Exercise : Economy - General Questions
✔ Economy -
General Questions
31.
The New Economic Policy (LPG Reforms) in India was introduced in:
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: India faced a severe Balance of Payments crisis in the early 1990s, with foreign exchange reserves barely enough for two weeks of imports.
Step 2: The government, led by P.V. Narasimha Rao and Finance Minister Manmohan Singh, initiated structural reforms.
Step 3: These reforms, introduced in July 1991, focused on Liberalization, Privatization, and Globalization (LPG) to open up the economy.
Step 2: The government, led by P.V. Narasimha Rao and Finance Minister Manmohan Singh, initiated structural reforms.
Step 3: These reforms, introduced in July 1991, focused on Liberalization, Privatization, and Globalization (LPG) to open up the economy.
32.
"Disinvestment" refers to:
View Answer
Answer: Option A
Explanation:
Explanation:
Step 1: Disinvestment is a component of Privatization strategy.
Step 2: It involves the government selling its equity or shares in Public Sector Undertakings (PSUs) to private investors or the general public.
Step 3: The goal is to reduce the government's fiscal burden, encourage private participation, and improve the efficiency of these enterprises.
Step 2: It involves the government selling its equity or shares in Public Sector Undertakings (PSUs) to private investors or the general public.
Step 3: The goal is to reduce the government's fiscal burden, encourage private participation, and improve the efficiency of these enterprises.
33.
Under Liberalization, "License Raj" was:
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: 'License Raj' referred to the elaborate system of licenses, regulations, and red tape required to set up and run businesses in India before 1991.
Step 2: Liberalization aimed to end this restrictive environment to promote competition and efficiency.
Step 3: As a result, industrial licensing was abolished for almost all industries, except for a few strategic sectors like defense and hazardous chemicals.
Step 2: Liberalization aimed to end this restrictive environment to promote competition and efficiency.
Step 3: As a result, industrial licensing was abolished for almost all industries, except for a few strategic sectors like defense and hazardous chemicals.
34.
Devaluation of currency means:
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: Devaluation is an official reduction in the value of a country's currency relative to a foreign currency or a standard.
Step 2: This is a deliberate act by the government or central bank under a fixed or semi-fixed exchange rate system.
Step 3: In 1991, India devalued the Rupee to make Indian exports cheaper and imports more expensive, thereby helping to correct the trade deficit.
Step 2: This is a deliberate act by the government or central bank under a fixed or semi-fixed exchange rate system.
Step 3: In 1991, India devalued the Rupee to make Indian exports cheaper and imports more expensive, thereby helping to correct the trade deficit.
35.
The "Washington Consensus" is associated with:
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: The Washington Consensus is a set of 10 economic policy prescriptions considered the 'standard' reform package for developing countries.
Step 2: It was promoted by Washington-based institutions like the IMF and World Bank.
Step 3: It emphasizes neoliberal principles such as fiscal discipline, market-led pricing, and trade liberalization (LPG).
Step 2: It was promoted by Washington-based institutions like the IMF and World Bank.
Step 3: It emphasizes neoliberal principles such as fiscal discipline, market-led pricing, and trade liberalization (LPG).
36.
Outsourcing of services to India is a direct result of:
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: Globalization involves the integration of national economies into the global economy through trade and technology.
Step 2: With the opening of the Indian economy and improvements in telecommunications, global companies began 'outsourcing' business processes to India.
Step 3: India's large, English-speaking, and cost-effective workforce made it a global hub for IT and BPO services.
Step 2: With the opening of the Indian economy and improvements in telecommunications, global companies began 'outsourcing' business processes to India.
Step 3: India's large, English-speaking, and cost-effective workforce made it a global hub for IT and BPO services.
37.
Which sector was NOT opened to the private sector initially in 1991?
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: The 1991 reforms drastically reduced the number of industries reserved exclusively for the public sector.
Step 2: However, certain sectors were kept under government control for security, strategic, or social reasons.
Step 3: Initially, Railways and Atomic Energy remained strictly reserved for the public sector.
Step 2: However, certain sectors were kept under government control for security, strategic, or social reasons.
Step 3: Initially, Railways and Atomic Energy remained strictly reserved for the public sector.
38.
The WTO (World Trade Organization) replaced which organization?
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: After WWII, the General Agreement on Tariffs and Trade (GATT) was established to regulate international trade.
Step 2: Following the Uruguay Round of negotiations (1986-1994), it was decided to create a more permanent and powerful body.
Step 3: The WTO officially replaced GATT on January 1, 1995, as the global body overseeing trade rules between nations.
Step 2: Following the Uruguay Round of negotiations (1986-1994), it was decided to create a more permanent and powerful body.
Step 3: The WTO officially replaced GATT on January 1, 1995, as the global body overseeing trade rules between nations.
39.
FDI stands for:
View Answer
Answer: Option A
Explanation:
Explanation:
Step 1: FDI is a key driver of economic growth and globalization.
Step 2: It stands for Foreign Direct Investment.
Step 3: It occurs when an individual or business from one country makes a physical investment (like building a factory or buying a controlling stake) into a business in another country.
Step 2: It stands for Foreign Direct Investment.
Step 3: It occurs when an individual or business from one country makes a physical investment (like building a factory or buying a controlling stake) into a business in another country.
40.
"Current Account Convertibility" of the Indian Rupee was introduced in:
View Answer
Answer: Option B
Explanation:
Explanation:
Step 1: Convertibility refers to the freedom to convert domestic currency into foreign currency and vice-versa.
Step 2: The Current Account deals with trade in goods, services, and transfer payments.
Step 3: Full Current Account convertibility was introduced in India in August 1994, allowing the Rupee to be freely converted for trade-related purposes.
Step 2: The Current Account deals with trade in goods, services, and transfer payments.
Step 3: Full Current Account convertibility was introduced in India in August 1994, allowing the Rupee to be freely converted for trade-related purposes.