Indian Economy Quiz 3

The Reserve Bank of India (RBI) was nationalised with effect from 1 January 1949 on the basis of the RBI Act 1948.

The economy is in equilibrium only when saving is equal to investment. If saving and investment are equal at a time, they will be soon brought into equilibrium by automatic changes in the rate of interest. Given the rate of investment, if saving increases, then the rate of interest will fall. With the decline in the rate of interest, investment demand will rise.

Tea and coffee are examples of Substitute goods. Substitutes present the consumer with alternative choices. If the price of one good falls, then demand for the substitute is likely to decrease.

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.

Infrastructure investments are a form of real assets, which contain physical assets we see in everyday life like bridges, roads, highways, railways, sewage systems, telecommunication or energy.

Economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced. A decrease in cost per unit of output enables an increase in scale.

From 1951 to 2017, the Indian economy was premised on the concept of planning. This was carried through the Five-Year Plans, developed, executed, and monitored by the Planning Commission. The Fourth Five-Year Plan (1969–1974) set before itself the two principal objectives – growth with stability and progress towards self-reliance.

Goods and Services Tax (GST) is an indirect tax used in India on the supply of goods and services. It is a comprehensive, multistage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxes except a few state taxes.

The United Kingdom, under Margaret Thatcher started privisation of state-owned enterprises as a major state policy. The Ridley report devised for the Thatcher shadow cabinet, recommended a policy of breaking up the public sector and dismembering unions.

Green Banking is any form of banking from which the country gets environmental benefits. A conventional bank becomes a green bank by directing its core operations towards the betterment of the environment.