Economics · Banking Financial Awareness

Indian Economy and Policy

1,777 Questions

Indian economy and policy questions cover the structural dynamics and regulatory measures shaping the national market. Topics include foreign direct investment, taxation reforms, and government initiatives for growth. This section is highly relevant for competitive exams requiring economic awareness.

Foreign direct investmentGST impactEconomic reformsTrade policyGovernment economic initiatives

Indian Economy and Policy Questions

Multiple choice geography globalization and trade mncs and impact of globalization effects of globalisation in india globalisation and the indian economy

Which of the following is the major item of imports in India?

  1. Iron and steel products

  2. Chemical products

  3. Petroleum

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

India imports 35% of its petroleum requirements from foreign. Petroleum comes from Iran, Kuwait, Iraq and Saudi Arabia. In 2004-05, petroleum worth Rs. 134095 crore were imported.

Multiple choice geography globalization and trade mncs and impact of globalization effects of globalisation in india globalisation and the indian economy

Before independence, India's foreign trade was confined to _____.

  1. Britain

  2. Commonwealth countries

  3. OPEC

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Prior to Independence, India's foreign trade was mainly confined to Britain. But now the table have turned. At present, India has maximum imports from and exports to European Union, Role of Japan, U.S.S.R., USA and Organisation of Petroleum Exporting Countries (OPEC) in  India's foreign trade has increased substantially.

Multiple choice geography globalization and trade mncs and impact of globalization effects of globalisation in india globalisation and the indian economy

The multinational corporations provides lot of benefits as it ___________.

  1. increases the transfer of technology between nations

  2. they always produce the goods

  3. host countries progress is mostly dependent on them

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A multinational company is one which has its main office in the home country and has many branches or subsidiaries in two or more country. Its main advantage is it increases the transfer of technology between the nations.

Multiple choice geography globalization and trade mncs and impact of globalization effects of globalisation in india globalisation and the indian economy

What can be a disadvantage to the home country of the  MNC's investing in other countries?

  1. Transfer of capital from home country to host country.

  2. No employment to the people.

  3. Both a and b

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

MNC refers to those organisations who have their headquarters in the home country and subsidiaries in two or more country. When a MNC invests in other countries it directly increases employment in the countries where investment is done. Hence, it can be a disadvantage to the home country as employment decreases..

Multiple choice geography globalization and trade mncs and impact of globalization effects of globalisation in india globalisation and the indian economy

Multinational corporations, sometimes provide benefits to their home countries, except which one?

  1. Boost the industrial development in home country

  2. Allow for production of cheaper components for their products

  3. Marketing opportunities for the products produced in home country

  4. Shift the home country's technology overseas via licensing
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

MNC is an organisation which has its head office in the home country and subsidiaries in two or more countries. I t provides various benefits to the home countries:

  1. Boost the industrial development in the home country.
  2. Allow for production of cheaper components for their products.
  3. Marketing opportunities for the products produced in the home country.
But it does not shift home country technology overseas via licensing.

Multiple choice geography globalization and trade mncs and impact of globalization effects of globalisation in india globalisation and the indian economy

Choose the correct statement about factors regarding globalization in India :
I. Improvement in transportation technology.
II. Liberalization of foreign trade and foreign investment.
III. Favourable rules of WTO towards India in comparison to developed countries.
Choose the correct options from the codes given below:

  1. Only I and II

  2. Only I and III

  3. Only II and III

  4. Only III
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Option II and III are correct; option C is the correct answer.

Reason:- Improvement in the transport sector facilitates globalization, it is not an outcome of globalization. 

Whereas Liberalization of foreign trade and Favorable rules under the developing countries category helped India to improve trade in the world. 

Multiple choice geography globalization and trade mncs and impact of globalization effects of globalisation in india globalisation and the indian economy

In the last decade, which one among the following sectors has attracted highest foreign direct investment inflows into India?

