Indian Economy MCQs

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When the percentage change in quantity demanded is less than the percentage change in price, the demand for the good is said to be inelastic.

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According to Keynes’ psychological law of consumption, an increase in total consumption causes an increase in total income – an increase in total income leads to an increase in total consumption but an increase in consumption is less than an increase in income.

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A payment that a government makes to a producer to supplement the market price of a commodity is known as subsidy. It is basically costs incurred by the government through budgetary resources for the provision of goods which are not classified as “public goods”

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A command economy is an economic system in which the government decides what goods and services will be produced, how they will be produced, available to whom the goods and services will be produced, and who owns and controls the major factors or production. does.

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Antyodaya Anna Yojana (AAY) is a centrally sponsored scheme launched on December 25, 2000 for one crore poor families with the aim of ensuring food security in India. This is an important milestone in providing food grains to the poor. It considered providing 35kg. of food grains per month at highly subsidized rates of Rs. 2 per kg. for wheat and Rs. 3 per kg. For rice to each Antyodaya family.

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The money market is where financial instruments with high liquidity and very short maturities are traded. It is used by participants as a means of borrowing and lending in the short term, with maturities typically ranging from overnight to just one year. Some common money market instruments are commercial paper, municipal notes, interest rate swaps, etc.

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The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. Generally, fiscal deficit takes place either due to a revenue deficit or a major hike in capital expenditure. It does not have a direct impact on prices.

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Favorable balance of trade is an imbalance in a country’s balance of trade in which payments for exports of goods received by the country exceed payments for merchandise imports paid by the country. It is considered favorable because more goods are exported out of the country than imported, meaning that foreign production is replaced by domestic production, leading to increased domestic employment and income.

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Globalization means integrating the economy of a country with the economies of other countries or the world economy under conditions of free flow of trade, capital and movement of persons across borders. In the Indian context, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies and having minimum intervention in economic relations with other countries.

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Dadabhai Naoroji prepared the first estimate of national income in 1876. He estimated national income by first estimating the value of agricultural output and then adding a certain percentage of non-agricultural production. In 1931, Dr V.K.R.V. was the first person to adopt the scientific process in the estimation of national income.