Indian Economy GK Questions with Answers – Page 50

The word joins stagnation and inflation, and it describes the awkward situation in which prices are rising fast while output is flat and unemployment is high.

It is described in the classic phrase as too much money chasing too few goods.

The wholesale price index is compiled and released every month by the Office of the Economic Adviser in the Department for Promotion of Industry and Internal Trade, under the Ministry of Commerce and Industry.

When the flexible inflation targeting framework was adopted after the amendment of the Reserve Bank of India Act in 2016, the combined rural and urban consumer price index released by the National Statistical Office was made the nominal anchor, as the Urjit Patel Committee had recommended.

This law makes the right to work a legal guarantee: every rural household whose adult members are willing to do unskilled manual work is entitled to at least 100 days of wage employment in a financial year.

Competition policy in India rests on the Competition Act of 2002, which was passed on the advice of the Raghavan Committee after liberalisation, and it replaced the older monopolies law.

In zero based budgeting every item of expenditure starts from a zero base and has to be justified afresh for the coming period, instead of being carried over because it existed last year.

The New Industrial Policy of 24 July 1991 abolished industrial licensing for all but a short list of industries, so a firm no longer needed a government permit to start production, to expand or to import.

Make in India was launched on 25 September 2014 at Vigyan Bhawan in New Delhi, on the birth anniversary of Deendayal Upadhyaya.

Article 280 requires the President to constitute a Finance Commission every fifth year, or earlier if needed, with a chairman and four other members.

When the rate of interest is already very low, people believe it can hardly fall further and must rise, so they hold cash instead of bonds.

Consumer theory studies how a household decides to spend its money among the goods and services available to it. The idea rests on three things: the wants of the consumer, the prices of goods, and the income in hand, which is the budget constraint.

The Reserve Bank Of India Act, as amended in 2016, states that the primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.

India took the idea of five-year plans from the erstwhile Soviet Union, which began its first plan in 1928 under Stalin.

Gross domestic product, or GDP, is the money value of all final goods and services produced inside the borders of a country in one year.

A higher repo rate raises the cost at which banks borrow from the Reserve Bank, so they raise their own lending rates.

Under the minimum reserve system adopted in 1957 the Bank keeps assets of at least two hundred crore rupees against the notes it issues, of which gold must be worth at least one hundred and fifteen crore rupees and the rest is held in foreign securities.

The one rupee note is not a Reserve Bank note at all: it is issued by the Government of India through the Ministry of Finance, is a legal tender note of the government and carries the signature of the Finance Secretary.

A margin requirement is the part of the value of a security that the borrower must fund from his own resources; by raising it for loans against a particular commodity the Bank can discourage credit flowing into speculation in that commodity without touching the total supply of credit.

It requires every scheduled bank to keep with the Reserve Bank a cash balance calculated on its net demand and time liabilities, and this proportion is the cash reserve ratio.