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MCQ on Indian Economy

If the Cash Reserve Ratio (CRR) is lowered by the RBI, its impact on credit creation will be to :

  • decrease it
  • increase it
  • No impact
  • None of these
    • Correct Option: B  [ increase it ]

    Explanation:

Which is the following is direct tax ?

  • Income tax
  • Excise duty
  • Sales tax
  • None of these
    • Correct Option: A  [ Income tax ]

    Explanation:

Which among the following in India has the function of recommending Minimum Support Prices for various commodities to the Government ?

  • National Farmers Commission
  • Commission for Agricultural Costs and Prices
  • Central Statistical organization
  • Department of Agriculture
    • Correct Option: B  [ Commission for Agricultural Costs and Prices ]

    Explanation:

Mixed economy means an economy where:

  • There is co-existence of public sector along with private sector
  • Both agriculture and Industry are equally promoted by the state
  • There is importance of small scale industries along with heavy industries
  • Economy is controlled by military as well as civilian rulers
    • Correct Option: A  [ There is co-existence of public sector along with private sector ]

    Explanation:

The World Trade Organisation has replaced which organisation ?

  • ITO
  • UNCTAD
  • GATT
  • OECD
    • Correct Option: C  [ GATT ]

    Explanation:

Which period in India is known as plan holiday ?

  • 1961-1966
  • 1965-1966
  • 1966-1969
  • 1969-1974
    • Correct Option: C  [ 1966-1969 ]

    Explanation:

In order to control inflationary price rise, Reserve Bank directs Banks to

  • Reduce rate of interest on credit
  • Reduce Statutory Liquidity Ratio (SLR)
  • Increase Cash Reserve Ratio (CRR)
  • Buy bonds from capital market
    • Correct Option: C  [ Increase Cash Reserve Ratio (CRR) ]

    Explanation:

Find out the statement which is false.
Financial Structural reform needs

  • fall in government budget deficit
  • increase in profitability of economic sectors
  • reduce inflationary pressure
  • increase in the balance of payment deficit
    • Correct Option: D  [ increase in the balance of payment deficit ]

    Explanation:

Government imposes taxes to:

  • run the machinery of State
  • uplift of weaker sections
  • check the accumulation of wealth among the rich
  • None of the above
    • Correct Option: A  [ run the machinery of State ]

    Explanation:

Which one of the following is the main source of revenue for the states ?

  • Property tax
  • Sales tax
  • Excise duty
  • None of these
    • Correct Option: B  [ Sales tax ]

    Explanation:
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