Indian Economy MCQs

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Inflation is the decline of purchasing power of a particular currency over time. It is reflected as an increase in general prices. As the demand for credit increases, the pricing of bank products also increases.

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The term stag means a speculator who buys and sells stocks in short timeframes to make quick profits. The motove of stag is to make profit quickly on a fast moving trend, rather than buying and holding for the long run.

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Agricultural and Processed Food Products Export Development Authority (APEDA) is an apex body under the Ministry of Commerce and Industry, Government of India, responsible for the export promotion of agricultural products. Its headquarters are located in New Delhi. It is a statutory body established under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December, 1985.

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The stock market primarily deals in long-term securities, specifically stocks and shares of companies. Stocks represent ownership in a company and are typically held for longer periods, allowing investors to benefit from capital appreciation and dividends. While some markets may also facilitate short-term trading, the core function of the stock market is to provide a platform for long-term investment. Historically, the stock market has been a key driver of economic growth, with the New York Stock Exchange (NYSE) being one of the largest and oldest stock exchanges, established in 1817.

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Non-Plan Expenditure refers to mandatory spending that does not require annual approval, primarily for ongoing commitments. 1. Revenue and Capital Expenditure on interest payments: This is a non-plan expenditure as it is a fixed obligation. 2. Defense Expenditure: This is also considered non-plan as it is a recurring expense. 3. Grants to State governments & Union territories: These are typically classified as non-plan expenditures since they are ongoing financial commitments. 4. Central Assistance to States and Union Territories: This is often categorized as plan expenditure because it is aimed at specific developmental projects and requires annual approval. Thus, the correct answer is Central Assistance to States and Union Territories as it is not a non-plan expenditure.

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The Khadi and Village Industries Commission is a statutory body formed in April 1957 by the Government of India, under the Act of Parliament, ‘Khadi and Village Industries Commission Act of 1956’. It was second five year plan period then.

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The correct answer is the World Economic Forum (WEF). The Global Enabling Trade Report assesses the factors that facilitate or hinder trade across countries. It evaluates aspects like infrastructure, market access, and regulatory environment. The WEF, founded in 1971, is known for its annual meetings in Davos and focuses on improving the state of the world through public-private cooperation.

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The correct answer is Foreign Portfolio Investment (FPI). FPI is considered the most volatile form of foreign capital because it involves investments in financial assets like stocks and bonds, which can be quickly bought or sold. Unlike Foreign Direct Investment (FDI), which is typically long-term and involves direct ownership in businesses, FPI can fluctuate rapidly based on market conditions and investor sentiment. For instance, during economic uncertainty, FPI can exit markets swiftly, leading to important capital flight. In contrast, FDI and loans from international financial institutions tend to be more stable and long-term commitments.

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The government of India provides food subsidies through multiple mechanisms: 1. Fixing Central Issue Prices (CIP): The government sets these prices to ensure affordable access to essential food items for the public. 2. Public Distribution System (PDS): This system distributes subsidized food grains to low-income households, ensuring food security. 3. Funding the Food Corporation of India (FCI): The FCI is responsible for procurement, storage, and distribution of food grains, and government funding supports these operations. These combined efforts aim to alleviate hunger and improve nutrition among the population.

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The Diesel Locomotive Works (DLW) in Varanasi, India, is a production unit owned by Indian Railways, that manufactures diesel-electric locomotives and its spare parts. It is the largest diesel electric locomotive manufacturer in India. It is located on DLW to BHU road of the metropolitan city of Varanasi.