Free Bachelor of Commerce: Economics Questions and Answers — Questions and Answers

Question 1: Which of the following aspects of the New Industrial Policy of 1991 wasn't present?

permitted foreign investment
setting up of new public sector enterprises (Correct answer)
removal of mrto limit
abolition of industrial licensing

Correct answer: setting up of new public sector enterprises

India's New Industrial Policy of 1991 marked a significant shift towards economic liberalization, privatization, and globalization. Key aspects included permitting foreign investment, removing the Monopolies and Restrictive Trade Practices (MRTP) limit, and abolishing industrial licensing for most sectors. The policy's intent was to reduce the state's role in the economy, thus actively discouraging, rather than setting up, new public sector enterprises.

Question 2: One of the measures taken to increase the effectiveness of the public sector was

maintaining public sector monopoly
raising fresh equity from the market (Correct answer)
increasing government\s shareholding in public enterprises
increasing operational control on public enterprises by the government

Correct answer: raising fresh equity from the market

During economic reforms, many public sector enterprises (PSEs) were encouraged to raise fresh equity from the market. This measure aimed to reduce the government's financial burden and introduce market discipline. By involving private investors, PSEs were expected to become more efficient, accountable, and gain capital for modernization and expansion.

Question 3: Which of the following was a significant banking industry reform that was implemented in 1991?

rbi determined interest rates
reduce slr
raising slr and cpr
introduction of prudential norms (Correct answer)

Correct answer: introduction of prudential norms

The 1991 economic reforms in India included significant changes in the banking sector, largely based on the Narasimham Committee recommendations. A key reform was the introduction of prudential norms, such as capital adequacy ratios and asset classification. These norms aimed to strengthen the financial health and stability of banks, bringing them in line with international standards.

Question 4: Health insurance is provided by Rashtriya Swasthya Bima Yojana to

the entire population
workers in the organized sector
workers in the unorganized sector (Correct answer)
only women and children

Correct answer: workers in the unorganized sector

The Rashtriya Swasthya Bima Yojana (RSBY) was a government-sponsored health insurance scheme launched in India. Its primary objective was to provide health insurance coverage to families belonging to the Below Poverty Line (BPL) category. Specifically, it targeted workers in the unorganized sector to protect them from catastrophic health expenditures.

Question 5: India's agricultural prices are

uncertain (Correct answer)
same
very remunerative
very certain

Correct answer: uncertain

India's agricultural prices are often characterized by significant uncertainty and volatility. This is due to factors like dependence on monsoon, market imperfections, and fluctuations in demand and supply. Farmers frequently face price crashes during bumper harvests and price spikes during lean seasons, leading to income instability.

Question 6: Agriculture price regulation is necessary to

to increase income inequality
trade policy
provide incentives to farmers (Correct answer)
to encourage farmers to spend more

Correct answer: provide incentives to farmers

Agricultural price regulation, often through mechanisms like Minimum Support Price (MSP), is crucial to provide incentives to farmers. It ensures that farmers receive a remunerative price for their produce, protecting them from market price fluctuations and distress sales. This stability encourages farmers to invest in agriculture and continue production, thereby ensuring food security.

Question 7: Farmers are guaranteed a minimum support price.

low income
floor price (Correct answer)
competitive price
high income

Correct answer: floor price

A Minimum Support Price (MSP) is essentially a floor price set by the government for certain agricultural products. It acts as a safety net, guaranteeing farmers a minimum income for their produce, even if market prices fall below this level. The government procures crops at the MSP, preventing distress sales and providing price stability.

Question 8: Issue The cost is what the government charges for food grains.

in the open market
low price
to the middlemen
to ration shops (Correct answer)

Correct answer: to ration shops

The 'issue price' refers to the price at which the government sells food grains from its buffer stocks to ration shops (Fair Price Shops). These ration shops then distribute the food grains to eligible beneficiaries under various public distribution schemes at subsidized rates. This system ensures food security for vulnerable populations.

