Indian Economy MCQs

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Any export that does not have a tangible physical presence (e.g. expertise, insurance underwriting). Here, Invisible Export means export of Services

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Adam smith is considered as father of Modern Economics. In his book “The nature & causes of wealth of the Nation’s 1776, he has described economics as science of wealth. According to him economy is the study of wealth only and it deals with its production and consumption. Only material goods which are scarce and useful are wealth.

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The phase that is commonly used to describe a steady rise in the general level of prices, income, output, and employment is economic recovery.

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Income inequality is a measure of how unevenly income is distributed throughout a population in a region. Illiteracy, Low Agriculture productivity and faster population growth are the main economic factors contributing to poverty.

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The main motive of the government behind setting up fair price shops is to provide essential commodities to people living below the poverty line. The government buys commodities from farmers at their desirable prices and sells them through fair price shops at half price. This allows people who are unable to buy things from the market due to high prices to purchase necessary products.
Fair price shops are also known as ration shops. Any family with a ration card can purchase a stipulated amount of food grains, sugar, kerosene, etc..
Dual pricing, also known as dynamic pricing or surge pricing, is a pricing strategy in which a business charges different prices for the same product or service based on factors such as demand, inventory levels, or weather conditions. The purpose of dual pricing is to drive other competitors out of the business in order to dominate a product niche or even an entire industry.

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The “Soft Loan Window” of the World Bank is commonly referred to as the International Development Association (IDA). It was founded in 1960 and provides low or zero-interest loans and grants to the world’s poorest countries. These “soft” loan terms allow for improved economic development and poverty reduction. Unlike the World Bank, the IDA seeks to reduce poverty by providing loans to developing countries for programs that are intended to boost economic growth and improve living conditions.

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Deflation benefits salary earners because it increases the purchasing power of money. When prices fall, the real value of wages rises, allowing consumers to buy more with the same income. In contrast, pensioners may suffer if their fixed incomes do not adjust for deflation, equity holders may see asset values decline, and debtors face higher real debt burdens. Historically, deflation has been linked to economic downturns, such as the Great Depression, where falling prices led to reduced consumer spending.

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The correct answer is “State Government 100%.” In India, stamp duty on promissory notes is governed by the Stamp Act of 1899, which allows state governments to levy stamp duty. Each state has the authority to set its own rates, and the revenue collected from stamp duty is retained entirely by the state government. This is a important source of revenue for states, contributing to their financial resources for development and public services.

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The correct answer is “Base Rate.” The Base Rate is the minimum interest rate set by a bank for lending to its customers. It serves as a benchmark for various loans and is influenced by factors like the central bank’s policy rate and the bank’s cost of funds. The Base Rate ensures that banks cover their costs and maintain profitability while lending. In many countries, including India, the Base Rate is a crucial component of monetary policy and financial stability.

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The bank act as a trustee to the person as the person is withdrawing his own money; he is neither taking loan nor depositing money for fixed duration to bank, for him to be debtor or creditor.