Indian Economy MCQs

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Complementary goods, defined by their negative cross elasticity of demand, are products whose demand is influenced by one another. When the price of a good declines, the demand for its complementary good rises. Printers need ink cartridges, tea is often consumed with sugar, and mobile phones require SIM cards for operation. However, tea and coffee are substitutes, not complements, as they are consumed separately and often in place of one another, hence they are not complementary goods.

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When the economy is working under conditions of less than full employment, the GDP gap is positive and the economy operates at less than potential. At this point, an increase in expenditure would result in an increase in a country’s real GNP.

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Urea is a white crystalline solid containing about 46% nitrogen. Urea is widely used as a fertilizer and animal feed additive in agriculture. No other solid fertilizer has a higher nitrogen content than urea. Ammonium nitrate contains about 34% nitrogen, calcium ammonium nitrate about 26%, and calcium nitrate about 15.5% nitrogen.

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Gross Budgetary Support is the portion of the government budget allocated to central sectors, ministries, departments, and as support to State/UT plans. It forms a part of the total expenditure in India’s Union Budget. GBS funds plan expenditures and is used for the implementation of schemes and programs under different government ministries and departments. It is released annually by the Government of India.

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The Balance of Payments (BOP) crisis struck India in 1991. This triggered an economic crisis due to escalating oil prices, inflation and low foreign exchange reserves, which beleaguered India’s ability of import payments. Repercussions included severe rupee devaluation. The crisis incited economic liberalization, lowering of import tariffs and eased foreign exchange restrictions. With help from International Monetary Fund and other organizations, India managed to stabilize its situation, highlighting the necessity for constant economic overhauls to sustain financial equilibrium.

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Non-Scheduled Commercial Banks are not required to keep their statutory cash reserves with the RBI. Scheduled Banks maintain the Cash Reserve Ratio (CRR) with the RBI. Non-Scheduled Banks may keep their reserves with themselves. The Banking Regulation Act, 1949, distinguishes Scheduled from Non-Scheduled Banks by inclusion in the Second Schedule of the RBI Act, 1934.

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Approval comes from Cabinet Committee on Economic Affairs (CCEA). The FRP is the minimum price that sugarcane farmers are legally guaranteed

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The Directorate General of foreign Trade (DGFT) is the agency of the Ministry of Commerce and Industry of the Government of India, responsible for execution of the import and export Policies of India.

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Implementation of Goods and Services Tax (GST) could help government raise tax revenues and reduce fiscal deficit. Fiscal deficit can be reduced by rationalizing subsidies in different sectors. Reduction in Income Tax will reduce government’s earnings and hence will increase budget deficit.

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The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.