Indian Economy MCQs

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Realized Investment means an Investment resulting in a sale, transfer or restructuring of a good or service. It is considered to be the main determinant of the level of activity in national income.

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Its barrel per day , amount of crude oil (measured in barrels) produced or consumed by an entity in one day. One barrel 42 gallons

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Saraswat Bank is India’s largest multi-state co-operative bank. It’s also the largest urban co-operative bank in Asia. Saraswat Bank operates in six states: Maharashtra, Goa, Gujarat, Delhi, Madhya Pradesh, Karnataka. The bank was established in 1933 and has been growing for over a century.

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The correct answer is “Ability to pay approach.” Progressive taxation is designed so that individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes. This approach is based on the principle that those who have a greater ability to pay should contribute more to fund public services and social programs. Historically, this concept aligns with the ideas of economists like Adam Smith, who advocated for equitable taxation based on individual financial capacity.

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The target annual GDP growth rate in the first five year plan was 2.1%, while the achieved growth rate was 3.6%.

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Deflation benefits salary earners because it increases the purchasing power of money. When prices fall, the real value of wages rises, allowing consumers to buy more with the same income. In contrast, pensioners may suffer if their fixed incomes do not adjust for deflation, equity holders may see asset values decline, and debtors face higher real debt burdens. Historically, deflation has been linked to economic downturns, such as the Great Depression, where falling prices led to reduced consumer spending.

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The Ad Valorem Tax is a tax based on the value of a transaction or property. It is commonly applied to the price of commodities, meaning the tax amount varies with the price. For example, property taxes and sales taxes are often ad valorem, calculated as a percentage of the assessed value or sale price. This method contrasts with specific taxes, which are fixed amounts per unit regardless of value.

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The headquarters of International Rubber Study Group are located in Singapore. It was established in 1944 in London but was relocated in Singapore in 2008.

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When competitors devalue their respective currencies, domestic exporters tend to lose out on the price advantage on their exportable as buyers prefer to buy from a cheaper currency. This in turn hurts income as well as the jobs in the export sector and the prospects for the economy. The central bank at such times tries to intervene – buy dollars and create an artificial demand for the dollar, devaluing the value of the rupee in the process and retain some price advantage for the exporter . But buying dollars involves a fiscal cost as the central bank has to pump in equivalent amount of rupees and again mop it up by selling bonds. These bonds need to be serviced by the government. This would in turn worsen the fiscal position 

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Commercial Paper (CP) is an unsecured money market instrument issued in the form of a Promissory Note. It is typically used by corporations to raise short-term funds, with maturities ranging from a few days to up to 270 days. CP is not backed by collateral and is sold at a discount to face value, making it a popular choice for companies seeking quick liquidity. The first CP was issued in the United States in 1980, and it has since become a key component of the money market.