Indian Economy MCQs

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:
In India, the exchange rate system is managed floating from 1994 onwards and hence the relevant currency movements are appreciation and depreciation. Managed float regime is the environment in which exchange rates fluctuate from day to day.

Notes:
The Diesel Locomotive Works (DLW) in Varanasi, India, is a production unit owned by Indian Railways, that manufactures diesel-electric locomotives and its spare parts. It is the largest diesel electric locomotive manufacturer in India. It is located on DLW to BHU road of the metropolitan city of Varanasi.

Notes:
Inflation is a situation of a sustained increase in the general price level in an economy.
There are two main causes of inflation: Demand-pull and Cost-push. Both are responsible for a general rise in prices in an economy.
Cost-push occurs when supply cost force prices higher. If the inflation in an economy is of the cost-push type, then the inflationary situation usually leads to a fall in production.
Demand-pull inflation is used by Keynesian economics to describe the price levels rise because of an imbalance in the aggregate supply and demand. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices go up.

Notes:
The supply curve reflects the relationship between the price and quantity supplied graphically. It is a positively sloped curve. It becomes flatter in the long run as price becomes constant after a certain time.

Notes:
British economist, John Maynard Keynes, argued against the long-held view that free markets would automatically provide full employment, spearheading a revolution in economic thinking. He proposed that state intervention is required during boom and bust cycles of the economy, a policy adopted by most western economies during the thirties. This went out of fashion by the seventies, but the world still looks to the Keynesian policy during economic crises.

Notes:
Abhijit Banerjee is the author of “Volatility and Growth”. It has long been recognized that productivity growth and the business cycle are closely interrelated.

Notes:
The Unorganised sector is marked by low incomes, unstable and irregular employment, and lack of protection either from legislation or trade unions. They use mainly labor-intensive technology. The workers in the unorganized sector, are so scattered that the implementation of the Legislation is very inadequate and ineffective.

Notes:
Post-1991 LPG reforms the tertiary sector has grown more than others. It contributes about 54% to GDP employing 31% workforce. The highly educated English speaking labour in the country has taken advantage of this growth.

Notes:
The SDG index by NITI Aayog has been constructed spanning across 13 out of 17 SDGs (leaving out Goals 12, 13, 14, and 17). It tracks the progress of all the States and Union Territories (UTs) on a set of 62 National Indicators, measuring their progress on the outcomes of interventions and schemes of the Government of India.