Tag: economics of development

Questions Related to economics of development

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

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

  1. Reduction in the number of items covered by import licenses

  2. Permission for free trade of all items except a negative list of imports and exports

  3. Increasing of import/ export duty rates

  4. Permission for foreign direct investment

Show answer
Correct Option: C
Explanation:

Increasing of import/ export duty rates does not relate to the External Sector Reforms in 1991. As per New economic policy which was adopted in 1991, the import rates and export duty rates were to be decreased so that there would be fair flow of goods between the domestic country and other countries as a result of which there will be rationalization in the tariff structure,

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

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

  1. Devaluation of the Rupee

  2. Removal of restrictions on Foreign Exchange transactions

  3. Export Support

  4. Restrictions on Foreign Direct Investment

Show answer
Correct Option: D
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.

Which of the following were abolished as part of the External Sector Reforms in 1991?

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

  1. Cash Compensatory Scheme

  2. EXIM Scrip Scheme

  3. Both (a) and (b)

  4. Neither (a) nor (b)

Show answer
Correct Option: C
Explanation:

Cash compensatory scheme was a scheme where foreign cash was allowed to be compensated on various means in the domestic territory and EXIM scrip scheme was the export and import assistance bank set up in India in 1981. These both schemes were abolished as a part of new economic reform globalisation and its fair conduct.

Lowering of Import / Export Duty Rates, as part of the External Sector Reforms in 1991, relates to -

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

  1. Exchange Rate Stabilisation

  2. Rationalisation of Tariff Structure

  3. Quantitative Restrictions

  4. Foreign Direct Investment

Show answer
Correct Option: B
Explanation:

As a part of globalization, the import rates and export duty rates were to be decreased so that there would be fair flow of goods between the domestic country and other countries as a result of which there will be rationalization of tariff structure. 

In India, Support to Exporters is available in the form of:

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

  1. Duty and Tax Concessions

  2. Export Finance

  3. Export Promotion Marketing Assistance

  4. All of the above

Show answer
Correct Option: D
Explanation:

In India, the exporters get a lot of benefit as they complete in the international market with the foreign goods. There is tax concessions on many exported items, exported items get a separate marketing assistance at national level and there is export financial inclusion for many exporting firms who needs them.   

100% FDI allowed in _______________.

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

  1. Drugs & Pharmaceuticals

  2. Courier service

  3. Hotels and Tourism

  4. All of the above

Show answer
Correct Option: D
Explanation:
100% foreign direct investment is allowed in:
a) Drugs and Pharmaceuticals
b) Courier service
c) Hotels and Tourism
FDI stands for Foreign Direct Investment. FDI can be defined as a form of investment which controls the ownership of a business in one country by an entity based in another foreign country.

Which of the following is an important ingredient of Selling Economies?

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

  1. Advertising Economies

  2. Inventory Economies

  3. Transportation Economies

  4. Storage Economies

Show answer
Correct Option: A
Explanation:

Advertising Economies is an important ingredient of Selling Economies. Advertising helps to increase the sale of a product by encouraging buyers to buy more products or avail more services. 

As a result of Economic Reforms, Re-structuring, Mergers & Acquisitions of Companies, Business Process Re-engineering, processes have been ___________.

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

  1. Simplified

  2. Made more procedural

  3. Subject to Central Government approval in all situations

  4. None of the above

Show answer
Correct Option: A
Explanation:

As a result of Economic Reforms, Re-structuring, Mergers & Acquisitions of Companies, Business Process Re-engineering, processes have been simplified.

Economic reforms  are taken by the Indian government, which emphasized LPG model- liberalization, privatization and globalization.
Positive impact of Economic Reforms on the Indian Economy are :-a)Improvement in work culture

b) Increase in quality and cost consciousness
c)Increase in Value-Added Exports.

The consumer is in equilibrium at a point where the budget line.

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

  1. Is above an indifference curve

  2. Is below an indifference curve

  3. Is tangent to an indifference curve

  4. Cuts an indifference curve

Show answer
Correct Option: C
Explanation:

The consumer is in equilibrium at a point where the budget line is tangent to an indifference curve, because it can not intersect the IC either from above or below.

After the initial stages of increasing returns to scale, the Firm will experience ________________________.

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

  1. Still Increasing Returns to Scale

  2. Constant Returns to Scale

  3. Diminishing Returns to Scale

  4. None of the above

Show answer
Correct Option: B
Explanation:

In economic terms, constant returns to scale is when a firm changes its inputs with the results being exactly the same change in outputs (production). In other words, if a firm increases its inputs they will see a proportional increase in production (or outputs). 

The similar can be true if a firm decreases its inputs and that results in a proportional decrease in outputs. Constant returns to scale take place when increasing the number of inputs leads to an equivalent increase in the output.

 Thus, the correct option is B.