Chapter Wise Indian Economy MCQ’s With Explanation

Today’s Topic:Schemes and Taxes

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Today’s Topic:Schemes and Taxes


Q1. Public Distribution System (PDS) is operated under the responsibility of the:

  1. Central Government
  2. State Government
  3. Private Institution

From the following select the correct above statements:

a) Only 1          b) 2 and 3            c) 1 and 2         d) None of these

Ans:     C

Explanation:     Public Distribution System (PDS) is operated under the joint responsibility of the central and the state government. The central government through FCI has the following responsibilities:

  1. Procurement, storage, transportation of food grains.
  2. Bulk allocation of food grains to the state government

The state government’s responsibility is operational. They are as follows:

Identification of families below the poverty line. Issue of ration cards, Supervision of the function of fair price shops.

Q2. Arrange the following in the descending order of the largest agricultural imports of India:

  1. Pulses
  2. Wood and wood products
  3. Edible vegetable oils

Which of the correct order from the above statement?

a) 1, 2, 3       b) 1, 3, 2         c) 3, 2, 1            d) 2, 1, 3

Ans:     C

Explanation:     Edible oil                                    45%

Wood and Wood Products         16%

Pulses                                        13%

Q3. Consider the following statements:

  1. Perpective planning is used by socialist countries where each and every aspect of planning is controlled by the state.
  2. Indicative planning is a feature of Mixed economy

Which of the above statements are correct?

a) Only 1             b) Only 2             c) 1 and 2               d) None of these

Ans:     B

Explanation:     Comprehensive or imperative Planning is used by socialist countries and each and every aspect of planning is controlled by the state. Perspective planning refers to a long term planning for a period of 15, 20, 25 years, however the objective of perspective planning can be archived by breaking the period in 5-7 years plans.

Indicative planning, which generally puts forward some broad principle and guidelines to achieve some specific goals. Indicative planning is flexible. It is peculiar to mixed economy and where both the public and private sector coexist.

Q4. Consider the following statements:

  1. Core Inflation is essentially demnd driven.
  2. Core inflation excludes items that face volatile price movement

Which of the following statements given above are correct?

a) Only 1       b) Only 2         c) 1 and 2         d) None of these

Ans:     C

Explanation:     Manufacturing inflation, also known as ‘Core inflation’, is essentially driven by demand and makes up the non food basket of the wholesale price index.

Core inflation is a measure of inflation that excludes items that face volatile price movement, notably food any energy. It is therefore, a preferred food for framing long term policy

Q5. Consider the following statements regarding the office of economic advisor (OEA) :

  1. It is attached to the corporate ministry
  2. The weekly compilation and publication whole sale price index (WPI) is done by the office of Economic Advisor.

Which of the statements given below is correct?

a) Only 2             b) Only 1          c) 1 and 2         d) Neither 1 nor 2

Ans:     C

Explanation:     Office of the economic Advisor (OEA) is an attached Office of the ministry of commerce and industry. The main function of the office of economic Advisor include, inter Alia the following:

Compilation and publication of the weekly wholesale price index number of India

Q6. Which among the following is the oldest Public Sector Bank of India?

a) Imperial Bank of India          b) Bank of India

c) State bank of India               d) Allahabad Bank

Ans:     D

Explanation:     Allahabad bank which began in 1865, has its headquarters in Kolkata and is the oldest joint stock bank in India. The bank was founded in Allahabad in 1865 and as of 31 march, 2012 now has over 2500 branches throughout India. The Bank has a branch in Hong Kong and a representative office in Shenzhen.

Q7. Consider the following statements regarding Non Banking Finance Institution (NBFCs) :

  1. NBFCs can also engage in microfinance activities.
  2. Housing finance companies from district sub group of the NBFCs
  3. The deposit insurance facility of the deposit demand and debit Guarantee Corporation is not available for NBFC depositors.

Which among the above statements is correct

a) Only 1          b) Only 1 and 2             c) 2 and 3         d) 1, 2 and 3

Ans:     B

Explanation:     A Non Banking Financial Company (NBFC) is a company registered under the companies Act, 1956 of India, engaged in the business of loans and advances of share, stock, bounds repurchase, insurance business etc. The top 20 non banking finance companies of ndia as HDFC, Power Finance corporation, Reliance Capital, IDFC etc. .

The deposit insurance facility of the deposit Insurance and Credit Guarantee Corporation is not available for NBFCs depositors.

Q8. Which among the following public sector undertaking (PSUs) is the sixth and seven company which has been accorded the Maharatna status?

a) Bharat Heavy Electricals Limited(BHEL)         b) Power Grid Corporations of India Limited

c) Gas Authority of India Limited (GAIL)              d) A and C

Ans:     D

Explanation:     The seven state- owned units which have been accorded the maharatna stats are-

  • SAIL
  • ONGC
  • NTPC
  • IOL
  • CIL
  • BHEL
  • GEL

Q9.Which of the following statements is correct regarding the Banking sector of India?

a) At present there are 30 Nationalized bank in India

b) Foregin Banks and regional Rural Banks under the category of Schedule Commercial Bank

c) Narshimhan Committee is related to banking Sector reforms

d) None of these

Ans:     C

Explanation:     At present there are 27 Nationalized Bank in India. Foreign banks and regional Rural Bank also comes under the category of scheduled commercial Banks. Now the Back are free to determine their saving banks deposits interest rate.

Q10. Which among the following are the Credit Rating Agencies of India?

  1. CRISI
  2. CARE
  3. ICRA

Which of the above is the selected corrected statement?

a) 1 and 2        b) 2 and 3         c) Only 1             d) 1, 2, 3 and 4

Ans:     D


Credit Rating Agencies of India- CRISI,CARE,ICRA and ONICRA.

CRISIL’s ratings process is designed to ensure that all ratings are based on the highest standards is independence and analytical rigor.



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