Indian Economy MCQs

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Inflation reduces currency purchasing power and drives general price increases. Banks respond by raising loan prices due to higher costs, including increased wages and operational expenditures. Central banks often hike interest rates during inflation to control rising prices. Higher interest rates result in increased loan pricing by banks to maintain profit margins.

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The correct answer is “Letter of Credit.” A Letter of Credit (LC) is a financial document issued by a bank that guarantees payment to the exporter upon presentation of specified documents, such as shipping and insurance documents. This arrangement reduces risk for both parties in international trade, ensuring that the exporter receives payment and the importer receives the goods. LCs are widely used in global commerce, with the first recorded use dating back to the 12th century in the Mediterranean trade.

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White Label ATMs in India are owned and operated by non-banking entities authorized by the Reserve Bank of India since 2012. These ATMs do not display any bank logo and can be used by customers of any bank for basic transactions. Tata Communications Payment Solutions was the first company to set up White Label ATMs under the ‘Indicash’ brand in India.

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Food subsidy in India is provided through multiple channels. The government fixes Central Issue Prices for subsidized foodgrains, supplies them through the Public Distribution System, and also supports the Food Corporation of India for procurement, storage, and distribution. Hence, all three statements are correct.

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Narrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand have a fixed maturity period and hence can not be withdrawn before expiry of this period. When we add the time despots into the narrow money, we get the broad money, which is denoted by M3. M3 = Narrow money + Time Deposits of public with banks Here, you must note that Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money. When you add the Post Office Savings money also into the M3, it becomes M4.

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Implementation of Goods and Services Tax (GST) could help government raise tax revenues and reduce fiscal deficit. Fiscal deficit can be reduced by rationalizing subsidies in different sectors. Reduction in Income Tax will reduce government’s earnings and hence will increase budget deficit.

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Both statements are correct. Adopt a Heritage 2.0 is a programme of the Archaeological Survey of India under the Ministry of Culture. It invites public and private sector entities, NGOs, trusts and societies to help provide visitor-friendly amenities at protected monuments. The focus is on non-conservation support such as washrooms, drinking water, seating, signage and other facilities that improve the tourist experience while archaeological conservation remains with ASI experts.

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The Kudremukh Iron Ore Company Limited, formed in 1976 in Karnataka, transported mined ore via slurry pipeline to Panambur. Export operations used New Mangalore Port. Kudremukh mine ceased operations in 2006 after Supreme Court directive. KIOCL now exports pellets through Mangalore port. New Mangalore Port is a major port located in Karnataka on the Arabian Sea, operational since 1974.

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In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. The introduction of a tax drives a wedge between the price consumers pay and the price producers receive for a product, which typically imposes an economic burden on both producers and consumers.

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The SARFAESI Act allowed the creation of asset reconstruction companies (ARC) and allowed banks to sell their non-performing assets to ARCs.