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Quiz 637: Indian Economy for All Examinations

1.Public Distribution System(PDS) is operated under the responsibility of the:
1.Central Government
2.State Governments
[A]Only 1
[B]Only 2
[C]Both 1 and 2
[D]Neither 1 nor 2

Both 1 and 2
PDS is operated under the joint responsibility of the Central and the State Governments.The Central government through FCI has the following responsibilities:
1. Procurement, storage, transportation of food grains
2.Bulk allocation of food grains to the State Governments.
The State Government’s responsibility is operational. They are as follows:Identification of families below the poverty line, Issue of Ration Cards,Supervision of the functioning of Fair Price Shops.

2.Which of the following agricultural commodity of India gives largest in terms of export value?
[A]Tea
[B]Basmati Rice
[C]Spices
[D]Cotton

Basmati Rice

3.Arrange the following in the descending order of the largest agricultural imports of India:
1.Pulses
2.Wood and Wood Products
3.Edible Vegtable Oils
[A]1-2-3
[B]1-3-2
[C]2-1-3
[D]3-2-1

Option [D]
Edible Oil-45%
Wood and Wood Products-16%
Pulses-13%

4.Consider the following Statements:
1.Indicative Planning is a feature of ‘Mixed Economy’.
2.Perspective Planning is used by socialist countries where each and every aspect of planning is controlled by the State.
Which of the above Statement(s) is/are correct?
[A]Only 1
[B]Only 2
[C]Both 1 and 2
[D]Neither 1 nor 2

Only 1
Indicative planning, which generally puts forward some broad principles and guidelines to achieve some specific goals. Indicative planning is flexible. It is peculiar to mixed economy and both the public and private sector co exist.
Comprehensive or imperative planning is used by socialist countries and each and every aspect of planning is controlled by the State. Perspective planning refers to long term planning for a period of 15, 20, 25 yrs, however objective of perspective planning can be achieved by breaking the period in 5‐7 yr plans.

5.Which of the following Price Indices of India is considered for measuring ‘Headline Inflation’?
[A]GDP Deflator
[B]CPI-AL/RL
[C]CPI-IW
[D]WPI

WPI
Because it is available more frequently.

6.Consider the following Statements:
1.Core Inflation is essentially demand driven.
2.Core Inflation includes items that face volatile price movement.
Which of the following Statement(s) given above is/are correct?
[A]Only 1
[B]Only 2
[C]Both 1 and 2
[D]Neither 1 nor 2

Option [A]
Manufacturing inflation, also known as ‘core inflation’, is essentially driven by demand and makes up the non‐food basket of the wholesale price index.Core inflation is a measures of inflation that excludes items that face volatile price movement, notably food and energy. It is, therefore, a preferred tool for framing long‐term policy.

7.Consider the following Statements regarding the Office of Economic Advisor(OEA):
1.It is attached to the Ministry of Finance.
2.The weekly compilation and Publication of Wholesale Price Indices (WPI) is done by the Office of Economic Advisor.
Which of the Statement(s) given above is/are correct?
[A]Only 1
[B]Only 2
[C]Both 1 and 2
[D]Neither 1 nor 2

Only 2
The Office of the Economic Advisor (OEA) is an attached office of the Ministry of Commerce & Industry.

8.Which among the following is the oldest Public Sector Bank of India?
[A]Punjab National Bank
[B]Imperial Bank of India
[C]Allahabad Bank
[D]Central Bank of India

Allahabad Bank

9.Consider the following Statements regarding Non-Banking Finance Institutions(NBFCs):
1.NBFCs can also engage in Micro-Finance Activities.
2.Housing-finance companies form a distinct sub-group of the NBFCs.
3.The deposit insurance facility of the Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors.
Which among the above Statement(s) is/are not correct?
[A]Only 1
[B]1 and 3
[C]All of them
[D]None of them

None of them is incorrect.

10.Which among the following Public Sector Undertakings(PSUs) is the ‘fifth’ company which has been accorded the ‘Maharatna’ status?
[A]Coal India Limite(CIL)
[B]Gas Authority of India Limited (GAIL)
[C]Power Grid Corporation of India Limited
[D]Bharat Heavy Electricals Limited (BHEL)

Coal India Limite(CIL)
The five state-owned units which have been accorded the ‘Maharatna’ status are ONGC, NTPC, IOC, SAIL and CIL.

11.Which of the following Statements is not correct regarding the ‘Banking Sector’ of India?
[A]At present there are 26 Nationalized Banks in India.
[B]Foreign Banks and Regional Rural Banks do not come under the category of Scheduled Commercial Banks.
[C]Banks have the freedom to regulate their own Savings Bank Deposit interest rates.
[D]Narsimham Committee is related to Banking Sector reforms.

Option [B]
Foreign Banks and Regional Rural Banks also come under the category of Scheduled Commercial Banks.
Now, the banks are free to determine their savings bank deposit interest rate, subject to the following two conditions:
1.Each bank will have to offer a uniform interest rate on savings bank deposits up to Rs 1 lakh,irrespective of the amount in the account within this limit.
2.For savings bank deposits over Rs 1 lakh, a bank may provide differential rates of interest, if it so chooses. However, there should not be any discrimination from customer to customer on interest rates for similar amount of deposit.

12.Which among the following are the ‘Credit-Rating Agencies’ of India?
1.CRISIL
2.CARE
3.ICRA
4.ONICRA
[A]1 and 3
[B]1, 2 and 3
[C]1, 3 and 4
[D]All of them

All of them

13.Consider the following Statements regarding ‘Take-Out Financing’:
1.It is for infrastructure projects which have long gestation period.
2.It helps to prevent any possible asset-liability mismatch.
Which of the above Statement(s) is/are correct?
[A]Only 1
[B]Only 2
[C]Both 1 and 2
[D]Neither 1 nor 2

Option [C]
Take-out financing is a method of providing finance for longer duration projects of about 15 years by banks sanctioning medium-term loans for 5-7 years.It is given that the loan will be taken out of books of the financing bank within pre-fixed period by another institution, thus preventing any possible asset-liability mismatch. After taking out the loan from banks, the institution could off-load them to another bank or keep it.

14.Which among the following are the wholly/partly owned subsidiaries of the Reserve Bank of India(RBI)?
1.Deposit Insurance and Credit Guarantee Corporation (DICGC)
2.National Housing Bank (NHB)
3.National Bank for Agriculture and Rural Development (NABARD)
4.Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)
[A]1 and 4
[B]1, 2 and 4
[C]2, 3 and 4
[D]All of them

All of them

15.The concept of ‘Universal Banking’ was implemented in India on the recommendations of:
[A]Abid Hussain Committee
[B]R H Khan Committee
[C]S Padmanabhan Committee
[D]Y H Malegam Committee

R H Khan Committee