Indian Economy GK Quiz-7

Indian Economy GK Quiz-7

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

    121. EXIM Policy, 2002-07, has set a target to achieve a share in the global trade by 2007 at

    (1) 0.5 per cent
    (2) 1.0 per cent
    (3) 1.5 per cent
    (4) 2.0 per cent
    Answer:
    121. (2) The EXIM Policy for 2002-07 which came in effect on 1st April, 2002 was the first policy which had to be formulated keeping in view all the commitments India had made under the WTO. In 2001, all quantitative restrictions on imports were removed. The medium-term export strategy for 2002-07 had set a target of 1 per cent share of global trade by 2006-07. According to the then estimates by the Directorate-General of Foreign Trade, to corner 1 per cent of the global trade pie, exports needed to grow at a compounded annual growth rate of 14.25 per cent over the next three years.

    122. GDP at Factor Cost is

    (1) GDP minus indirect taxes plus subsidies
    (2) GDP minus depreciation allowances
    (3) NNP plus depreciation allowances
    (4) GDP minus subsidies plus indirect taxes
    Answer:
    122. (1) Gross value added at factor cost (formerly GDP at factor cost) is derived as the sum of the value added in the agriculture, industry and services sectors. If the value added of these sectors is calculated at purchaser values, gross value added at factor cost is derived by subtracting net product taxes from GDP. GDP at Factor Cost is called Real GDP. This is because it takes into account various other factors which give a clearer picture of the GDP.

    123. The period of the Eleventh FiveYear Plan is

    (1) 2005 to 2010
    (2) 2006 to 2011
    (3) 2007 to 2012
    (4) 2008 to 2013
    Answer:
    123. (3) Eleventh Five-Year Plan (2007–2012) aims to accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016–17; create 70 million new work opportunities; increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits; etc.

    124. FERA in India has been replaced by

    (1) FEPA 
    (2) FEMA
    (3) FENA 
    (4) FETA
    Answer:
    124. (2) The Foreign Exchange Regulation Act (FERA) was legislation passed by the Indian Parliament in 1973 with the aim of regulating payments and foreign exchange. FERA was repealed in 1999 by the
    government of Atal Bihari Vajpayee and replaced by the Foreign Exchange Management Act, which
    liberalised foreign exchange controls and restrictions on foreign investment. FEMA, which replaced Foreign Exchange Regulation Act (FERA), had become the need of the hour since FERA had become incompatible with the pro-liberalisation policies of the Government of India. FEMA has brought a new management regime of Foreign Exchange consistent with the emerging framework of the World Trade Organisation (WTO).

    125. The term ‘Mixed Economy’ denotes

    (1) existence of both rural and urban sectors
    (2) existence of both private and public sectors
    (3) existence of both heavy and small industries
    (4) existence of both developed and underdeveloped sectors
    Answer:
    125. (2) Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership; that markets remain the dominant form of economic coordination; and that profit-seeking enterprises and the accumulation of capital remain the fundamental driving force behind economic activity. However, unlike a free-market economy, the government would wield considerable indirect influence over the economy through fiscal and monetary policies.

    126. NREGP is the abbreviated form of

    (1) National Rural Employment Guarantee Programme
    (2) National Rural Educational Guarantee Programme
    (3) National Rapid Educational Guarantee Programme
    (4) National Rapid Employment Guarantee Programme
    Answer:
    126. (1) The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme, enacted by legislation on August 25, 2005. The scheme provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage of Rs. 120. This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living in rural India, whether or not they are below the poverty line. The law was initially called the National Rural Employment Guarantee Act (NREGA) but was renamed on 2 October 2009.

