Indian Economy MCQs

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Caste-based social discrimination in India is classified as a social, not economic, factor. The caste system leads to social exclusion and restricts access to education and jobs for marginalized groups such as Scheduled Castes and Scheduled Tribes. Social discrimination originates from traditional societal structures and legal history, rather than economic variables like production levels, employment rate, or population growth.

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A balanced budget occurs when a government’s total revenue matches its total expenditure within a fiscal year. The concept is found in public finance literature and is used by various countries’ budgets. The Government of India’s budgets list balanced budgets when revenue and expenditure are equal with no deficit or surplus.

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In India, a new private bank is legally incorporated under the Companies Act 2013 as a banking company. The Companies Act 2013 governs formation, registration, and operation of companies in India. Banks must first be incorporated as companies before applying for a banking license from the Reserve Bank of India. The Companies Act 2013 replaced the Companies Act 1956.

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Agricultural and Processed Food Products Export Development Authority (APEDA) is an apex body under the Ministry of Commerce and Industry, Government of India, responsible for the export promotion of agricultural products. Its headquarters are located in New Delhi. It is a statutory body established under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December, 1985.

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Demand-pull inflation refers to the inflation from rapid growth in aggregate demand and when excess demand causes ‘too much money chasing too few goods.’ This generally happens when an economy is growing at a faster rate.

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In 1991 The Reserve Bank of India had proposed the committee chaired by M. Narasimham, former RBI Governor to review the Financial System and aspects relating to the Structure, Organization, Procedures and Functioning of the financial system. Committee submitted two reports, in 1992 and 1998, which laid significant thrust on enhancing the efficiency and viability of the banking sector. The Narasimham Committee laid the foundation for the reformation of the Indian banking sector.

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A “Hot card” in the context of credit cards in India refers to a “Lost Credit Card.” When a card is reported lost or stolen, it is immediately flagged as hot to prevent unauthorized transactions. This term is crucial for fraud prevention in the banking sector. In India, the Reserve Bank of India (RBI) mandates that banks must have robust systems to handle such cases efficiently.

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Chetan Bhagat worked as an investment banker at Goldman Sachs and Deutsche Bank in Hong Kong for about 11 years. He graduated from IIT Delhi in 1995 and IIM Ahmedabad in 1997. Bhagat wrote his first novel, Five Point Someone, while still an investment banker. He left banking after publishing his third novel in 2008.

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The Reserve Bank of India purchases government securities in open market operations to increase liquidity in the banking system. Increased liquidity leads to higher money supply in the economy. Higher money supply may lower interest rates and promote borrowing. This process is utilized to support economic growth and is considered an expansionary monetary policy. Open market purchase of securities is not used to control inflation.

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A bilateral monopoly is a market structure consisting of both a monopoly (a single seller) and a monopsony (a single buyer).