Indian Economy MCQs

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Stagflation refers to persistent high inflation coupled with high unemployment and stagnant demand /growth in economy.
High Inflation + Low Economic Growth {or conditions of recession} + Low Employment Generation = Stagflation

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The agricultural industry widely uses urea, a white crystalline solid containing 46 percent nitrogen as an animal feed additive and fertilizer. Urea has the highest nitrogen content of all solid fertilizers at 46% N.

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Unclaimed deposits are deposits where the proceeds/maturity has not been claimed for a period of 10 years or more. In other words, term deposits are deemed unclaimed if they are inactive/inoperative for more than 10 years.

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Organization of the Petroleum Exporting Countries (OPEC) is estimated to account for around 40-45% of total global oil exports currently. In 2021, OPEC’s share of global oil exports was around 43%. As of 2022, it was around 40% of global oil exports.

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Circular trading is a fraudulent practice where sell orders are entered by a broker who knows that offsetting buy orders, the same number of shares at the same time and at the same price, have either been or will be entered. Essentially, it is a deceptive practice that creates the illusion of extensive trading activity in a security to attract further investment which often leads to artificially inflated stock prices.

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Net National Product at Factor Cost generally denotes National Income.

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The Competition Commission of India (CCI) was set up to replace the anachronistic Monopolies and Restrictive Trade Practices Commission (MRTPC). It was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. It has one chairman and six members. It is the youngest and the only cross-sector regulator in India.

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The Laffer curve is a theoretical concept in economics that illustrates the relationship between tax rates and government revenue. The curve is named after economist Arthur Laffer, who popularized the concept in the 1970s. The basic idea behind the Laffer curve is that there is a certain tax rate that will maximize government revenue. At a 0% tax rate, the government will obviously not collect any revenue. At a 100% tax rate, the government will also not collect any revenue because people will have no incentive to work. The Laffer curve suggests that there is a point in between these two extremes where the government will collect the most revenue. The exact shape and location of the Laffer curve will vary depending on various factors, such as the state of the economy and the efficiency of the government’s tax collection system.

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The head of the “Board for Financial Supervision” (BFS) in India is the RBI Governor. Established in 1994, the BFS is responsible for overseeing the financial system, ensuring its stability and soundness. The Reserve Bank of India (RBI) plays a crucial role in regulating the banking sector, and the Governor, as the chief executive, leads this board.

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The correct answer is “Only 1 & 2.” 1. Outsourcing of Goods (1): This leads to an increase in imports, which negatively impacts the current account balance. 2. Outsourcing of Services (2): Similar to goods, outsourcing services results in payments to foreign entities, increasing the current account deficit. 3. Increase in Domestic Tourism (3): This does not affect the current account negatively, as it involves spending within the country. 4. Increase in Foreign Tourist Arrival (4): This positively impacts the current account by bringing in foreign currency. Trivia: The current account is a key component of a country’s balance of payments, reflecting trade in goods and services, income, and current transfers.