Indian Economy MCQs

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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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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

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In the year 1924, the practice of presenting the railway budget separately from the general budget (or vice versa in true sense) started in India.

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Government spending refers to the money spent by the government or public sector on the acquisition of goods and services such as education, healthcare, social protection, defence etc. It does not come under monetary policy.

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The correct answer is the Banking Regulation Act. This act governs the operations of banking companies in India and allows them to engage in non-banking activities, provided these are in accordance with the provisions set forth. The act was enacted in 1949 to regulate the banking sector and ensure financial stability. It also empowers the Reserve Bank of India to oversee and regulate banking operations.

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The correct answer is “Printing of Currency.” In deficit financing, when a government faces a budget shortfall, it may resort to printing more money as a last resort. This method can lead to inflation if not managed properly. Historically, countries like Zimbabwe and Germany in the 1920s experienced hyperinflation due to excessive money printing. This approach is typically avoided until other options, such as borrowing, are exhausted.

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Economies are divided into IDA, IBRD, and Blend countries based on the operational policies of the World Bank. International Development Association (IDA) countries are those with low per capita incomes that lack the financial ability to borrow from the International Bank for Reconstruction and Development (IBRD). Blend countries are eligible for IDA loans but are also eligible for IBRD loans because they are financially creditworthy.

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Mixed Banking is the system in which banks undertake activities of commercial and investment banking together.

• These banks give short-term and long-term loans to industrial concerns.
• The banks appoint experts which give valuable advice on various financial issues and also help gauge the financial health of companies.
• Industries don’t have to run to different places for differential financial needs.
• They thus promote rapid industrialization.
• They may however pose a grave threat to liquidity of a bank and lead to bad debts.

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Gujarat is the largest producer of salt in India because of its extensive dry coast. Gujarat accounts for 77% of the salt produced in our country. Salt industries of Gujarat are thriving in Surat, Kutch, Bhavnagar, Rajkot, Anand, etc.

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In India, major proportion of power is generated from thermal sources where the main raw material used is coal. Around 83% of thermal power is generated using coal as a raw material, whereas 16% of thermal power is generated with the help of Gas and 1% of thermal power is generated with the help of Oil.