Indian Economy
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Question 1 of 5
1. Question
2 points1. Arrange the following in chronological order:
- Revamped Public Distribution System
- Targeted Public Distribution System
- Annapurna Schemes
- Food for Work Programme (FWP)
The correct order is:
Correct
Answer: B
Explanation:
- Revamped Public Distribution System- 1992
- Targeted Public Distribution System- 1997
- Annapurna Schemes- 2000
- Food for Work Programme- 1977
Incorrect
Answer: B
Explanation:
- Revamped Public Distribution System- 1992
- Targeted Public Distribution System- 1997
- Annapurna Schemes- 2000
- Food for Work Programme- 1977
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Question 2 of 5
2. Question
2 pointsConsider the following statement regarding subsidy:
- A subsidy is a financial aid that the government provides to an economic sector.
- Interest-free loans are examples of direct subsidy.
- Insurance is an example of an indirect subsidy.
Which of the statement given above are correct?
Correct
Answer: D
Explanation:
- A subsidy is a financial aid that the government provides to an economic sector. This is to promote economic and social policy. A subsidy can be either a direct subsidy or an indirect subsidy.
- Cash grants and interest-free loans are examples of direct Subsidies.
- Insurance, low-interest loans, tax breaks, etc., are examples of indirect subsidy.
Incorrect
Answer: D
Explanation:
- A subsidy is a financial aid that the government provides to an economic sector. This is to promote economic and social policy. A subsidy can be either a direct subsidy or an indirect subsidy.
- Cash grants and interest-free loans are examples of direct Subsidies.
- Insurance, low-interest loans, tax breaks, etc., are examples of indirect subsidy.
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Question 3 of 5
3. Question
2 pointsWhich of the following statements is/are correct?
- Human Capital and Economic Growth are deeply related to each other.
- Higher human capital can lead to higher and better economic growth.
- Economic growth is measured by evaluating the Gross National Product of a country.
Select the correct answer using the code given below:
Correct
Answer: B
Explanation:
- Human Capital and economic growth are deeply related to each other.
- Higher human capital can lead to higher and better economic growth.
- Economic growth is measured by evaluating the Gross Domestic Product of a country.
Incorrect
Answer: B
Explanation:
- Human Capital and economic growth are deeply related to each other.
- Higher human capital can lead to higher and better economic growth.
- Economic growth is measured by evaluating the Gross Domestic Product of a country.
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Question 4 of 5
4. Question
2 pointsWith reference to the Fiscal Drag, consider the following statement:
- The government will get low tax revenue at the time of Fiscal Drag.
- Fiscal Drag often happens due to inflation.
- It is an automatic stabilizer to demand stability.
Which of the statements given above is/are incorrect?
Correct
Answer: A
Explanation:
- The first point to remember about fiscal drag is that government will get more tax revenue (mainly income tax) at the time of fiscal drag. Fiscal drag is the tendency of revenue from taxation to rise as a share of GDP in a growing economy. Fiscal drag may happen due to inflation or the fiscal policies of the government.
- Fiscal drag is normally associated with progressive tax rates. Because of progressive taxes, the government will get more taxes when the economy is booming. This also helps slow the rate of increase in demand, reducing the pace of growth, making it less likely to result in higher inflation. Thus, fiscal drag is an automatic stabilizer, as it acts naturally to keep demand stable.
Incorrect
Answer: A
Explanation:
- The first point to remember about fiscal drag is that government will get more tax revenue (mainly income tax) at the time of fiscal drag. Fiscal drag is the tendency of revenue from taxation to rise as a share of GDP in a growing economy. Fiscal drag may happen due to inflation or the fiscal policies of the government.
- Fiscal drag is normally associated with progressive tax rates. Because of progressive taxes, the government will get more taxes when the economy is booming. This also helps slow the rate of increase in demand, reducing the pace of growth, making it less likely to result in higher inflation. Thus, fiscal drag is an automatic stabilizer, as it acts naturally to keep demand stable.
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Question 5 of 5
5. Question
2 pointsWith reference to the Money Market Instruments, which of the following statements is not correct?
- Call money is mainly used by the banks to meet their temporary requirement of cash.
- A treasury bill is a promissory note issued by the Government of India to meet the short-term requirement of funds.
- Certificate of Deposit (CDs) is short-term instruments issued by Commercial Banks.
Select the correct answer using the code given below:
Correct
Answer: B
Explanation:
- The banks mainly use call money to meet their temporary requirement of cash.
- A treasury bill is a promissory note issued by the RBI to meet the short-term requirement of funds.
- Certificate of Deposit (CDs) is short-term instruments issued by Commercial Banks and Special Financial Institutions (SFIs), freely transferable from one party to another.
Incorrect
Answer: B
Explanation:
- The banks mainly use call money to meet their temporary requirement of cash.
- A treasury bill is a promissory note issued by the RBI to meet the short-term requirement of funds.
- Certificate of Deposit (CDs) is short-term instruments issued by Commercial Banks and Special Financial Institutions (SFIs), freely transferable from one party to another.
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