Indian Economy MCQs

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World Economic Outlook is a survey conducted and published by the International Monetary Fund.

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The primary difference between a free trade area and a customs union is that members of a customs union adopt a common set of external trade barriers. In a free trade area, member countries eliminate tariffs among themselves but maintain their own external tariffs. Examples include NAFTA (now USMCA) as a free trade area and the European Union as a customs union, which has a unified external tariff policy.

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India has used a managed floating exchange rate regime since 1993. The Reserve Bank of India intervenes in the foreign exchange market to reduce excessive volatility. The exchange rate is mainly market-determined but subject to RBI intervention. The International Monetary Fund describes India’s regime as a managed float. RBI does not follow a fully fixed or fully floating rate policy.

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The tertiary industry is the segment of the economy that provides services to its consumers, including a wide range of businesses such as financial institutions, schools and restaurants. It is also known as the tertiary sector or service industry/sector.

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Financial inclusion in India refers to providing affordable financial services such as payments, savings, credit, and insurance. The Reserve Bank of India has promoted financial inclusion through initiatives like Jan Dhan Yojana, launched in 2014, to increase banking penetration and usage. Financial inclusion is essential in India’s economic and social policy frameworks as per RBI guidelines and government mandates.

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The money market is a key component of the financial system. It is a market for short-term funds with maturity ranging from overnight to one year. The basic function of money market is to provide efficient liquidity position for commercial banks, financial institution, Mutual funds, insurance companies, corporate etc

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There are three component of capital market are:- EQUITY MARKET, DEBT MARKET and DERIVATIVE MARKET.

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The “Socialistic Pattern” is derived from the Mixed Economy system. In a mixed economic system, the features of both capitalism and socialism are amalgamated. It safeguards private property ownership and promotes certain economic liberty regarding capital usage. Yet, it also permits the government to meddle in economic activities to fulfill societal goals. This marriage of capitalism and socialism in a mixed economy paves the way for the emergence of the so-called “Socialistic Pattern”.

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Indian Born Gita Gopinath became the first woman ever and second India-born to hold the prestigious post of Chief Economist to IMF in 2019. The first India-born to hold the top position at IMF was former RBI governor Raghuram Rajan.

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In a Mixed Economic system both the profit-making as well as social welfare is the motive. The government interferes where social justice is to be provided whereas in other sectors the profit motive will be driving force of the economy.