Indian Economy MCQs

Notes:
Under the Statutory Liquidity Ratio (SLR), banks must maintain liquid assets such as cash, gold, or approved securities with themselves. SLR is mandated by the Reserve Bank of India under the Banking Regulation Act, 1949. The current SLR requirement is 18% of Net Demand and Time Liabilities (NDTL) as per RBI policy. These assets are not kept with the RBI.

Notes:
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.

Notes:
Plantation crops are crops that are grown on large farms, called plantations, and are typically grown for commercial purposes. These crops are often grown on a large scale using specialized techniques and equipment, and are typically exported to other countries for sale. Some examples of plantation crops include:

1. Sugar cane: This is a tropical grass that is grown for its sweet, juicy stalks, which are used to make sugar.
2. Rubber: This is a tree that is grown for its latex, which is used to make rubber.
3. Tea: This is a bush that is grown for its leaves, which are used to make tea.
4. Coffee: This is a shrub that is grown for its beans, which are used to make coffee.
5. Coconut: This is a tree that is grown for its fruit, which is used to make coconut milk and oil.
6. Banana: This is a tree that is grown for its fruit, which is a popular food around the world.
7. Palm oil: This is a tree that is grown for its fruit, which is used to make palm oil.
8. Tobacco: This is a plant that is grown for its leaves, which are used to make tobacco products such as cigarettes.
9. Cotton: This is a plant that is grown for its fibers, which are used to make textiles and other products.

Plantation crops are an important source of income and employment for many countries, and they contribute significantly to the global economy.

Notes:
Government of India on the basis of the Coinage Act, 1906

Notes:
Fair price shops form part of India’s Public Distribution System since 1947. They provide essential commodities such as grains, sugar, and kerosene to people below the poverty line at subsidized prices. The Targeted Public Distribution System was introduced in 1997 to further improve the food security for economically vulnerable sections. Only ration cardholders can purchase from these shops as per government rules.

Notes:
Bank Rate Policy, Reserve Ratio Requirements, Liquidity Adjustment Facility, and Open Market Operations are all principal monetary policy instruments used by central banks including RBI. They regulate money supply, liquidity, and interest rates in the economy. Each plays a specific role in achieving monetary stability and economic objectives as part of monetary policy operations.

Notes:
The National Social Assistance Programme was launched in 1995 during 8th five year plan as a Centrally Sponsored Scheme of the Government of India. The scheme provides financial assistance to the elderly, widows and persons with disabilities in the form of social pensions.

Notes:
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.

Notes:
The correct answer is “Invisible Export.” Income from tourism is classified as an invisible export because it involves services provided to foreign visitors, generating revenue without the physical transfer of goods. This aligns with the economic concept where exports of services (like tourism) contribute to a country’s balance of payments.

Notes:
RBI has four subsidiaries viz. Deposit Insurance and Credit Guarantee Corporation, DICGC; National Housing Bank; Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) and NABARD.