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 civics agriculture sector rural credit role of agriculture sector green revolution animal husbandry and fishery cattle farming

What led to the reduction of India's GDP during the 1950's? 

  1. Lack of growth of industrial and service sector

  2. Lack of growth of agricultural sector

  3. Lack of growth of fishing industry

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

The slow growth of the industrial and service sectors in the 1950s meant that the economy remained largely agrarian and stagnant. Without a robust secondary or tertiary sector, overall GDP growth was limited.

Multiple choice economics economics of development and planning economics of planning objectives of economic planning in india major economic problems

The planning process in the industrial sector in India has assumed a relatively less important position in the nineties as compares to that in the earlier period. Which one of the following is not true in this regard ?

  1. With the advent of liberalisation, industrial investments/ development have largely been placed within the domain of private and multinational sectors.

  2. With markets assuming a central place, the role of central planning in many sectors has been rendered redundant.

  3. The focus of planning has shifted to sectors like human resource development infrastructure, population control and welfare.

  4. The nation's priorities have shifted away from industrial development to rural development.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This has been the basic change in the process of planning during the reform era. Planning has not lost its relevance but it has gone for its definition as such.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalisation means:

  1. Integration among economies

  2. Reduced government controls and restrictions

  3. Policy of planned disinvestment

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

Liberalization means relaxation of various government restrictions in the areas of social and economic policies. Liberalizing trade policy by the government that is removal of tariff, subsidies and other restrictions on the flow of goods and services between countries is also termed as liberalization. 

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

The inability of domestic markets to provide ample business for all is the reason for _________.

  1. liberalization

  2. globalization

  3. change in political policies

  4. increase in export
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The inability of domestic markets to provide ample business for all is the reason for globalization. Globalization is defined as the process of growing interdependence of the economies through increasing volume and variety of cross border transactions in goods and services and of international capital flows, and also throug the more rapid and widespread diffusion of technology.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalization includes ________.

  1. abolishing industrial licensing requirement in most of the industries

  2. freedom in deciding the scale of business activities

  3. freedom in fixing prices of goods and services

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
The relaxation of government restrictions in areas of social of economic policy is known as liberalization. It refers to the process of eliminating unnecessary controls and restrictions on the smooth functioning of business enterprise.Liberalization includes:a) abolishing industrial licensing requirement in most of the industries
b) freedom in deciding the scale of business activities
c) freedom in fixing prices of goods and services
Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalisation has resulted in ____________ of foreign business organization.

  1. easy exit

  2. easy entry

  3. difficult entry

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

Liberalization has resulted in easy entry of foreign business organization. Liberalization refers to the process of eliminating unnecessary controls and restrictions on the smooth functioning of business enterprise.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalization includes _________________________.

  1. Adopting strict industrial licensing requirement in most of the industries

  2. Reducing the fiscal burden of the state by relieving it of the losses of the SOEs and reducing the size of the bureaucracy

  3. Simplified policies to attract foreign capital and technology to India

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

Liberalization includes simplified policies to attract foreign capital and technology to India. Liberalization refers to end of licence, quota and many more restrictions and control that were put on many industries. Liberalization helped to achieve international competitiveness by attracting foreign capital and technology to India. 

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalization has helped us in achieving_____________.

  1. High foreign exchange reserve

  2. Low inflation rate

  3. Strong rupee

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

Liberalization refers to end of licence, quota and many more restrictions and control that were put on many industries. The term basically refers to opening of the economy to the world and providing freedom to the departmental and public sector undertakings to access capital market in order to achieve international competitiveness. 

 Liberalization has helped us high foreign exchange reserves, low inflation rate in the economy through high investment and strong rupee by making other currencies relatively cheaper. 

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalization has helped us in achieving ___________.

  1. A high growth rate

  2. Easy availability of goods at competitive rates

  3. A healthy and flourishing stock market

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

Liberalization has helped us in achieving :-a) A high growth rate

b) Easy availability of goods at competitive rates

c) Easy availability of goods at competitive rates

Liberalization refers to end of license, quota and many more restrictions and control that were put on many industries. Liberalization has so far helped us in achieving high growth rate, easy availability of goods at a competitive rates and a healthy and flourishing stock market for the economy. 

Multiple choice geography human environment interactions: the tropical and the subtropical region plantation of crops agricultural nature of indian economy the nature of the indian economy part 1

Who is putting pressure on India to allow greater imports of crops produced in their countries?

  1. Developed countries

  2. Developing countries

  3. Underdeveloped countries

  4. Arab countries
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Developed countries often pressure developing nations to open their markets for agricultural imports to support their own large-scale, subsidized farming sectors.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

In the pre-reforms period (i.e. before 1991), Import of food grains was permitted ______________.

  1. In order to meet domestic demand in case of shortage of foodgrains

  2. To help Indians consume nutritious food

  3. Whenever there was a favourable Balance of Trade

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

In the pre-reforms period (i.e. before 1991), Import of food grains was permitted in order to meet domestic demand in case  of shortage of foodgrains. Demand for food grains by the nation used to fall short in the pre-reform period, hence to  cope up with the shortage of food grains, import was done from the foreign countries.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

In the pre-reforms period (i.e. before 1991), Export Subsidy Schemes were characterised by:

  1. High transaction costs

  2. Delays

  3. Corruption

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

 India adopted socialist form of economy which involved a lot of government intervention into international trade where government used to offer export subsidies backed with transaction costs, delays and corruption so that only a few government selected companies could complete in the international market. 

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following is a positive impact of Economic Reforms on the Indian Economy?

  1. Focus on Brand Building in an increasingly competitive market place

  2. Shift from labour-intensive to capital-intensive methods of production

  3. Stress on quality and R & D

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Positive impact of Economic Reforms on the Indian Economy are :-a)Focus on Brand Building in an increasingly competitive market place
b)Shift from labour intensive to capital-intensive methods of production
c)Stress on quality and R & D

Economic reforms  are taken by the Indian government, which emphasized LPG model- liberalization, privatization and globalization.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

'Served from India' brand concept has been started for -

  1. Agricultural exports

  2. Exports of services

  3. Export of handlooms and handicrafts

  4. Export of gems and jewellery
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

'Served from India' was a concept which was started in 2015 as a export promotion techniques for the services that were exported to various countries. 

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following does not relate to the External Sector Reforms in 1991?

  1. Devaluation of the Rupee

  2. Removal of restrictions on Foreign Exchange transactions

  3. Export Support

  4. Restrictions on Foreign Direct Investment
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Restrictions on Foreign Direct Investment does not relate to the External Sector Reforms in 1991. After 1991, foreign direct investment was proposed so that India could avail high investments from outside and grow.  New economic reforms was enacted in 1991 which liberalized the FDI.