The New Economic Policy

Q.

What Is Devaluation?

Q. 'Earlier, India followed a fixed exchange rate.'
In this statement, the 'fixed exchange rate' is related to which of the following?

1. Exchange of goods
2. Currency exchange
3. Exchange of services
4. Exchange of trade information

Q. Prior to the economic reforms of 1991, India followed a fixed exchange rate system.

1. True
2. False

Q. Which currency exchange regime did India adopt after the balance of payment crisis?

1. International exchange rate
2. Fixed exchange rate
3. Flexible exchange rate
4. Floting exchange rate

Q. Which of the following two industries remained under the licence system even after the introduction of the new economic policy of 1991?

1. Cement industries
2. Defence industries
3. Vehicle manufacturing industries
4. Hazardous chemicals industries

Q. Which of the following statements correlate to the economic situation of India prior to the economic reform of 1991?

1. Domination of public sector enterprises
2. Inflow of private investment
3. Existence of fixed exchange rate
4. Trade surplus for a decade

Q. Which of the following statements highlights an example of currency devaluation?

1. $1 is equal to ₹25, which was earlier worth ₹20.
2. $1 is equal to ₹20, which was earlier worth ₹25.
3. $1 dollar is equal to ₹20, which has remained unchanged.
4. $1 dollar has depreciated to ₹10, which was earlier worth ₹15.

Q. Banks receive deposit from their customers. In which of the following forms do the banks keep the deposits?

1. Physical money
2. Securities
3. Loan papers
4. Gold

Q. Which of the following organisations provides financial support to countries in case of emergencies?

1. World Trade Organization
2. International Monetary Fund
3. United Nations
4. International Bank

Q. In case of currency devaluation, what benefit does a foreign company receive?

1. Tax incentives
2. Cheaper investment
3. Relaxation in mandatory norms
4. Elimination of competition

Q. Which of the following entities need to maintain Statutory Liquidity Ratio?

1. Domestic Companies
2. International Monetary Fund
3. Reserve Bank of India
4. Indian Banks