Indian Economy Quiz

Mahatma Gandhi developed the idea that “means justify the ends”. For Gandhi, the end is satya or truth which requires no justification and the means- ahimsa or non-violence must be justified not only with reference to the end but also in itself. Every act must be justified with reference to satya and ahimsa.

Natural rubber is cultivated in 16 states in India on a commercial scale. With over 600,000 hectares, Kerala tops rubber cultivation, followed by Tripura with over 85,038 hectares under plantation. Other major natural rubber producers are Karnataka, Tamil Nadu, Assam and other northeastern states.

Bank rate is the rate charged on the loans offered by the Central bank to the commercial banks without any collateral. It is also considered as the rate at which the central bank discounts the bills of the commercial banks. Bank rate is a quantitative credit control measure under the monetary policy of the government as it controls the overall supply of money in the economy.

When the government disinvests its shares to the extent of 4 to 5 percent to meet the deficit in the budget, this is termed deficit privatization or token privatization.

RBI buys and sells government securities or bonds to control the money supply and interest rates. To increase the money supply, the RBI will purchase bonds from banks, which injects money into the banking system. It will sell bonds to reduce the money supply. Statutory Liquidity Ratio (SLR) is a minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold or other securities.

Because higher interest rates mean higher borrowing costs, people will eventually start spending less. The demand for goods and services will then drop, which will cause inflation to fall. Thus, higher borrowing costs will increase production costs and decrease return on capital.

RBI is required to maintain a Gold and Foreign Exchange Reserves of ₹200 Crore of which at least ₹115 Crore should be in Gold. This is called Minimum Reserve System.

Inventory is the accounting of items, component parts and raw materials a company uses in production or sells.

A country has sufficient international liquidity if it can cover any balance of payment deficit with gold and/or convertible currency. A convertible currency is any nation's legal tender that can be easily bought or sold on the foreign exchange market with little to no restrictions.

Gresham's law is a monetary principle stating that “bad money drives out good.” It is primarily used for consideration and application in currency markets. when two coins are equal in face value but unequal in intrinsic value (cost of material), the one having less intrinsic value tends to remain in the market circulation, whereas the other disappears to be hoarded.