Indian Economy MCQs

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Sir Chintaman Dwarkanath Deshmukh was the first Indian to be the governor of the Reserve Bank of India (RBI), serving from 1943 to 1949. He played a crucial role in shaping India’s monetary policy post-independence and was instrumental in establishing the RBI as a key institution in the Indian economy. Deshmukh was also a prominent figure in the Indian banking sector, contributing to various financial reforms.

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India has established itself as a major player in the global steel industry, holding the position of the world’s second-largest steel producer after China and the top producer of sponge iron. The country is also the third-largest consumer of finished steel globally, trailing only China and the United States. India’s steel sector has shown remarkable growth, with production increasing by 8.5% year-on-year from January to April 2024, outperforming other top steel producers who experienced declines during the same period. Looking ahead, the National Steel Policy 2017 sets an ambitious target to nearly double India’s steel production capacity from around 161 million tonnes to 300 million tonnes. The country’s steel industry is supported by several equipment manufacturers, including Heavy Engineering Corporation, Larsen & Toubro, and CG Industrial Solutions, further strengthening its position in the global market.

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A competitive firm maximizes its profit when its marginal revenue equals its marginal cost. Marginal revenue is the additional revenue earned by the firm from selling an additional unit of output. When marginal revenue equals marginal cost, the firm is earning the maximum possible profit.  The marginal cost of production and marginal revenues are two determinants used to analyze the profitability of the production. When the marginal cost is below the marginal revenue, the firm can increase its revenue by producing more.  When a competitive firm maximizes profit, profits are always greater than 0.

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Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the Ministry of Finance to review every quarter the trends in Receipts and Expenditure in relation to the Budget and place it before both Houses of Parliament. As part of this exercise, the Economic Division of Department of Economic Affairs prepares the Mid-Year Review in the second quarter of each year for placing it before Parliament. In addition, at the end of first quarter and third quarter a Macro-Economic backdrop statement is prepared and provided to the Budget Division for incorporating in the review of quarterly receipts and expenditure

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The correct representation of the Money Multiplier is the ratio of Broad Money (M3) to Reserved Money (M0), expressed as M3/M0. The Money Multiplier indicates how much money supply can increase based on the reserves held by banks. M0 represents the total of a country’s physical currency, while M3 includes all liquid or near-liquid assets. This relationship is crucial in understanding monetary policy and banking operations.

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Foreign Direct Investment (FDI) involves long-term investments in physical assets, bringing capital, technology, and management expertise to a country. In contrast, Foreign Institutional Investment (FII) primarily involves short-term capital investments in financial markets, such as stocks and bonds, without direct control over businesses. FDI is typically more stable and less volatile than FII, which can quickly exit markets, impacting local economies. FDI often targets specific sectors for development, while FII can invest across various market segments.

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A Custodial Account in India is specifically designed for minor persons, allowing adults to manage assets on behalf of minors until they reach the age of majority, which is 18 years. This type of account ensures that minors can benefit from investments and savings while being protected under legal guardianship. Custodial accounts are commonly used for educational savings and other financial planning purposes for children.

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All given statements are correct

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According to FERA ,1973 Foreign Exchange means Foreign Currency, which includes: Any Draft Traveller’s Cheque Letters of Credit Bill of Exchange expressed in Indian Currency but payable in Foreign Currency

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In the Avadi session of Indian National Congress in 1955 the Congress stated that object of the planning has to be “Socialist Pattern” and not absolute “Socialism”. The Socialist pattern meant that India has to be a mixed economy where private & public sector would coexist. In the same year, Imperial Bank of India, which came into being in 1921, came under the public sector and became “State Bank of India” in 1955.