Indian Economy MCQs

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Ad valorem tariff is calculated on the basis of the value of the imported good, expressed as a percentage of such value. For example, an ad valorem tariff of 10% on an imported car worth US 10000 would lead to a requirement to pay US 1000 as customs duty.

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when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency, The term is not only applied to usage of the United States dollar, but generally to the use of any foreign currency as the national currency.

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Disinflation refers to a reduction in the rate of inflation. In other words, prices may still rise, but they rise more slowly than before. This makes disinflation an anti-inflationary measure because it eases the pace of price increase without necessarily causing a fall in the overall price level. It is different from deflation, which means a persistent decline in the general price level.

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A regressive tax is the one in which tax rate decreases as the amount subject to taxation increases; and the tax rate progresses from high to low. The lowest amount is subject to higher taxation and this leads to individuals with low income bear the highest burden of regressive taxes. Such tax does not take into account the ability to pay.

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The Airports Economic Regulatory Authority (AERA) is the statutory body that regulates tariff and other charges for aeronautical services at major airports, including matters related to development fee. Its role is to determine or revise such fees for airports covered under its jurisdiction. The Airports Authority of India manages airports, but the fee-setting function for major airports is entrusted to AERA under the relevant regulatory framework.

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The International Monetary Fund was created in 1944 at the Bretton Woods Conference. Its main function is to provide temporary financial assistance to member countries facing balance of payments deficits. The IMF uses facilities like Stand-By Arrangements and Extended Fund Facility. Membership includes 190 countries as of 2023. The IMF also conducts economic surveillance and policy advice, but direct financial support for balance of payments stability is its core function.

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The Laffer curve is a theoretical concept in economics that illustrates the relationship between tax rates and government revenue. The curve is named after economist Arthur Laffer, who popularized the concept in the 1970s. The basic idea behind the Laffer curve is that there is a certain tax rate that will maximize government revenue. At a 0% tax rate, the government will obviously not collect any revenue. At a 100% tax rate, the government will also not collect any revenue because people will have no incentive to work. The Laffer curve suggests that there is a point in between these two extremes where the government will collect the most revenue. The exact shape and location of the Laffer curve will vary depending on various factors, such as the state of the economy and the efficiency of the government’s tax collection system.

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Stamp duty on promissory notes is a Union levy under the Indian Stamp Act, but the revenue is assigned to the States. In constitutional terms, the Union imposes the duty, while the States collect and retain the proceeds under Article 268. This makes the proceeds a State revenue item, even though the taxing power for these instruments is not exercised by the States themselves.

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Chatham Saw Mill, Wandoor Beach, Mount Manipur and the Limestone Caves are all well-known attractions in the Andaman and Nicobar Islands. Chatham Saw Mill is located near Port Blair, Wandoor Beach is a popular coastal spot on South Andaman, Mount Manipur is the renamed Mount Harriet peak, and the limestone caves are famous in Baratang. Together, these sites point to the Andaman and Nicobar Islands, a Union Territory in the Bay of Bengal.

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Economic development is usually associated with structural transformation: the share of agriculture/primary sector declines, while industry and services expand. It is also reflected in better institutions, infrastructure, higher productivity and rising per capita income. A larger GDP share from the primary sector generally indicates a less developed economic structure.