Indian Economy MCQs

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Cross-selling involves suggesting additional complementary products to a customer’s original purchase. In fast-food chains, offering fries with a sandwich exemplifies this. According to retail practices adopted since the 1970s, cross-selling combos are widely used to increase overall sales figures. Major restaurant chains such as McDonald’s and Burger King commonly use this technique globally.

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Milton Friedman published “The Case for Flexible Exchange Rates” in 1953. Friedman’s essay advocated flexible exchange rates to provide monetary policy independence. The paper provided the foundational arguments and theory supporting flexible exchange rate systems over fixed ones. Friedman’s analysis influenced international monetary economics from the 1950s onward.

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Profit/loss on sale of assets is an entry in the manufacturing company` s P & L account under the heading other income. In banks the other income includes income from distribution of financial products, income from investment banking related activities, treasury gains and other fee incomes

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Brazil, India, and Mexico have the highest outstanding IBRD loan commitments as per recent World Bank data. Brazil’s net IBRD commitments lead global figures. India was among the top recipients in 2023, borrowing over 4.3 billion U.S. dollars. Mexico also remains a principal IBRD borrower for infrastructure and development projects in recent years. These three countries routinely top IBRD debt statistics globally.

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Cost-push inflation arises from increases in production costs like wages and raw materials (statement 1). It cannot be controlled easily compared to demand-pull inflation (statement 2 is incorrect). Inflation reduces the purchasing power of money (statement 3). Supply shocks, e.g., rising oil prices, often trigger cost-push inflation (statement 4). Thus, 1, 3, and 4 are correct.

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The Directorate of Marketing and Inspection (DMI)  operates under the Department of Agriculture, Cooperation, and Farmers Welfare, Ministry of Agriculture and Farmers Welfare. It was established in 1935 and serves as the regulatory body responsible for promoting and regulating marketing and quality control of agricultural and allied products in the country.

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Economic growth results in higher disposable income available with the consumers which increases the overall demand along with the supply available for the consumers. This increase in demand spurs inflation, which eventually becomes a necessary evil for a growing economy.

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As per the Cooperative Societies Act, Reserve Bank of India (RBI) regulates the cooperative banks and these are governed by the Banking Regulations Act, 1949 and the Banking Laws (Cooperative Societies) Act, 1965.

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Foreign banks in India failing to meet priority sector lending targets must deposit the shortfall with SIDBI for one year as per RBI guidelines. Domestic banks deposit shortfalls in the Rural Infrastructure Development Fund under NABARD. The RBI’s 2020 guidelines specify a 40 percent lending target for foreign banks with 20 or more branches in India, based on their Adjusted Net Bank Credit.

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The primary difference between a free trade area and a customs union is that members of a customs union adopt a common set of external trade barriers. In a free trade area, member countries eliminate tariffs among themselves but maintain their own external tariffs. Examples include NAFTA (now USMCA) as a free trade area and the European Union as a customs union, which has a unified external tariff policy.