Chapter Wise Indian Economy MCQ’s With Explanation

Today’s Topic: – World Trade-1

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Wednesday- Indian Polity and Governance

Thursday- History of India and Indian National Movement

Friday- Economic and Social Development

Saturday-Current Affairs Concepts

Today’s Topic: World Trade-1

Q1. Consider the following statements:

  1. The Practice of selling goods in a foreign country at a price below their domestic selling price is called double pricing.
  2. A Trade Policy consists of Export-Import policy.
  3. The WTO was formed in 1991.

Select the correct statements from the codes given below.

a) 1 only               b) 2 only               c) 1, 2 and 3                d) None of the above

Ans:     B

Explanation: The practice of selling goods in a foreign country at a price below their domestic selling price is called dumping, not double pricing. So statement (1) is incorrect. statement (2) is correct. A trade policy consists of Export and Import policy, WTO (World Trade Organization) was formed in 1995 not in 1991

Q2. Match the following List – I and List – II

List – I (Organization)                          List – II (headquarter)

a) WTO                                                         Jeneva

b) OPEC                                                        Austria

c) European                                                  Union Brusels

d) OECD                                                        France

Codes:

A         B          C          D

a) 1         2          3          4

b) 1         2          4          3

c) 3         4          1          2

d) 4        3          2          1

Ans:     A

Explanation:    WTO                            –           Jeneva

OPEC                           –           Austria

European Union          –           Brusels

OECD                          –           France

 

Q3. Consider the following statements in regards to Special Economic Zone (SEZ)

  1.  Special Economic Zone in India are based on Chinese Model.
  2. SEZ Act became effective in 2004

Select the correct statements from the codes given below.

a) 1 only               b) 2 only               c) 1 and 2               d) None of the above

Ans:     A

Explanation: SEZ represents such a geographical area in a particular country which enjoys some concession and facilities regarding exports and import and excise duty that are not available to non-SEZ areas. SEZ in India based on the Chinese Model. SEZ act in India became effective in 2005, not in 2004.

Q4. Consider the following statements:

  1. Focus market scheme was announced in April 2006.
  2. Full convertibility of rupee on current account was announced on 19 August 1994.
  3. First Export Processing Zone (EPZ) was established in Mumbai.

Select the correct statements from the codes given below.

a) 1 and 2               b) 2 and 3               c) 1, 2 and 3              d) None of the above

Ans:     A

Explanation: Focus market scheme was announced in April 2006. Full convertibility of rupee on current account was announced on 19 August 1994. So statement (1) and (2) are correct. But statement (3) is not correct. First Export Processing Zone (EPZ) was established in Kandla (Gujarat) in 1965.

Q5. According to the International Monetary Fund (IMF), the invisible trade consists of:

1.Interest               2. Gift               3. Payment of the trade loans                4. Materialistic items

Codes:

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

Ans:     C

Explanation: International Monetary Fund (IMF) have included the following in the invisible trade-Transport cost of goods, payment of premiums of insurance, payment related to various services. Grants and money sent by migrants, interest, gifts, payments of trade loans etc. materialistic items come under visible trade.

Q6. Which of the following is/are the items of India’s Export :

  1. Leather and leather goods                             2. Ornaments

3. Petroleum products                                         4. Fertilizers

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

Ans:     C

Explanation: India’s export includes following items-

  1. Leather and leather goods               2. Ornaments
  2. Petroleum products                          4. Tea
  3. Coffee                                               6. Cotton
  4. Marine products etc.

India does not export fertilizers rather it imports it. So (4) is not correct.

Q7. Consider the following statements which regard to new Foreign Policy (2009-201 4.

  1. It’s objective is to double India’s exports of goods and services by 2014
  2. Focus on the generation of additional employment.
  3. To double India’s percentage share of global trade by 2022.

Select the correct statements from the codes given below.

a) 1 only               b) 2 only               c) 1, 2 and 3                  d) None of the above

Ans:     C

Explanation: The features of the New Foreign Policy (2009-2014) are:

  • To double India’s exports of goods and services by 2014
  • Focus on the generation of additional employment and double India’s percentage a share of global trade by 2022. So all statements are correct.

Q8. The balance of Payment includes:

  1. Current Account                             2. Capital Account

3. Unilateral transfer account              4. Gold account

Select the correct statements from the codes given below.

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

Ans:     D

Explanation: Balance of payment is a statement of all transaction of a country with rest of the word during a given period of time. The balance of payment includes – current account, Capital account, unilateral transfer account & gold account. So correct answer is (d)

Q9. The balance of payment includes:

a) Visible Trade               b) Invisible Trade               c) Loans                       d) All of These

Ans:     D

Explanation: Balance of payment is a statement of all transaction of a country with the rest of the world during a given period. The balance of payment may be classified into capital account, current account, unilateral transfer account etc. These transactions may be related to gift, currency, gold and imports and exports of goods and services etc. The balance of payment includes visible trade, invisible trade loans etc.

Q10. Match the following List – I and List – II

List – I                         List – II

a) Mexico                             Yen

b) Austria                             Peso

c) Japan                                Riyal

d) Saudi Arabia                    Shiling

Codes:

A         B          C          D

a) 1         2          3          4

b) 2         4          1          3

c) 2        3           4          1

d) 2        3          1          4

Ans:     B

Explanation:

Mexico            –           Peso

Austria             –           Shiling

Japan               –           Yen

Soudi Arabia    –           Riyal

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