Indian Economy and Finance Mock Test

Economic activity is an activity of providing, making, buying, or selling of commodities or services by people to satisfy their day-to-day needs of life. A teacher teaching his own daughter at home does not constitute an economic activity.

Developmental expenditure refers to the expenditure on activities that are directly related to the social and economical development of the country. The expenditures incurred on agriculture, health, education, etc are referred to as development expenditures.

Consumer sovereignty is the situation in an economy where the desires and needs of consumers control the output of producers.

In economics, the marginal product of labour is the change in output that results from employing an added unit of labour. It is a feature of the production function, and depends on the amounts of physical capital and labour already in use.

Fiscal policy refers to the use of the government budget to affect the economy. This includes government spending and levied taxes. In deficit financing, a government spends more money than it receives as revenue, the difference being made up by borrowing or minting new funds.

The finance commission recommends the principles governing the grants-in-aid of the revenues of the States out of the Consolidated Fund of India. Finance Commission was established to make recommendations to the president about how the net proceeds of taxes have to be distributed between the Union and the states, as well as how the funds have to be distributed among the states.

A depository is an organization where the securities of an investor are held in electronic form.

A mixed economy is partly run by the government and partly as a free market economy. In a mixed economy, government controls part of the economy with restriction and licensing requirements, which includes involvement in such areas as education, courts, roads, hospital care, and postal delivery. The government's role in a mixed economy can also include financial policies, such as monetary and fiscal policies.

The population growth experienced in India can largely be explained by variations in birth and death rates. Some of the most important causes of population growth in India are: Widening Gap between Birth and Death Rates, Low Age at Marriage, High Illiteracy, Religious Attitude towards Family Planning, etc.

The ratio of a bank's cash holdings to its total deposit liabilities is called the Cash Reserve Ratio (CRR). CRR is the amount of funds that the banks have to keep with the RBI.