Indian Economy MCQs

Notes:
The principle of reciprocity in the WTO framework means that when one member lowers trade barriers, other members are expected to do the same in return. This mutual concession promotes fair trade practices and encourages countries to engage in negotiations. Reciprocity is fundamental to the WTO’s goal of reducing trade barriers globally, fostering a more open and equitable trading system.

Notes:
Overall Trade-Distorting Domestic Support (OTDS) is defined in the context of WTO agriculture negotiations. OTDS includes Aggregate Measure of Support (AMS), Blue Box payments, and de minimis support. OTDS commitments were discussed during the Doha Round agriculture talks beginning in 2001. WTO ministerial conferences periodically review and negotiate OTDS reduction by member countries. India and other countries have submitted proposals focusing on agriculture OTDS at these negotiations.

Notes:
Arbitrage is the process of simultaneous buying and selling of an asset from different platforms, exchanges or locations to cash in on the price difference. While getting into an arbitrage trade, the quantity of the underlying asset bought and sold should be the same. Only the price difference is captured as the net pay-off from the trade.

Notes:
The World Economic Forum publishes the Travel and Tourism Development Index. The index replaced the Travel & Tourism Competitiveness Index in 2021. TTDI assesses the tourism sectors of various countries. The World Economic Forum is headquartered in Geneva, Switzerland and was founded in 1971. The latest TTDI report was released in 2024.

Notes:
Mixed Banking is the system in which banks undertake activities of commercial and investment banking together.

• These banks give short-term and long-term loans to industrial concerns.
• The banks appoint experts which give valuable advice on various financial issues and also help gauge the financial health of companies.
• Industries don’t have to run to different places for differential financial needs.
• They thus promote rapid industrialization.
• They may however pose a grave threat to liquidity of a bank and lead to bad debts.

Notes:
The Reserve Bank of India manages the rupee’s exchange rate against a basket of foreign currencies since 1975. Before 1975, the rupee was pegged to the British Pound Sterling. The currency basket includes the US Dollar, Euro, Japanese Yen, and British Pound. India shifted from single-currency pegs to mitigate external shocks and improve stability.

Notes:
A market is a place where forces of demand and supply operate and where buyers and sellers interact to trade goods, services, or contracts or instruments for money or barter.

Notes:
As the calculation of national income is the total value of all goods and services in an economy the real increase happens when the output production increases. The rate change won’t affect because while calculating real national income we take into account the prices of base year. So even the inflation effect is also removed.

Notes:
In China and Russia, most decisions were made by the central government. This type of economy was the core of the communist philosophy. So both these economies are based on the socialist model. (Note: As of 2026, China maintains its socialist market economy under the Communist Party, while Russia retains centralized state control in key sectors despite market reforms.)

Notes:
Tata Group acquired Air India from the government in 2022, regaining control after nearly 69 years of public ownership. Air India was initially founded as Tata Airlines in 1932 by J.R.D. Tata. The acquisition marks Air India’s return to its original founders.