Economics – Easy Level – GK Questions

GST is a destination-based consumption tax, meaning the tax revenue accrues to the state where the goods or services are ultimately consumed, rather than the state where they are manufactured. This shift from an origin-based tax system fundamentally altered the fiscal dynamics between manufacturing-heavy states and consumption-heavy states in India.

Disinflation occurs when the inflation rate decreases over time (e.g., dropping from 8% to 4%); prices are still rising, just at a slower pace. Deflation, however, occurs when the general price level actually falls below zero (e.g., -2%), meaning money gains purchasing power, which is often a symptom of a severe economic recession.

Net National Product (NNP) at Factor Cost is universally recognized as 'National Income'. It represents the total net income earned by the residents of a country from the production of goods and services, excluding indirect taxes and including subsidies, and after accounting for the depreciation of capital assets.

The PLI scheme is specifically designed to incentivize incremental sales from goods manufactured in domestic units over a defined base year. This output-oriented approach ensures that government funds reward actual production and market success, encouraging companies to scale up manufacturing and integrate into global value chains.

The Yellow Revolution was initiated in the late 1980s, spearheaded by Sam Pitroda, to achieve self-sufficiency in edible oils. Through the Technology Mission on Oilseeds (TMO), it successfully introduced high-yielding varieties and improved farming practices, significantly boosting the domestic production of oilseeds like mustard, groundnut, and sunflower.

The Blue Revolution (Neel Kranti Mission) was launched to promote the sustainable and intensive development of the fisheries sector. It focuses on enhancing fish production, modernizing aquaculture technologies, and improving the livelihoods of fisherfolk, transforming India into one of the leading fish-producing nations globally.

The KCC scheme was launched in 1998 based on the recommendations of the R.V. Gupta Committee. It revolutionized rural credit by providing flexible, low-cost working capital loans to farmers, reducing their dependence on exploitative informal moneylenders and ensuring timely availability of seeds, fertilizers, and pesticides.

The Narasimham Working Group (1975) recommended the creation of RRBs to bridge the credit gap in rural areas. They operate with a local orientation and lower cost structure, with their equity jointly held by the Government of India (50%), the concerned State Government (15%), and the Sponsor Bank (35%).

Demonetization was announced on November 8, 2016, with the stated objectives of curbing black money, eliminating counterfeit currency, and pushing the economy towards digital payments. It resulted in 86% of the currency in circulation being temporarily withdrawn from the system.

M1 is the most liquid measure of money supply, comprising coins and currency notes held by the public, net demand deposits held by commercial banks, and 'Other Deposits' (like foreign central bank or IMF deposits) held with the RBI. It represents the money immediately available for transactions.

Gresham's Law states that if there are two forms of money in circulation with the same face value but different intrinsic values, people will hoard the 'good' money (higher intrinsic value, like gold) and spend the 'bad' money (lower intrinsic value). Consequently, the bad money dominates the market.

Launched in September 2014, Make in India focuses on 25 key sectors of the economy. It aims to facilitate investment, foster innovation, enhance skill development, and build best-in-class manufacturing infrastructure to increase the manufacturing sector's share in GDP.

The Eight Core Industries (Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity) comprise over 40% of the weight of the items included in the IIP. They are considered leading indicators of overall industrial and economic activity.

Created in 1969 to supplement member countries' official reserves, SDRs are not a currency themselves but a potential claim on the freely usable currencies of IMF members. They were termed 'Paper Gold' because they were initially intended to serve as a substitute for gold in international settlements.

The Office of the Economic Adviser (OEA) compiles the WPI, which tracks price changes in the wholesale market for a basket of 697 items. The base year was updated from 2004-05 to 2011-12 to align it with the base year of the Consumer Price Index (CPI) and GDP series.

NITI Aayog stands for National Institution for Transforming India. It was established in 2015 to replace the Planning Commission, acting as the premier policy think tank of the Government of India and fostering cooperative federalism through a bottom-up approach.

The capital market facilitates the flow of long-term savings into productive investments, comprising both the primary market (new issues) and the secondary market (stock exchanges). It is essential for funding corporate expansion and infrastructure development.

NBFCs primarily engage in lending and investment activities but cannot accept demand deposits from the public. Furthermore, they are not part of the payment and settlement system and cannot issue cheques drawn on themselves, distinguishing them fundamentally from commercial banks.

Although SEBI was initially set up as a non-statutory body in 1988, it lacked enforcement teeth. It was granted statutory status and comprehensive regulatory powers over the securities market via the SEBI Act, which was passed by Parliament in 1992.

The call money market deals in extremely short-term, uncollateralized loans between banks to meet their immediate reserve requirements. Funds borrowed for exactly one day are called 'call money', whereas funds borrowed for 2 to 14 days are termed 'notice money'.