Economy – GK Questions

Ans: B

Explanation: Income tax was first introduced in India by Sir James Wilson in 1860, following the mutiny of 1857.
Correct_Option:B

Ans: A

Explanation:In India, inflation is primarily measured by two key indices: the Wholesale Price Index (WPI) and the Consumer Price Index (CPI). While WPI tracks price changes at the wholesale level, CPI measures price changes from the perspective of the end consumer. The question asks about inflation *measured by*, implying the primary and most widely reported measure for general inflation. Historically, WPI was the primary measure, but the Reserve Bank of India (RBI) now uses CPI as its primary policy tool for inflation targeting. However, the question is phrased broadly and could refer to either. Of the options provided, both A and B are indices that measure inflation. Option D, National Income Deflation, is a macroeconomic concept used to adjust nominal national income to real national income, not a direct measure of inflation itself. Option C, CPI for agricultural workers, is a specific segment and not the general measure. Considering the common understanding and historical context within banking exams, both WPI and CPI are relevant. However, the phrasing “inflation measured by” often refers to the most commonly cited and policy-relevant index. The RBI’s current focus on CPI for inflation targeting makes it the more pertinent answer in contemporary contexts. If the question intended to ask for the *primary* measure for monetary policy, CPI would be stronger. If it’s a general question about how inflation is measured, WPI is also a valid answer. Without further clarification on the context of the exam or the specific intent, there can be ambiguity. However, in many banking exams, WPI is presented as a direct measure of inflation.

Let’s re-evaluate based on common exam question framing. When asked about “inflation measured by” in India, WPI is often presented as a distinct measure of inflation at the producer/wholesale level, while CPI focuses on the consumer level. The RBI uses CPI for monetary policy, but WPI is still a reported measure. If the question is asking for *an* index that measures inflation, both A and B are technically correct. However, usually, such questions aim for a more direct and historically significant answer. WPI has been a prominent measure of inflation for a long time.

Given the options, and without further context to pinpoint the RBI’s current policy focus, WPI is a strong contender as a direct measure of inflation. However, CPI is increasingly important. Let’s assume the question is looking for the most commonly recognized broad measure of price changes, which can include WPI.

Upon further reflection and considering how these questions are often structured, WPI is a direct measure of inflation at the wholesale level, whereas CPI is a measure of inflation from the consumer’s perspective. Both are valid measures of inflation. However, if forced to choose a single “inflation measured by” which is a distinct index, WPI is a prominent one. Let’s consider the historical dominance and directness of WPI as a measure of price level changes at an earlier stage of the supply chain.

Correct_Option:A

Ans: A

Explanation:The Second Five Year Plan (1956-1961) in India marked a significant shift towards rapid industrialization, with a strong emphasis on heavy industries and infrastructure development. The Mahalanobis model, which guided this plan, prioritized the expansion of the capital goods sector.
Correct_Option:A

Ans: D

Explanation:National expenditure, also known as aggregate expenditure or aggregate demand, is the total spending on final goods and services in an economy. This is comprised of consumption expenditure by households, investment expenditure by businesses, government expenditure on goods and services, and net exports (exports minus imports). Therefore, consumption expenditure, investment expenditure, and government expenditure are all components of national expenditure.
Correct_Option:D

Ans: C

Explanation:The Mid-Day Meal Scheme was officially launched nationwide on August 15, 1995. While there were earlier pilot programs and pronouncements, this date marks the formal implementation of the scheme across the country.
Correct_Option:C

Ans: D

Explanation:The Indian Council of Agricultural Research (ICAR) is an autonomous organization under the Department of Agricultural Research and Education (DARE) of the Ministry of Agriculture and Farmers Welfare, Government of India. It is the apex body responsible for coordinating research and education in agriculture and allied fields in India. NABARD is primarily a financial institution for rural development. State Trading Corporation deals with trade. Regional Rural Banks are involved in providing credit to rural sectors.
Correct_Option:D

