The largest share of India’s national income originates in the
(1) Primary sector
(2) Secondary sector
(3) Tertiary sector
(4) All of the above
Solution: (3)
National Income is essentially what a country produces in a given year. It takes into account the value of all the goods and services in an economy. The term is interchangeable with Gross Domestic Product (GDP). The service sector of economy is also known as tertiary sector. The services industry accounted for more than 50 % of India’s gross domestic product in 2023 and is by far the largest.
The Reserve Bank of India issues currency notes under
(1) fixed fiduciary system
(2) maximum fiduciary system
(3) minimum reserve system
(4) proportional reserve system
Solution: (3)
Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government. The system as it exists today is known as the minimum reserve system.
The single largest item of expenditure of the Central Government in India in recent years is
(1) Defence
(2) Subsidies
(3) Interest payment
(4) General services
Solution: (3)
Interest payments are the single largest item of expenditure. Interest payments accounts for approximately 20%, the single largest component of the Centre’s total expenditure.
Ways and Means Advances refers to
(1) Industries getting temporary loans from commercial banks
(2) Government getting temporary loans from RBI
(3) Farmers getting loans from NABAED
(4) Government-getting loans from international financial institutions
(4) Government-getting loans from international financial institutions
Solution: (2)
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. This is guided under Section 17(5) of RBI Act, 1934, and are repayable in each case not later than three months from the date of making that advance’.
Which one of the following is not an objective of Fiscal Policy in India?
(1) Full Employment
(2) Price Stability
(3) Equitable Distribution of Wealth and Incomes
(4) Regulation of International Trade
Solution: (4)
Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and changes in the level and composition of taxation and government spending.
The main difference between Gross Domestic Product (GDP) and Gross National Product (GNP is
(1) Transfer payments
(2) Net foreign income from abroad
(3) Capital consumption allowance
(4) Capital gains
Solution: (2)
Gross Domestic Product (GDP) is a measure of the total value of the goods and services produced in a country during one year, excluding income from investment abroad by residents of the country. It is the Gross National Product less net income from property or investment abroad.
Social accounting system in India is classified into
(1) Income, product and expenditure
(2) Enterprise, households and government
(3) Assets, liabilities and debt position
(4) Public sector, Private sector and Joint sector
Solution: (1)
Social accounting is a method by which a firm seeks to place a value on the impact on society of its operations. It is a systematic analysis of the effects of the organisation on its shareholders, with stakeholder input as part of the data that are analysed for the accounting statement. One social accounting system primarily attempts to measure National Income, final product, consumption and accumulation of capital.
The first Five Year Plan of the Government of India was based on
(1) Leontief input-output model
(2) Harrod-Domar model
(3) Mahalanobis two-sector model
(4) Mahalanobis four-sector model
Solution: (2)
The First Five Year Plan (1951-1956) was based on the Harrod-Domar model and primarily concentrated on raising the level of investment in irrigation, power and other infrastructure for accelerating growth. The development strategy was changed radically in 1956 with the initiation of the Nehru-Mahalanobis model of industrial development that emphasized the development of heavy industry under the public sector
Small farmers in the country have been defined as those farmers having land holding of
(1) below one hectare
(2) one to two hectare
(3) two to three hectare
(4) three to four hectare
Solution: (2)
In India, ‘Small Farmer’ means a farmer cultivating (as owner or tenant or share cropper) agricultural land of more than 1 hectare and up to 2 hectares (5 acres). ‘Marginal Farmer’ means a farmer cultivating agricultural land up to 1 hectare (2.5 acres).
Which is NOT a measure undertaken by the Government to check inflation?
(1) Increase in consumption
(2) Increase in production
(3) Reduction in Deficit financing
(4) Taxation measures
Solution: (1)
One of the important fiscal measures undertaken by governments to check inflation is to cut personal consumption expenditure. It is done by raising the rates of personal, corporate and commodity taxes and even levying new taxes. The government can also reduce unnecessary expenditure on non-development activities in order to curb inflation.
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