Devaluation of currency leads to
Answer: B
Devaluation leads to an increase in domestic prices.
Imports become dearer in home currency, and since fuel, fertiliser and industrial inputs are imported, costs rise through the economy. Exports also become more attractive, drawing goods away from the home market and pushing prices up further.
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Deficit financing means that the government borrows money from the
Answer: A
Deficit financing means borrowing from the Reserve Bank of India.
The government issues securities that the central bank buys, and the RBI credits the government's account - in effect creating new money. This is why deficit financing is inflationary in a way that borrowing from the public is not.
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Paper currency first started in India in
Answer: A
Paper currency began in India in 1861.
The Paper Currency Act of that year gave the government the sole right to issue notes, ending the private note issue of the presidency banks. The Reserve Bank took over the function in 1935.
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The main and final aim of Land Reform is
Answer: D
The final aim is making the tiller the owner of the soil.
Abolishing intermediaries, fixing ceilings and regulating rent are all steps towards it. 'Land to the tiller' expresses the object: the person who works the land should own it, so that the incentive to improve it and the return from it belong together.
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How many banks were nationalized in 1969?
Answer: B
Fourteen banks were nationalised in 1969.
The government took over the fourteen largest commercial banks, each with deposits above Rs 50 crore, on 19 July 1969, bringing about 85 per cent of banking deposits under state control. The aim was to direct credit to agriculture and small industry.
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Regional rural banks
I. have a limited area of operation
II. have free access to liberal refinance facilities from NABARD
III. are required to lend only to weaker sections
Answer: D
Statements I and II are true.
Regional rural banks work within a notified district or group of districts and draw concessional refinance from NABARD. They were originally confined to lending to weaker sections, but that restriction was lifted in 1996 so that they could lend to any borrower and stay viable.
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Excise duty is imposed on the
Answer: B
Excise duty is imposed on the production of an item.
It attaches at manufacture, whatever happens to the goods afterwards - which distinguishes it from sales tax, levied on sale, and customs duty, levied on import or export. Most union excise was subsumed into GST in 2017.
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Which of the following is not an indirect tax?
Answer: D
Land revenue is not an indirect tax.
It is a direct tax: the burden falls on the landholder assessed and cannot be shifted. Sales tax, entertainment tax and customs duty are all passed on to the buyer in the price, which is what makes a tax indirect.
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Foreign Currency which has tendency of quick migration is called
Answer: A
It is called hot currency.
Hot money moves quickly between countries in search of a higher return or in flight from risk, and its sudden withdrawal can destabilise a currency - as it did in the East Asian crisis of 1997. Soft currency is one not readily accepted in international payments.
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Which of the following is not viewed as a national debt ?
Answer: A
Life insurance policies are not national debt.
They are liabilities of the insurer to the policyholder. Provident fund balances, national savings certificates and long-term government bonds are all sums the government has borrowed and must repay, and so form part of the national debt.
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