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MCQs

Total Questions : 650 | Page 7 of 65 pages
Question 61. For which tax, was constitutional status given much later after its introduction in a small way in 1994 - 95?
  1.    Corporation Tax
  2.    Customs Duty
  3.    Taxes on Services
  4.    Income Tax
 Discuss Question
Answer: Option C. -> Taxes on Services
Answer: (c)Dr. Manmohan Singh, the then Union Finance Minister, in his Budget speech for the year 1994-95 introduced the new concept of Service Tax. It was given constitutional status by Chapter VA of the Finance Act, 2003.
Question 62. The main objective of Antyodaya Programme is
  1.    upliftment of industrial workers
  2.    upliftment of urban poor
  3.    unpliftment of rural poor
  4.    upliftment of farmers
 Discuss Question
Answer: Option C. -> unpliftment of rural poor
Answer: (c)
Antyodaya Anna Yojana (AAY) is a centrally sponsored scheme that was launched in 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.
Question 63. During which Five Year Plan, the price level in Indian economy showed a decline?
  1.    Plan II
  2.    Annual plans
  3.    Plan IV
  4.    Plan I
 Discuss Question
Answer: Option D. -> Plan I
Answer: (d)During first FiveYear Plan ( 1951–56) the price level in Indian economy showed a decline because of rapid agricultural development and measures to control inflation as there was disequilibrium due to second world war and partition of economy.
Question 64. Which sector of the Indian Economy contributes largest to the GNP?
  1.    Tertiary sector
  2.    Primary sector
  3.    Secondary sector
  4.    Public sector
 Discuss Question
Answer: Option A. -> Tertiary sector
Answer: (a)
Tertiary sector of the Indian Economy contributes the largest to the GNP. During the last decade tertiary sector has shown remarkable expansion. The economy is divided into three sectors on the basis of activities-Primary, Secondary and tertiary.
Primary sector is involved in agriculture, Secondary sector is involved in manufacturing, mining, construction while tertiary sector is involved in trade, transport, communication, banking & other services.
In the last decade, India has expanded maximum in providing services like IT, Telecommunication, Healthcare, Tourism which is contributing around 60% to GDP.
Question 65. Who coined the term ‘Hindu rate of growth’ for Indian Economy?
  1.    Raj Krishna
  2.    A.K. Sen
  3.    Kirit S. Parich
  4.    Montek Singh Ahluwalia
 Discuss Question
Answer: Option A. -> Raj Krishna
Answer: (a)
The term was coined by Indian economist Raj Krishna. The Hindu rate of growth is a derogatory term referring to the low annual growth rate of the socialist economy of India before 1991, which stagnated around 3.5% from the 1950s to the 1980s.
The word “Hindu” implies that the Hindu outlook of fatalism and contentedness was responsible for the slow growth.
Question 66. ICI is the name associated with
  1.    Indian Cement Industry
  2.    a MNC which manu-factures chemicals
  3.    Chamber of Commerce and Industry
  4.    a private sector bank
 Discuss Question
Answer: Option B. -> a MNC which manu-factures chemicals
Answer: (b)
Imperial Chemical Industries (ICI) was a British chemical company, taken over by a number of chemical companies, including Huntsman Corporation, a United States-based company, and AkzoNobel, a Dutch conglomerate, two of the largest chemical producers in the world.
In its heyday, ICI was the largest manufacturing company in the British Empire, and commonly regarded as a “bellwether of the British economy. It produced paints and speciality products (including ingredients for foods, speciality polymers, electronic materials, fragrances and flavours).
Question 67. Which one is not the main objective of fiscal policy in India?
  1.    To promote price stability
  2.    To increase liquidity in the economy
  3.    To minimize the inequalities of income & wealth
  4.    To promote employment opportunity
 Discuss Question
Answer: Option B. -> To increase liquidity in the economy
Answer: (b)
Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy. It is used to stabilize the economy over the course of the business cycle.
Fiscal policy is the sister strategy to monetary policy through which a central bank influences a nation’s money supply.
Question 68. Indian Economy is a/an :
  1.    Mixed Economy
  2.    Independent Economy
  3.    Capitalist Economy
  4.    Communist Economy
 Discuss Question
Answer: Option A. -> Mixed Economy
Answer: (a)
All developing countries like India are mixed economies. A mixed economy is neither pure capitalism nor pure socialism but a mixture of the two systems.
The features of a mixed economy which exist in India are:
Private ownership of means of production;
The important role of market mechanism;
Presence of a large public sector along with free enterprise;
Economic planning
Question 69. What is a bank rate ?
  1.    Rate at which banks advance loans to the customers
  2.    Rate at which Central bank of a country advances loans to other banks in the country
  3.    Rate at which banks lend among themselves
  4.    Rate at which banks lend to money lenders
 Discuss Question
Answer: Option B. -> Rate at which Central bank of a country advances loans to other banks in the country
Answer: (b)
Bank Rate refers to the official interest rate at which RBI will provide loans to the banking system which includes commercial/cooperative banks, development banks etc.
Such loans are given out either by direct lending or by rediscounting (buying back) the bills of commercial banks and treasury bills. Thus, the bank rate is also known as the discount rate.
Question 70. The system of issuing and monitoring of money in the market is known as–
  1.    Fixed reserve ratio
  2.    Proportional reserve ratio
  3.    Minimum reserve ratio
  4.    Floating reserve ratio
 Discuss Question
Answer: Option C. -> Minimum reserve ratio
Answer: (c)
The reserve requirement (or cash reserve ratio) is a central bank regulation that sets the minimum reserves each commercial bank must hold (rather than lend out) of customer deposits and notes. These required reserves are normally in the form of cash stored physically in a bank vault (vault cash) or deposits made with a central bank.
The required reserve ratio is sometimes used as a tool in monetary policy, influencing the country’s borrowing and interest rates by changing the number of funds available for banks to make loans with.
The main objective of minimum reserves is the stabilisation of money market rates. Minimum reserves allow credit institutions to smooth out fluctuations in liquidity such as those caused by the demand for banknotes.

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