Ans: A

Explanation:The Comptroller General of Accounts (CGA) is the principal accounting authority of the Government of India and is responsible for establishing and maintaining a sound and efficient accounting and financial reporting system. While NITI Ayog is a policy think tank and RBI is the central bank, neither is directly responsible for the day-to-day accounting and financial reporting framework of the government.
Correct_Option:A

Ans: D

Explanation:Redistribution policies aim to reduce economic disparities. Progressive tax policies (higher tax rates for higher earners) increase government revenue that can be used for social programs. Land reforms can redistribute land ownership, benefiting the landless poor. Rural development policies focus on improving the economic conditions in rural areas, often helping marginalized communities. Therefore, all three are redistribution policies.
Correct_Option:D

Ans: A

Explanation:SEBI was established on April 12, 1988, as a non-statutory body. It was granted statutory powers through the SEBI Act, 1992, which came into effect on January 30, 1992. However, the initial establishment date refers to its formation.
Correct_Option:A

Ans: C

Explanation:In finance, “short-term finance” generally refers to funds that are borrowed or invested for a period of up to one year. This is a standard definition used across financial institutions and for regulatory purposes.
Correct_Option:C

Ans: D

Explanation:India signed a Comprehensive Economic Partnership Agreement (CEPA) with Japan, which came into effect on August 1, 2011. This agreement aimed to promote trade and investment between the two countries.
Correct_Option:D

Ans: B

Explanation:Fiscal policy refers to the use of government spending and taxation to influence the economy. In India, the Ministry of Finance is responsible for formulating and implementing the fiscal policy. The Planning Commission (now NITI Aayog) focuses on development planning, the Finance Commission advises on the distribution of financial resources between the Union and the states, and the Reserve Bank of India formulates monetary policy.
Correct_Option:B

Ans: C

Explanation:The National Food for Work Programme (NFWP) was launched by the Ministry of Rural Development, Government of India, on November 14, 2004, in 150 most backward districts of the country. Its primary objective was to provide supplementary wage employment to people in rural areas, particularly those living below the poverty line, and to generate durable community assets.
Correct_Option:C

Ans: D

Explanation:Value added is calculated as the value of the output minus the value of intermediate consumption. In this case, the value of the output is the worth of the utensils (Rs 1000). The intermediate consumption includes the cost of copper (Rs 500), other material purchased (Rs 100), and wages paid (Rs 100). Depreciation is zero. Therefore, Value Added = Output Value – Intermediate Consumption = 1000 – (500 + 100 + 100) = 1000 – 700 = 300.
Correct_Option:D

Ans: B

Explanation:The Money Order system in India was first introduced in 1880 as a means to facilitate the transfer of funds, primarily for government employees.
Correct_Option:B

Ans: A

Explanation: The first paper currency in India was introduced by the Bank of Hindostan in 1770, followed by the General Bank of India in 1787 and the Bengal Bank in 1794. However, the question likely refers to the modern system of paper currency. The Paper Currency Act of 1861 empowered the British Crown to issue paper currency in India.
Correct_Option: A

Ans: C

Explanation:India has the fourth-largest railway network in the world. The top three are the United States, China, and Russia.
Correct_Option:C

Ans: B

Explanation:The Agricultural Refinance and Development Corporation (ARDC) was a statutory body established in 1963. In 1982, ARDC was merged with the National Bank for Agriculture and Rural Development (NABARD), making NABARD its successor.
Correct_Option:B

Ans: C

Explanation:The Black Revolution in India refers to the efforts to achieve self-sufficiency in the production of petroleum crude oil. This aims to reduce India’s dependence on imports and strengthen its energy security.
Correct_Option:C

Ans: B

Explanation:When a country devalues its currency, its exports become cheaper for foreign buyers, and imports become more expensive for domestic consumers. This increase in the cost of imported goods directly leads to higher prices for those goods within the country, pushing up the general price level.
Correct_Option:B