Indian Economy MCQs - Set 5

ANSWER: Only 1 is correct

Explanation:
From the perspective of balance of payments — a country’s external sector balance sheet — foreign currency inflows are broadly divided into current account and capital account flows. While current account flows arise out of transactions in goods and services and are permanent in nature, capital account flows are essential in various kinds of loans and equity investments, which can be reversed. That is why policy makers have to keep a close eye on capital flows.
The Capital flows would include inflows through foreign borrowings by Indian corporate and businesses, NRI deposits and portfolio flows from institutional investors into the stock markets Loans to government and short-term trade credit are also included. India had controls on both capital account transactions as well as on the current account with the local currency fixed by the central bank. However, since 1991, when structural changes to the Indian economy were carried out, the rupee was first made convertible on the current account. Subsequently, capital controls were eased. In 1994, a big shift took place with the government allowing foreign portfolio investments. Over a period of time, foreign direct investment norms and overseas borrowing norms were eased.

ANSWER: Kandla

Explanation:
Kandla has free trade zone for Special Economic Zone (KASEZ). It was earlier known as the Kandla Free Trade Zone and is located at the port town Gandhidham in the state of Gujarat. One of the most significant features of this special economic zone at Kandla is that it is strictly a union government zone amidst others with more of private participation.

ANSWER: Satisfaction and wants

Explanation:
Utility is the power or capacity of a commodity to satisfy a human want or it is the amount of satisfaction that a person gets from the consumption of a good or service. It is measured in utils.

ANSWER: Value of all goods and services produced in a financial year

Explanation:
In the calculation of national income, the value of goods and services produced in a year is added. While the value of old sold goods and the services of the housewife is not added.

ANSWER: Country is becoming more developed

Explanation:
The movement from an agrarian-based economy to a manufacturing and the service-based economy shows that, a country is moving from a less developed phase to a developing and developed phase.

ANSWER: Deficit spending is antidote to recession

Explanation:
Keynes was one of the most celebrated economist of all times. He published the General theory of employment, Interest and Money and this became the basis of Macroeconomic theories. Under Keynesianism, deficit spending was the antidote to recession. His ideas informed governments’ response to the great depression, and played a pivotal role in the creation of a new monetary standard at the close of World War II. To this day, many of Keynes’ most radical ideas are still economic orthodoxy.

ANSWER: Amartya Sen

Explanation:
Amartya Sen is an Indian economist, who has worked internationally, highlighting ethical considerations behind his economic thinking. Sen has contributed greatly to welfare economics, arguing for instance that famines arise due to a lack of income, not food.

ANSWER: Yoginder K Algah

Explanation:
Yoginder K Alagh is the author of “India 2020, Journal of Quantitative Economics” . He is a noted Indian economist and former Union Minister of Government of India. He was the Chairman of Institute of Rural Mangement Anand(IRMA) from 2006 to 2012.

ANSWER: Socialist economy

Explanation:
The socialist model of the economy is based on the Marx Model of communism where the state owns the factors of production. The capital cannot be privately held and there is communal ownership or what is known as “Communism”. The workers are paid uniform wages and what Marx called the “participation of the workers in the collective bargaining” is a feature of the system.

ANSWER: Neither 1 nor 2

Explanation:
National Mission for protein supplements is a subsheme of RKVY. It focuses on animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries in selected blocks. HRIDAY scheme is to revitalize the heritage cities of Amritsar, Ajmer, Gaya, Kanchipuram, Mathura, Varanasi and Vellankani. Heritage City Development and Augmentation Yojana ( HRIDAY) – aims to bring together urban planning, economic growth and heritage conservation besides beautification in an inclusive and integrated manner with focus on cleanliness, livelihoods, skills, safety, security, accessibility and faster service delivery.