Indian Economy MCQs

Notes:
The Monetary Policy Committee was formed in 2016 after an amendment to the RBI Act, 1934. The Committee consists of six members: three from the Reserve Bank of India and three nominated by the Central Government. The Governor of the Reserve Bank of India is designated as the ex-officio Chairperson of the Monetary Policy Committee.

Notes:
IMF in 1969 to provide financial assistance to members with a temporary balance of payments need arising from contributions to buffer stocks established under approved international commodity agreements

Notes:
Selective credit control is a qualitative instrument used by RBI to restrict or channel credit to specific sectors. RBI issues directives and margin requirements under the Banking Regulation Act, 1949. It was used for commodities such as foodgrains, sugar, and cotton. Selective credit control is distinguished from quantitative tools like CRR, SLR, bank rate, and repo rates, which affect the overall money supply.

Notes:
Under the Reserve Bank – Integrated Ombudsman Scheme, 2021, the Executive Director in charge of the Consumer Education and Protection Department of RBI is the appellate authority for appeals against Banking Ombudsman decisions. Appeals must be filed within 30 days through the RBI portal or email. Previous schemes listed the Deputy Governor, but the current scheme specifies the Executive Director.

Notes:
The Commission for Agricultural Costs and Prices (CACP) was established in January 1965 as the Agricultural Prices Commission and renamed CACP in 1985. CACP functions as an attached office under the Ministry of Agriculture and Farmers Welfare. CACP annually recommends MSPs for 22-23 crops to the government. Its recommendations consider factors such as production costs, market prices, and inter-crop price parity.

Notes:
Interest Rate Risk falls under Market Risk. Market risk encompasses the potential for financial loss due to fluctuations in market prices, including interest rates. Interest rate changes can affect the value of investments, particularly fixed-income securities. For example, when interest rates rise, the prices of existing bonds typically fall, leading to potential losses for investors. This risk is a critical consideration for financial institutions and investors alike.

Notes:
The Global Enabling Trade Report is published by the World Economic Forum. The first edition appeared in 2008. The report assesses the policies, institutions, and services facilitating trade globally. The World Economic Forum is headquartered in Geneva, Switzerland, and was established in 1971. The report includes the Enabling Trade Index, which ranks countries based on their trade enabling factors.

Notes:
The correct answer is 1 year (12 months). According to the Banking Ombudsman Scheme, complaints regarding credit cards must be filed within one year from the date of the transaction or the event leading to the complaint. This time limit ensures timely resolution and encourages consumers to report issues promptly. The Banking Ombudsman is a quasi-judicial authority established by the Reserve Bank of India to address customer grievances in the banking sector.

Notes:
In case of High-income elasticity of demand, an increase in income is accompanied by a relatively larger increase in quantity demanded for normal goods. Thus, among the given options Car has highest income elasticity of demand.

• Car: A luxury good with high income elasticity; demand rises sharply with an increase in income.
• Milk: A necessity good with low to moderate income elasticity.
• Paddy: A basic necessity and staple food, with very low income elasticity.
• Tobacco: Considered an addictive good with low or even negative income elasticity in some cases, as demand is less income-sensitive.

Notes:
Foreign banks in India failing to meet priority sector lending targets must deposit the shortfall with SIDBI for one year as per RBI guidelines. Domestic banks deposit shortfalls in the Rural Infrastructure Development Fund under NABARD. The RBI’s 2020 guidelines specify a 40 percent lending target for foreign banks with 20 or more branches in India, based on their Adjusted Net Bank Credit.