Indian Economy MCQs

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Disinflation means the decrease in the rate of inflation. It is a slowdown in the rate of increase of price levels of goods and services. This is different from deflation, in the way that Disinflation is only a marginal and short term decrease in rate of inflation.

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The correct answer is the International Monetary Fund (IMF). The World Economic Outlook Report is published biannually by the IMF, providing analysis and projections of the global economy. It includes data on economic growth, inflation, and other key indicators, helping policymakers and economists understand global economic trends. The IMF was established in 1944 and has 190 member countries, focusing on global monetary cooperation and financial stability.

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The correct answer is SEBI (Securities and Exchange Board of India). SEBI was established in 1988 and became a statutory body in 1992. It regulates the securities market in India, protecting investor interests and promoting the development of the market. The RBI (Reserve Bank of India) primarily oversees monetary policy and banking regulation, while BSE (Bombay Stock Exchange) is a stock exchange, not a regulatory body.

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The correct answer is LORO Account. A LORO account refers to a foreign bank’s account held in another bank, typically used for international transactions. In this case, the Union Bank of India is using an account of the State Bank of India in Citibank, New York, which makes it a LORO account for Union Bank. Trivia: NOSTRO accounts are accounts a bank holds in foreign currency in another bank, while VOSTRO accounts are the opposite, representing foreign banks’ accounts held in the domestic bank.

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The Laffer curve is a theoretical concept in economics that illustrates the relationship between tax rates and government revenue. The curve is named after economist Arthur Laffer, who popularized the concept in the 1970s. The basic idea behind the Laffer curve is that there is a certain tax rate that will maximize government revenue. At a 0% tax rate, the government will obviously not collect any revenue. At a 100% tax rate, the government will also not collect any revenue because people will have no incentive to work. The Laffer curve suggests that there is a point in between these two extremes where the government will collect the most revenue. The exact shape and location of the Laffer curve will vary depending on various factors, such as the state of the economy and the efficiency of the government’s tax collection system.

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Devaluation refers to fall in the fixed exchange rate between one currency and other. Devaluation is used to correct the balance of payment (BoP) deficit but only as a last resort as it has major repercussions on the domestic economy. Devaluation can correct a BoP deficit because it lowers the price of experts in terms foreign currencies and raise the price of imports on the home market

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Balance of Trade: Difference of ONLY visibles Balance of Payments: Difference of visibles as well as invisibles

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A Custodial Account in India is specifically designed for minor persons, allowing adults to manage assets on behalf of minors until they reach the age of majority, which is 18 years. This type of account ensures that minors can benefit from investments and savings while being protected under legal guardianship. Custodial accounts are commonly used for educational savings and other financial planning purposes for children.

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First statement is incorrect because the report is published annually by the International Food Policy Research Institute (IFPRI). The GHI is calculated by taking into account four key parameters: shares of undernourished population, wasted and stunted children aged fewer than 5, and infant mortality rate of the same age group. As per the report, child stunting in India is the major reason behind India’s worse ranking in the report.

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A sunrise industry is one that is new or relatively new, is growing fast and is expected to become important in the future. A sunset industry is an industry in decline, one that has passed its peak or boom periods.