Question 9: Fair price businesses safeguard the interests of

poor traders
poor farmers
poor people
poor consumers (Correct answer)

Correct answer: poor consumers

Fair Price Shops (FPS), which are part of the Public Distribution System (PDS), are established to safeguard the interests of poor consumers. They provide essential commodities like food grains, sugar, and kerosene at subsidized prices. This helps to ensure food security and affordability for low-income households, protecting them from market price volatility.

Question 10: Price policy mostly has advantages

large farmers (Correct answer)
marginal farmers
middle man
small farmers

Correct answer: large farmers

While price policies like Minimum Support Price (MSP) aim to benefit all farmers, their advantages often accrue disproportionately to large farmers. Large farmers typically have greater marketable surplus, better access to information, storage facilities, and transportation, enabling them to sell more produce at the MSP. Small and marginal farmers, due to limited surplus and immediate cash needs, often sell to local traders at lower prices.

Question 11: The healthcare sector consists of

health insurance (Correct answer)
hospitals
health realtes
pharmaceutical companies

Correct answer: health insurance

The healthcare sector is a broad industry encompassing various services and products related to health. While hospitals and pharmaceutical companies are direct providers, health insurance is a crucial component that facilitates access to these services. It finances healthcare costs, making treatment affordable and accessible for individuals, thus being an integral part of the sector.

Question 12: The maximum FDI allowed via the automated route for all health-related services is

0.74
0.26
1 (Correct answer)
0.51

Correct answer: 1

In India, Foreign Direct Investment (FDI) up to 100% is permitted under the automatic route for most health-related services, including hospitals, diagnostic centers, and medical device manufacturing. This policy aims to attract foreign capital and expertise to boost the healthcare infrastructure and services in the country. The value '1' typically represents 100% in such contexts.

Question 13: Which of the following statements about the Indian healthcare industry is false?

every citizen has access to high quality services
inadequate infrastructure
high incidence of diseases
inadequate insurance coverage (Correct answer)

Correct answer: inadequate insurance coverage

The statement that 'every citizen has access to high quality services' is false regarding the Indian healthcare industry. Despite advancements, India faces significant challenges in healthcare, including vast disparities in access, quality, and affordability, especially between urban and rural areas. Many citizens, particularly in rural and low-income groups, lack access to adequate and high-quality healthcare facilities.

Question 14: Which of the following has the potential to expand in India's healthcare sector?

growing insurance market (Correct answer)
telemedicine
expanding medical tourism
all the above

Correct answer: growing insurance market

A growing insurance market is a significant driver for expansion in India's healthcare sector. As more people gain health insurance coverage, their ability to afford and access medical services increases, leading to higher demand for hospitals, clinics, and specialized treatments. This expansion in financial access is crucial for the overall growth and development of the healthcare industry.

Question 15: Among the forms of tourism that preserves ecological variety

adventure tourism (Correct answer)
medical tourism
eco tourism
heritage tourism

Correct answer: adventure tourism

Adventure tourism, which often involves activities in natural and wilderness areas, can indirectly contribute to preserving ecological variety. By bringing tourists into close contact with nature, it can foster appreciation for ecosystems and wildlife, potentially leading to support for conservation efforts. Additionally, revenue generated from well-managed adventure tourism can be reinvested into protecting these natural habitats.

Question 16: Which of the following doesn't describe a component of the tourism sector?

has high foreign exchange earning potential
does not harm the natural environment (Correct answer)
it is composite of several service providers
has high employment potential

Correct answer: does not harm the natural environment

The statement 'does not harm the natural environment' is false as a general description of the tourism sector. While sustainable tourism practices aim to minimize environmental impact, tourism, in general, can significantly harm the natural environment through pollution, resource depletion, habitat destruction, and increased waste generation. Therefore, it is not an inherent characteristic that tourism doesn't harm the environment.

Free Bachelor of Commerce: Economics Questions and Answers

Which of the following aspects of the New Industrial Policy of 1991 wasn't present?