  1. Chemicals (excluding fertilizers)

  2. Services

  3. Food processing

  4. Telecommunication
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

India is currently the world’s second-largest telecommunications market and has registered strong growth in the past decade and half. The Indian mobile economy is growing rapidly and is expected to contribute substantially to India’s Gross Domestic Product (GDP).

Multiple choice economics the state of the indian economy on the eve of independence diversification into productive activities policy of agriculture, industry and foreign trade under british rule cottage and small scale industries

How can the horticulture industry in India be overhauled to provide supplementary gainful employment to rural people and help them realize higher levels of income?

  1. Investment in infrastructures like cold storage systems.

  2. Developing small-scale processing units.

  3. Create and establish marketing linkages.

  4. All of the above.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Horticulture has emerged as a successful sustainable livelihood option and needs to be encouraged significantly. Enhancing its role requires investment in infrastructures like electricity, coldstorage systems, marketing linkages,small-scale processing units and technology improvement and dissemination.

Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

Select the correct statement/statements using the code given below:
1. Industrial lockouts caused by the striking contractual labour has increased during the last $5$ years, which indicates immediate need of labour reforms in India pending since long.
2. Increasing labour unrest in India is emerging as the main determinant in attracting FDI. 

  1. Only I

  2. Only 2

  3. I and 2

  4. Neither 1 nor 2
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Both the statements are incorrect. The number of strikes and lockouts show a decreasing trend at least in the instances of lockouts, in the country. Labour unrest in India is not seen as a major deterrent in attracting FDI to the country. 

Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

As a result of foreign investment _____________.

  1. India has seen a tremendous rise in new technology

  2. India is the fifth largest foreign exchange reserve holder in the world

  3. rising prices could not be kept under control

  4. all of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
The opening up of the economy has led to rapid increase in foreign direct investment and foreign exchange reserves. At present, India is the sixth largest foreign exchange reserve holder in the world. Rising prices have also been kept under control. and India has seen tremendous rise in new technology.
Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

How did disinvestment cause loss to the government? 

  1. Proceeds from disinvestment were used to offset the shortage of government revenues

  2. Proceeds from disinvestment were not used to development of PSUs and building social infrastructure

  3. Assets of PSUs were undervalued and sold to the private sector

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
The assets of PSUs have been undervalued and sold to the private sector. This means that there has been a substantial loss to the government. Moreover, the proceeds from disinvestment were used to offset the shortage of government revenues rather than using it for the development of PSUs and building social infrastructure in the country.
Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

FDI in E-Commerce activities is allowed upto ______.

  1. 46%

  2. 51%

  3. 100%

  4. 44%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
FDI stands for Foreign Direct Investment. FDI refers to the investment made by an individual or firm from one country into business interests of different country.
FDI in E-Commerce activities is allowed upto 100% in India
Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

FDI is not permitted _______.

  1. atomic energy

  2. rail transport

  3. nidhi companies

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
FDI stands for Foreign Direct Investment. FDI refers to the investment made by an individual or firm into business interests of different country.
FDI is not permitted in sectors like, atomic energy, rail transport and Nidhi companies.
Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

Encouragement of Foreign Direct Investment & removal of Quantitative Restrictions are both parts of ___________________.

  1. Industrial Reforms in India

  2. External Sector Reforms in India

  3. Land Reforms in India

  4. Banking Reforms in India
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

External sector reforms in India were aimed at integrating the Indian economy with the global market. This included liberalizing trade through the removal of quantitative restrictions and encouraging foreign investment.

Multiple choice economics international economics indian economy during reforms liberalization, privatisation and globalisation: an appraisal structural changes in indian economy after liberalization

Inspite of the Economic Reforms already carried out in India, there is a further need for ___________________.

  1. Better industrial deregulation

  2. Improvement in Fiscal Discipline

  3. Increase in growth of Infrastructure

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Economic reforms are continuous processes. In the Indian context, experts generally agree that further improvements are needed across fiscal discipline, infrastructure development, and industrial deregulation to sustain growth.