    127. “Jeevan Aastha” –– a scheme relating to investment and saving, was launched during 2008–09, by

    (1) Tata AIG
    (2) ICICI Prudential
    (3) Bajaj Allianz
    (4) LIC
    Answer:
    127. (4) Jeevan Aastha policy of Life Insurance Corporation of India is a single premium assurance plan which offers guaranteed benefits on death and maturity. The plan has a maximum shelf life of 45 days and offers five and ten year maturities to customers. The scheme has fixed the minimum age at entry as 13 years which would enable parents to make provisions for higher education of their children. Similarly, the maximum age at entry has been fixed as 60 years. The plan offers guaranteed addition of Rs100 for every thousand of maturity sum assured for 10 years term and Rs90 per annum for policies with five year term. The policy holder can also avail the benefits of tax exemption and has the options of surrendering the policy or to raise loan under the policy.

    128. India is called a mixed economy because of the existence of

    (a) Public Sector
    (b) Private Sector
    (c) Joint Sector
    (d) Cooperative Sector
    (1) a, d 
    (2) a, b
    (3) c, d 
    (4) b, d
    Answer:
    128. (2) India is called a mixed economy because there is both private owned enterprises and state owned enterprises and the government does not intervene on the decisions of enterprises owned by individuals except to govern law and to correct market failures. The product market in this case is determined by the market demand and market supply rather than the decisions of the policy makers.

    129. The present Indian monetary system is based on

    (1) Gold Reserve System
    (2) Proportional Reserve System
    (3) Convertible Currency System
    (4) Minimum Reserve System
    Answer:
    129. (4) Since 1957, the Reserve Bank of India is required to maintain gold and foreign exchange reserves of Rs. 200 crore, of which at least Rs. 115 crore should be in gold and Rs. 85 crore in the form of Government Securities. The system as it exists today is known as the minimum reserve system.

    130. Gross Domestic Product is defined as the value of all

    (1) goods produced in an economy in a year
    (2) goods and services produced in an economy in a year
    (3) final goods produced in an economy in a year
    (4) final goods and services produced in an economy in a year
    Answer:
    130. (4) Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time. GDP was first developed by Simon Kuznets for a US Congress report in 1934. After the Bretton Woods conference in 1944, GDP became the main tool for measuring the country’s economy.

    131. The Draft of the Five Year Plans in India is approved by the

    (1) National Development Council
    (2) Planning Commission
    (3) National Productivity Council
    (4) Ministry of Finance
    Answer:
    131. (1) The government recently (in October 2012) approved the 12th five year plan (2012-17) document that seeks to achieve annual average economic growth rate of 8.2 per cent, down from 9 per cent envisaged earlier and directed that the draft be placed before the National Development Council (NDC) which is the apex body for decision making and deliberations on development matters in India, presided over by the Prime Minister.

    132. Who is the Ex-officio Chairman of the Planning Commission ?

    (1) Minister for Planning & Development
    (2) Finance Minister
    (3) Prime Minister
    (4) Minister for Rural & Community Develop-ment
    Answer:
    132. (3) With the Prime Minister as the ex-officio Chairman, the Planning Commission of India has a nominated Deputy Chairman, who is given the rank of a full Cabinet Minister. Mr. Montek Singh Ahluwalia is presently the Deputy Chairman of the Commission. Cabinet Ministers with certain important portfolios act as part-time members of the Commission, while the full-time members are experts of various fields like Economics, Industry, Science and General Administration.

    133. Wholesale price based inflation rate in India reached its highest level in 13 years on 27th July, 2008. It was

    (1) 11.75 per cent
    (2) 11.85 per cent
    (3) 12.00 per cent
    (4) 12.05 per cent
    Answer:
    133. (*) 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 reduction in government fuel subsidies, which lifted gasoline
    prices by an average 10%.In July 2008, the key Indian Inflation Rate i.e. the Wholesale Price Index
    touched the mark of 12.6%, highest rate in past 16 years of the 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.

    134. Which is the biggest tax paying sector in India?

    (1) Agriculture sector
    (2) Industrial sector
    (3) Transport sector
    (4) Banking sector
    Answer:
    134. (2) India’s large service industry accounts for 57.2% of the country’s GDP while the industrial and
    agricultural sectors contribute 28.6% and 14.6% respectively. Agriculture is the predominant occupation in Rural India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%.

