OTEE Economics and Finance 2 — Questions and Answers
Question 1: Which Five Year Plan in India was based on the Harrod-Domar model?
- First Five Year Plan (Correct answer)
- Second Five Year Plan
- Third Five Year Plan
- Fourth Five Year Plan
Correct answer: First Five Year Plan
The First Five Year Plan (1951–56) was based on the Harrod-Domar model and focused primarily on agriculture and irrigation.
Question 2: NITI Aayog replaced which body in 2015?
- Finance Commission
- Planning Commission (Correct answer)
- National Development Council
- Economic Advisory Council
Correct answer: Planning Commission
NITI Aayog (National Institution for Transforming India) replaced the Planning Commission on January 1, 2015.
Question 3: The term 'Balance of Payments' refers to:
- Balance in government budget
- Record of all economic transactions between a country and the world (Correct answer)
- Difference between exports and imports of goods only
- Country's foreign exchange reserves
Correct answer: Record of all economic transactions between a country and the world
The Balance of Payments is a comprehensive record of all economic transactions between residents of a country and the rest of the world over a period.
Question 4: What is 'Repo Rate'?
- Rate at which banks lend to each other overnight
- Rate at which RBI lends money to commercial banks (Correct answer)
- Rate at which banks pay interest on deposits
- Minimum reserve banks must maintain with RBI
Correct answer: Rate at which RBI lends money to commercial banks
Repo Rate is the interest rate at which the Reserve Bank of India lends short-term money to commercial banks against government securities.
Question 5: Goods and Services Tax (GST) in India was implemented on:
- April 1, 2016
- January 1, 2017
- July 1, 2017 (Correct answer)
- April 1, 2018
Correct answer: July 1, 2017
GST was implemented in India on July 1, 2017, replacing a complex system of central and state indirect taxes.
Question 6: What does 'FDI' stand for in the context of economics?
- Fixed Deposit Investment
- Foreign Domestic Income
- Foreign Direct Investment (Correct answer)
- Federal Development Index
Correct answer: Foreign Direct Investment
FDI stands for Foreign Direct Investment, which refers to an investment made by a firm or individual in one country into business interests in another country.
OTEE Economics and Finance 2
Which Five Year Plan in India was based on the Harrod-Domar model?