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Quiz 75 : Indian Economy Questions for All Examinations

1. In which among the following years, a new “Liberalized Industrial Policy” in India was announced for the first time?
[A] 1986
[B] 1991
[C] 1992
[D] 1993

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Correct Answer: B [1991]
2. In which among the following years, the MRTP act became effective?
[A] 1970
[B] 1972
[C] 1975
[D] 1978

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Correct Answer: A [1970]
Notes:
On the basis of recommendation of Dutt Committee, MRTP Act was enacted in 1969 to ensure that concentration of economic power in hands of few rich. The act was there to prohibit monopolistic and restrictive trade practices.
The Monopolies and Restrictive Trade Practices Act (MRTP Act) was passed by Parliament of India on 18 December 1969 and got president’s assent on December 27, 1969. But it came into force from June 1, 1970.
3. In the Industrial Policy of 1991, how many industries were reserved only for Public Sector?
[A] 7
[B] 8
[C] 11
[D] 13

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Correct Answer: B [8]
Notes:
On July 24, 1991, Government of India announced its new industrial policy with an aim to correct the distortion and weakness of the Industrial Structure of the country that had developed in 4 decades; raise industrial efficiency to the international level; and accelerate industrial growth.
The number of industries reserved for public sector was reduced from 17 (as per 1956 policy) to only 8 industries viz. Arms and Ammunition, Atomic Energy, Coal, Mineral Oil,  Mining of Iron Ore, Manganese Ore, Gold, Silver, Mining of Copper, Lead, Zinc, Atomic Minerals and Railways
Currently only two categories from the above viz. atomic energy and Railways are reserved for public sector.
 
4. In an oligopolistic or monopolistically competitive market, firms do not raise their prices because even a small price increase will lose many customers. Which among the following is the most suitable terms used for this concept ?
[A] Supracompetitive pricing
[B] Swing Demand
[C] Kinked Demand
[D] Imperfect competition

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Correct Answer: C [Kinked Demand]
5. Which among the following was NOT a reason behind India’s poverty as pointed out by Dadabhai Naoroji in his famous work “Poverty and Un-British Rule in India” ?
[A] Expenditure of the European Officials in England
[B] Money sent by the British professionals to England
[C] India’s Population growth
[D] Bringing of British Capital in India

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Correct Answer: C [India’s Population growth]
Notes:
In his work, Dadabhai did not accept that the Indian poverty was due to over population or the interplay of some economic laws as publicized by the British.
6. Which among the following was the first deepwater block in India to start production?
[A] Krishna Godavari D-6
[B] Mahanadi deepwater block NEC-DWN-2002/1
[C] SB-11
[D] KG-DWN- 2005/2

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Correct Answer: A [Krishna Godavari D-6]
Notes:
In April 2009, Reliance Industries Ltd (RIL) had started pumping natural gas from its D-6 block in the Krishna-Godavari (K-G) basin and D-6 was the first deepwater block in India to start production. 
7. Which among the following represents a decrease in the Owner’s equity?
[A] Issue of Bonus Shares
[B] Redemption of the Debentures
[C] Redemption of the Preference Shares
[D] Purchase of the Building

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Correct Answer: B [Redemption of the Debentures]
Notes:
A debenture is one of the capital market instruments which is used to raise medium or long term funds from public. A debenture is essentially a debt instrument that acknowledges a loan to the company and is executed under the common seal of the company. The debenture document, called Debenture deed contains provisions as to payment, of interest and the repayment of principal amount and giving a charge on the assets of a such a company, which may give security for the payment over the some or all the assets of the company. Issue of Debentures is one of the most common methods of raising the funds available to the company. It is an important source of finance.
Debentures may be redeemed (repaid) a) at a par b) at a premium or c) at a discount.
  • Redeemable at par:When debentures are to be redeemed at their face value they are said to be redeemable at par.
  • Redeemable at a premium:When debentures are to be redeemed at an amount higher than their face value they said to be redeemable at a premium. Premium payable on redemption of debentures is a capital loss for the company. Such premium even though payable on redemption must be provided as a liability at a time of issue of debentures.

Redeemable at a discount: When debentures are to be redeemed at an amount lower than their face value, they are said to be redeemable at a discount such discount is a capital profit for the company

8. Which among the following will be a debit entry in India’s balance of payments?
[A] Imports of goods by India
[B] Income of Indian investments abroad
[C] Receipts of transfer payments
[D] Exports of services by India

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Correct Answer: B [Income of Indian investments abroad]
9. Yashaswini rural healthcare scheme is being implemented in which among the following states of India?
[A] Andhra Pradesh
[B] Karnataka
[C] Tamil nadu
[D] kerala

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Correct Answer: B [Karnataka]
10. Which among the following states of India is running the Dhanwantari Yojana in the healthcare sector?
[A] Punjab
[B] Haryana
[C] Madhya Pradesh
[D] Rajasthan

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Correct Answer: C [Madhya Pradesh]