Indian Economy MCQs

Notes:
The Reserve Bank of India starts selling the Government Securities, on behalf of the Government. Either the commercial banks or retail investors buy the securities, resulting in decrease of cash resources at the disposal of the commercial banks.

Notes:
The main motive of the government behind setting up fair price shops is to provide essential commodities to people living below the poverty line. The government buys commodities from farmers at their desirable prices and sells them through fair price shops at half price. This allows people who are unable to buy things from the market due to high prices to purchase necessary products.
Fair price shops are also known as ration shops. Any family with a ration card can purchase a stipulated amount of food grains, sugar, kerosene, etc..
Dual pricing, also known as dynamic pricing or surge pricing, is a pricing strategy in which a business charges different prices for the same product or service based on factors such as demand, inventory levels, or weather conditions. The purpose of dual pricing is to drive other competitors out of the business in order to dominate a product niche or even an entire industry.

Notes:
A Green Field Investment refers to investing in a new project or facility on undeveloped land, where no previous structures exist. This contrasts with Brown Field Investments, which involve redeveloping or upgrading existing facilities. The correct answer, “Investment made by a company in a new factory complex in a remote land of the country where there were no facilities,” exemplifies this concept, as it involves building from the ground up in an untouched area. Green Field Investments are often associated with higher risks but can lead to important long-term benefits, such as job creation and economic development.

Notes:
The Competition Commission of India (CCI) was set up to replace the anachronistic Monopolies and Restrictive Trade Practices Commission (MRTPC). It was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. It has one chairman and six members. It is the youngest and the only cross-sector regulator in India.

Notes:
In a progressive tax system, higher income earners pay a higher tax rate compared to those who earn less. This is based on the assumption that individuals who earn more have the ability and the capacity to pay more taxes. Most income tax systems in the world are progressive, including the United States, Canada, and the United Kingdom.

Notes:
Collateralized Borrowing and Lending Obligation (CBLO) is a money market instrument introduced by the Reserve Bank of India (RBI) to facilitate borrowing and lending among banks and financial institutions. It allows participants to borrow funds against collateral, typically government securities, for short-term needs. CBLO helps enhance liquidity in the money market and is governed by the Clearing Corporation of India Ltd. (CCIL). It is particularly useful for managing liquidity mismatches and is a key tool in the Indian financial system.

Notes:
Targets for the first three plans were set with respect to National Income. Fourth Plan it was Net Domestic Product. In all Plans thereafter it has been Gross Domestic Product at factor cost.

Notes:
The correct answer is Foreign Portfolio Investment (FPI). FPI is considered the most volatile form of foreign capital because it involves investments in financial assets like stocks and bonds, which can be quickly bought or sold. Unlike Foreign Direct Investment (FDI), which is typically long-term and involves direct ownership in businesses, FPI can fluctuate rapidly based on market conditions and investor sentiment. For instance, during economic uncertainty, FPI can exit markets swiftly, leading to important capital flight. In contrast, FDI and loans from international financial institutions tend to be more stable and long-term commitments.

Notes:
Foreign Direct Investment (FDI) involves long-term investments in physical assets, bringing capital, technology, and management expertise to a country. In contrast, Foreign Institutional Investment (FII) primarily involves short-term capital investments in financial markets, such as stocks and bonds, without direct control over businesses. FDI is typically more stable and less volatile than FII, which can quickly exit markets, impacting local economies. FDI often targets specific sectors for development, while FII can invest across various market segments.

Notes:
Visakhapatnam port is the major seafood exporting port in terms of dollar value (22.59%). Pipavav is the major port in terms of quantity (25.27%).