Indian Economy Previous Year Questions (PYQ) with Answers – Page 19

The MSP is announced before sowing so that farmers know the lowest price at which the government will buy their crop.

When demand pushes the economy to produce more than it can at full employment, the extra demand only drives prices up.

A progressive income tax takes a bigger share when incomes rise and a smaller one when they fall, without any new decision by the government.

Sensex, short for ‘Sensitive Index’, tracks 30 large, well-established and actively traded companies listed on the BSE, chosen from different sectors of the economy.

Article 280 of the Constitution requires the President to set up a Finance Commission every five years, or earlier if needed, to recommend how the taxes collected by the Union should be shared with the states and how grants-in-aid should be given.

When people keep more of their money in banks instead of as cash, banks can lend more, so each rupee of reserve money creates more money in the economy.

By the balance between estimated receipts and expenditure, a budget is of only three types. A balanced budget has receipts equal to expenditure.

The Reserve Bank of India started working on 1 April 1935 under the Reserve Bank of India Act, 1934, following the recommendation of the Hilton Young Commission of 1926.

These are the four pillars of human development set out by the economist Mahbub ul Haq, who led the team that prepared the first Human Development Report for the UNDP in 1990, working closely with Amartya Sen.

A line through the origin at 45° to each axis joins all the points where the distance along the horizontal axis equals the distance along the vertical axis.

The Cash Reserve Ratio (CRR) is the part of a bank's net demand and time liabilities (mainly its deposits) that it must keep as cash balances with the Reserve Bank of India.

The repo rate is an interest rate, not the cost of the collateral. Under a repo, short for repurchase agreement, a commercial bank sells government securities to the central bank and agrees to buy them back, usually the next day, at a slightly higher price.

Saubhagya, the Pradhan Mantri Sahaj Bijli Har Ghar Yojana, was launched in 2017 to give an electricity connection to every household in India.

Pradhan Mantri Gram Sadak Yojana, launched on 25 December 2000, is the oldest of the four schemes. PMGSY was started to give all-weather road connectivity to unconnected rural habitations, and it is fully centrally sponsored.

The Act guarantees at least 100 days of unskilled manual work, not skilled labour.

Many sellers of an identical product, none of whom can change the price, is the definition of a perfectly competitive market.

A change in the good's own price moves the buyer along the same demand curve; it does not shift the curve.

Commercial paper and call money are correctly described; the statements on certificates of deposit and zero-coupon bonds are wrong. Commercial paper is an unsecured promissory note issued by companies to raise short-term funds, usually for 7 days to one year.

India sells more goods to the United States than it buys from it, and the USA has been the country with which India runs its largest trade surplus.

Procurement at MSP is limited, and MSP is a floor price that market prices often exceed. The Government announces MSPs for 22 mandated crops on the recommendation of the Commission for Agricultural Costs and Prices (CACP).