    135. The Government has renamed NREGA scheme and the name associated with the scheme is that of

    (1) Rajiv Gandhi
    (2) Jawahar Lal Nehru
    (3) Mahatma Gandhi
    (4) Indira Gandhi
    Answer:
    135. (3) The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme, enacted by legislation on August 25, 2005. It aims at enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wageemployment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. The law was initially called the National Rural Employment Guarantee Act (NREGA) but was renamed on 2 October, 2009.

    136. The Reserve Bank of India was nationalised in the year

    (1) 1935 
    (2) 1969
    (3) 1949 
    (4) 1980
    Answer:
    136. (3) The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young Commission. The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank, which commenced operations on April 1, 1935. The Reserve Bank of India was nationalised with effect from 1st January, 1949 on the basis of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948. All shares in the capital of the Bank were deemed transferred to the Central Government on payment of a suitable compensation.

    137. The abbreviation ‘SEBI’ stands for

    (1) Savings and Exchange Bank of India
    (2) Securities and Exchange Bank of India
    (3) Survey of essential business in India
    (4) Securities and Exchange Board of India
    Answer:
    137. (4) The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established on 12 April 1992 through the SEBI Act, 1992. Initially SEBI was a non statutory body without any statutory power. However in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act 1992. In April, 1998 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

    138. Insurance sector in India is regulated by

    (1) RBI 
    (2) CII
    (3) IRDA 
    (4) SEBI
    Answer:
    138. (3) The Insurance Regulatory and Development Authority (IRDA) is an autonomous apex statutory body which regulates and develops the insurance industry in India. It was constituted by a Parliament of India act called Insurance Regulatory and Development Authority Act, 1999. The IRDA Act, 1999 was passed as per the major recommendation of the Malhotra Committee report (1994) which recommended establishment of an independent regulatory authority for insurance sector in India. Later, It was incorporated as a statutory body in April, 2000.

    139. In the budget for 2011–12, the fiscal deficit (% of GDP) for 2011 – 12 has been projected at

    (1) 5.1 
    (2) 5.0
    (3) 4.6 
    (4) 3.4
    Answer:
    139. (3) In his Budget presentation for 2011-12, Mukherjee had proposed to reduce the fiscal deficit to 4.6 per cent in the next fiscal. He had exuded confidence that the fiscal deficit target of 4.6 per cent of the GDP for 2011-12 would be achieved. The fiscal deficit for 2011-12 was projected at Rs 4,13,000 crore, which was to be financed by market borrowings via the issue of dated securities estimated at Rs 3,43,000 crore (83% of deficit) and the issue of treasury bills estimated at Rs 15,000 crore (3.5% of the deficit). Note : Deficits occur when a government’s expenditures exceed the revenue that it generates. Finance minister Arun Jaitley pegs fiscal deficit at 3.2% of GDP for 2017-18.

    140. The fringe benefit tax was introduced in the budget of

    (1) 2003-04 
    (2) 2004-05
    (3) 2005-06 
    (4) 2006-07
    Answer:
    140. (3) The fringe benefits tax (FBT) was introduced in India in the year 2005-2006. Fringe Benefit Tax (FBT) is fundamentally a tax that an employer has to pay in lieu of the benefits that are given to his/her employees. It was an attempt to comprehensively levy tax on those benefits, which evaded the taxman. The list of benefits encompassed a wide range of privileges, services, facilities or amenities which were directly or indirectly given by an employer to current or former employees, be it something simple like telephone reimbursements, free or concessional tickets or even contributions by the employer to a superannuation fund. FBT was introduced as a part of the Finance Bill of 2005 and was set at 30% of the cost of the benefits given by the company, apart from the surcharge and education cess that also needed to be paid.

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