies as joint ventures in the field of life insurance : 

    Indian Company
    A. Tata 
    B. ICICI Ltd.
    C. Bajaj Ltd. 
    D. HDFC Bank
    Foreign Company
    1. AIG
    2. Standard Life Insurance
    3. Prudential Life Insurance
    4. Allianz
    Codes :
    A B C D
    (1) 1 3 4 2
    (2) 2 4 3 1
    (3) 4 1 2 3
    (4) 3 4 1 2
    72. (1) Tata AIG General Insurance Company offers motor insurance, car insurance, auto insurance, travel insurance & health insurance services in India. ICICI Prudential offers insurance for wealth plan, health, life insurance India, term insurance plans, ULIPs, retirement solutions, pension plans, etc. Bajaj Allianz presents Life Insurance, Car Insurance, Travel Insurance, Health Insurance, Term Insurance and
    Home Insurance. HDFC Life Insurance is one of India’s leading private life insurance companies, which offers a range of individual & group insurance plans & policies. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India’s leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom.

    73. Which of the following is apex bank for industrial loans ?

    (1) RBI 
    (2) NABARD
    (3) ICICI 
    (4) IDBI
    73. (4) IDBI Bank Limited is an Indian financial service company headquartered Mumbai, India. RBI
    categorised IDBI as an “other public sector bank”. It was established in 1964 by an Act of Parliament to
    provide credit and other facilities for the development of the fledgling Indian industry. The Industrial
    Development Bank of India (IDBI) was established on 1 July, 1964 under an Act of Parliament as a
    wholly owned subsidiary of the Reserve Bank of India. In 16 February, 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in the country.

    74. What is the main function of Central Statistical Organisation (CSO) ?

    (1) Determination of money supply
    (2) Collection of estimates of national income
    (3) Collection of detail data regarding employment
    (4) Price determination
    74. (2) The Central Statistics Organization, established in 1951, is responsible for coordination of statistical activities in the country, and evolving and maintaining statistical standards. Its activities include National Income Accounting; conduct of Annual Survey of Industries, Economic Censuses and its follow up surveys, compilation of Index of Industrial Production, as well as Consumer Price Indices for Urban NonManual Employees, Human Development Statistics, Gender Statistics, imparting training in Official Statistics, Five Year Plan work relating to Development of Statistics in the States and Union Territories; dissemination of statistical information, work relating to trade, energy, construction, and environment statistics, revision of National Industrial Classification, etc.

    75. Planning and control are so related that

    (1) Planning initiates control
    (2) Control initiates planning
    (3) Both are equivalent
    (4) Both go on simulta-neously in cycle
    75. (4) Planning and control are two basic and interrelated managerial functions. They are so interrelated that they can be and often are considered as being one function. Planning is the preparation activity while control is the post-operation function. Both of them are so closely related that they are treated as Siamese twins. Planning sets the objectives, goals, targets on the basis of available resources with their given constraints. Control is the integral part of effective planning. Similarly control involves assessment of the performance, such assessment can be made effectively only when some standard of are set in advance.

    76. What does National Income mean?

    (1) The total value of all goods and services produced in the country during a period of one year
    (2) The total value of all stocks and shares in the country during a period of one year
    (3) The total value of all capital goods produced in the country during a period of one year
    (4) The total value of all consumer goods produced in the country during a period of one year
    76. (1) National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too
    short nor long a period. National product is usually used synonymous with National income. The Central Statistical Organization defines National income as “National Income is the sum of factor income earned by the normal residents of a country in the form of wages, rent, interest and profit in an accounting year.”

    77. Which of the following taxes is levied by the Union and appropriated and planned by the states ?

    (1) Service tax
    (2) Stamp duty
    (3) Property tax
    (4) Passenger and freight duty
    77. (2) The Constitution of India has a number of other provisions relevant to stamp duties. Of these, Article 246 and the Seventh Schedule are relevant in regard to the legislative power to levy Stamp duties. Article 268 states that stamp duties and such duties of excise on medicinal and toilet preparations as are mentioned in the Union List shall be levied by the Government of India but shall be collected (a) in the case where such duties are leviable within any Union Territory, by the Government of India, and (b) in other cases, by the States within which such duties are respectively leviable. It further states that proceeds in any financial year of any such duty leviable within any State shall not form part of the Consolidated Fund of India, but shall be assigned to that State.

    78. Which of the following taxes is not shared between the Union and the states ?

    (1) Income tax 
    (2) Excise duty
    (3) Corporation tax
    (4) Sales tax
    78. (4) A sales tax is a consumption tax charged at the point of purchase for certain goods and services.
    The tax is usually set as a percentage by the government charging the tax. Sales tax can be levied
    either by the Central or State Government or Central Sales tax department. The revenue from this tax was assigned to the States by amending Article 269 of the Constitution. Thus, sale within the State (IntraState sale) is within the authority of State Government, while sale outside State (Inter-State sale) is within the authority of Central Government.

    79. Which of the following is the most important domestic source of planned finance ?

    (1) Balance of current revenue
    (2) Profit from public sector units
    (3) Domestic private savings
    (4) Additional taxation
    79. (3) Domestic saving primarily consist of three components, viz., household sector saving, private
    corporate sector saving and public sector saving. Household sector saving constitutes the largest
    portion of gross domestic saving. Household sector saving comprises saving in financial assets and saving in physical assets. Household saving in financial assets (net) is estimated as gross financial assets net of financial liabilities, while household saving in physical assets is the net addition to physical assets by the households. Gross financial saving of the household sector include the saving in the form of currency, bank deposits, non-bank deposits, saving in life insurance fund, saving in provident and pension fund, claims on government, shares and debentures inclusive of investment in mutual funds and net trade.

    80. Consider the following reasons of continuous decline in average land-holding size in India :

    A. Law of inheritance
    B. Consolidation
    C. Farm mechanisation
    D. Desire of land ownership
    Pick the correct answer from the options given below :
    (1) A, B, C and D
    (2) A, C and D
    (3) A and D
    (4) A and B
    80. (3) Indian agriculture is structurally small farm and small farmer based. The overall average size of
    operational holding in India declined from 2.63 hectares in 1960-61 to 1.33 hectares in 2002-03. Over 80% of the land holdings in India are classified as small and marginal land holdings with the farm
    size of less than 2 ha. This implies that over 80% of the farmers in India hold just 39% of the total
    cultivated land. The Law of inheritance leads to fragmentation of land among the inheritors of land.
    Again, desire of land ownership could also be attributed to the fragmentation of land. Owning of land is more a social status in India, than an economic exigency.

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