Indian Economy MCQs

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The Bank Index commonly known as “NIFTY BANK” or “Bank NIFTY” was launched by India Index Service and Product Limited (IISL) in the year 2000. The index has 12 most liquid and large capitalized stocks from the banking sector which trade on the National Stock Exchange (NSE). It provides investors and market intermediaries a benchmark that captures the capital market performance of Indian Banking sector.  At present (July, 2024) , these banks include AU Small Finance Bank, Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, Indusind Bank, Kotak Mahindra Bank, PNB, RBL Bank and SBI.

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In progressive taxation, the tax liability increases with individual or entity income. This is based on principle of “ability to pay”. Under this system, lowest income people are generally exempted while highest income people pay highest taxes. Income Tax is thus an example of progressive tax. Progressive taxation results in redistribution of income from rich to poor.

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In the context of industry, a lockout is a temporary measure used by employers to prevent workers from entering the workplace. This is typically done in response to a labor dispute or strike, and is intended to protect the employer’s property and ensure the safety of workers and others on the premises. A lockout may be imposed by an employer unilaterally, or it may be agreed upon as part of a collective bargaining agreement with a labor union. During a lockout, workers are not allowed to enter the workplace or perform their duties, and the employer may not provide any work or pay to the affected workers. A lockout can have significant economic and social consequences for both the employer and the affected workers, and is generally considered a last resort in the resolution of labor disputes.

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Full form is “Build, Operate, Lease, Transfer”. This model refers to a system where a private entity builds and operates an infrastructure project for a fixed period after which the ownership and operations are transferred back to the public entity through a lease arrangement.

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Phillips curve developed by A. W. Phillips says that the inflation and unemployment have a stable and inverse relationship; which means that higher inflation is associated with lower unemployment and vice versa. However, later it was proved that this curve is applicable only in the short-run, and in long-run, inflationary policies would not decrease unemployment.

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Issuance of currency makes RBI the sole agent of the government to issue currency notes, Ways and means advances are advances to the state and central government, Maintenance of currency chests comes under currency management, Collection of credit information is related to regulation of borrowers, Liquidity adjustment facility is the most appropriate option which gives an indication of RBI working as bankers` Bank.

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The Trade and Economic Relations Committee (TERC) in India is headed by the Prime Minister. This committee was established to enhance India’s trade relations and economic policies, reflecting the government’s focus on international trade as a key driver of economic growth. The Prime Minister’s leadership underscores the importance of trade in India’s economic strategy.

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Reserve Tranche Position (RTP) refers to a member country’s access to its quota in the International Monetary Fund (IMF). Each member can withdraw a portion of its quota without stringent conditions, known as the reserve tranche. This mechanism allows countries to access funds quickly during balance of payments crises. The RTP is crucial for maintaining liquidity in the global economy.

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The Directorate General of foreign Trade (DGFT) is the agency of the Ministry of Commerce and Industry of the Government of India, responsible for execution of the import and export Policies of India.

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Doha round of negotiations has remained stalled since 2008, primarily over the issue of huge trade-distorting subsidies being given to farmers by the rich countries. The fundamental objective of the DDA was to improve trading prospects for developing nations. It included issues such as agriculture, greater market access in industrial products, enhanced foreign direct investments, regulations relating to services trade, trade-related aspects of intellectual property rights, rules on anti-dumping, subsidies and trade facilitation. While India and other developing nations want a reaffirmation to conclude the DDA first, developed countries seek to mostly dilute the negotiations and widen the mandate with new issues, including e-commerce and global value chain.