Indian Economy MCQs

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Muriate of potash is a common name for potassium chloride. It is chemically neutral and does not significantly alter soil pH. Farmers use it mainly as a source of potassium. Urea and ammonia may acidify soil with repeated use, while rock phosphate tends to make soil slightly acidic over time. Muriate of potash is widely produced and used worldwide.

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The Multilateral Agreement on Investment (MAI) was negotiated by OECD countries in the 1990s. MAI was not concluded and is not part of the World Trade Organization framework. WTO core agreements include GATS, TRIPS, and GATT. The Plurilateral Agreement on Government Procurement functions within the WTO through voluntary acceptance by signatory members only. MAI remains outside the WTO system and was never implemented.

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While estimating the national income, the problem of double counting occurs when the value of some goods and services are counted more than once. Cotton output and cotton cloth output both the raw material and the final result are counted.

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Bank Rate Policy, Reserve Ratio Requirements, Liquidity Adjustment Facility, and Open Market Operations are all principal monetary policy instruments used by central banks including RBI. They regulate money supply, liquidity, and interest rates in the economy. Each plays a specific role in achieving monetary stability and economic objectives as part of monetary policy operations.

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The World Bank has issued bonds in global markets since 1947. Bonds are issued in various currencies and formats, including domestic and Eurobonds. Funds raised through these bonds finance development loans and projects in member countries. The World Bank holds triple-A credit ratings by Moody’s and S&P. Over 180 member countries are eligible for World Bank development financing.

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Demand-pull inflation refers to the inflation from rapid growth in aggregate demand and when excess demand causes ‘too much money chasing too few goods.’ This generally happens when an economy is growing at a faster rate.

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The Reserve Bank of India regulates foreign currency accounts and remittances for Indian residents. RBI acts under the Foreign Exchange Management Act, 1999 and the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015. Amendments until 2025 empower RBI to set conditions for outward and inward remittance and opening of overseas bank accounts. RBI issues notifications for compliance with FEMA rules.

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The Financial Stability Board was established in 2009 after the G20 Pittsburgh Summit. It succeeded the Financial Stability Forum. The Board includes all G20 major economies, FSF members, and the European Commission. The Board is hosted by the Bank for International Settlements in Basel, Switzerland. The FSB’s formation and mandate are directly associated with the G-20 group of countries.

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Microeconomic variables are those patterns or elements that can be used to describe the behavior of a person or an individual economic unit, like a business. Eg. Consumer’s Equilibrium.

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Increased sales of government securities withdraw funds from banks, reducing reserves. Regulations mandating positive end-of-day central bank balances restrict available liquidity for lending or investment. Quantitative tightening by central banks reduces overall bank reserves as securities mature and are not reinvested. All these actions decrease liquidity in the banking system by shrinking available reserves.