CBSE Class 11 Economics Economic Reforms Since 1991 Assignment Set 02

Objective Type Questions (Remembering & Understanding based Questions)

A. Multiple Choice Questions

Choose the correct option:

Question. Which of the following is an element of financial sector of the economy?
(a) Banking and non-banking financial institutions
(b) Stock exchange market
(c) Foreign exchange market
(d) All of the options
Answer: (d) All of the options

Question. Which of the following is an example of indirect tax?
(a) Income tax
(b) Wealth tax
(c) Goods and services tax
(d) None of the options
Answer: (c) Goods and services tax

Question. Which of the following is the strategy to promote globalisation of the India economy?
(a) Partially convertibility
(b) Reduction in tariffs
(c) Increase in equity limit of foreign investment
(d) All of the options
Answer: (d) All of the options

Question. In the context of Indian experience, controls were imposed by the government with a view to:
(a) checking the growth of private monopolies
(b) minimising the hold of large industrial houses on the financial resources of the country
(c) both (a) and (b)
(d) None of the options
Answer: (c) both (a) and (b)

Question. Liberalisation of the economy under the new economic policy changed the role of RBI in the economy:
(a) from a 'regulator' to 'facilitator' of the financial sector
(b) from a 'controller' to 'manager' of the government debt
(c) both (a) and (b)
(d) None of the options
Answer: (a) from a 'regulator' to 'facilitator' of the financial sector

Question. Industrial sector reforms under the New Economic Policy (NEP) comprised which of the following?
(a) Abolition of industrial licencing
(b) De-reservation of production areas
(c) Contraction of public sector
(d) All of the options
Answer: (d) All of the options

Question. External sector reforms under NEP included:
(a) foreign exchange reforms
(b) foreign trade policy reforms
(c) both (a) and (b)
(d) None of the options
Answer: (c) both (a) and (b)

Question. Which of the following are the components of globalisation under the new economic policy?
(a) Partial convertibility of the Indian rupee
(b) Increase in equity limit of foreign investment
(c) Reduction in tariffs
(d) All of the options
Answer: (d) All of the options

Question. The parameters of economic reforms undertaken in an economy are:
(a) macroeconomic stabilisation
(b) macroeconomic structural adjustments
(c) both (a) and (b)
(d) None of the options
Answer: (c) both (a) and (b)

B. Fill in the Blanks

Choose appropriate word and fill in the blank:

Question. Prior to 1991, government had imposed several types of controls on enterprises in the domestic economy. (public/private)
Answer: private

Question. As a of the financial sector, RBI would fix the interest rate structure for the commercial banks in the country. (regulator/facilitator)
Answer: regulator

Question. Tax reforms are the principle component of reforms. (monetary/fiscal)
Answer: fiscal

Question. taxes are those taxes, the burden of which can be shifted onto others. (Direct/Indirect)
Answer: Indirect

Question. implies a fall in the value of the domestic currency vis-a-vis other currencies. (Revaluation/Devaluation)
Answer: Devaluation

Question. Liberalisation and laissez-faire system are the terms. (same/different)
Answer: different

Question. refer to the nine such profit making companies which are compared with nine courtiers in the court of king Vikramaditya who were men of eminence and rare wisdom. (Navratnas/Maharatnas)
Answer: Navratnas

Question. implies supremacy of 'self-interest' over 'social interest'. (Liberalisation/Privatisation)
Answer: Privatisation

Question. In conformity with economic reforms, foreign trade policy is enforced for duration. (shorter/longer)
Answer: longer

Question. Outsourcing is an off-shoot of (liberalisation/globalisation)
Answer: globalisation

C. True or False

State whether the following statements are True or False:

Question. The programme of economic reforms in India was started on 24th July, 1991.
Answer: True

Question. New economic policy implied replacement of LQP by LPG.
Answer: True

Question. Presently, 'gems and jewellery' is India's notable exporting category of goods.
Answer: True

Question. Licensing (as in case of liquor) is necessary for the regulation of the industry.
Answer: True

Question. Prior to 1991, physical reforms were introduced by the government with a view to increasing non-tax revenue.
Answer: False

Question. Rising share of industrial sector in the GDP is a sign of economic growth based on structural transformation in the economy.
Answer: True

Question. Demonetisation was a major event of the year 2015.
Answer: False

Question. Globalisation focuses more on the free movement of labour than capital in the international market.
Answer: False

Question. Economic growth along with structural transformation is called economic development.
Answer: True

Question. Despite Green revolution, the percentage share of industrial sector to GDP has increased between 1951 and 1991.
Answer: True

D. Matching/Chronological

I. From the set of statements given in Column I and Column II, choose the correct pair of statements:

Answer: (b) Foreign exchange reforms — (ii) Initiated with the devaluation of the Indian rupee against foreign currency

II. Identify the correct sequence of alternatives given in Column II by matching them with respective items in Column I:

Answer: (a)—(iii), (b)—(iv), (c)—(ii), (d)—(i)

E. ‘Very Short Answer’ Objective Type Questions

Question. What is meant by economic reforms?
Answer: Economic reforms refer to a set of economic policies directed to accelerate the GDP growth.

Question. Define liberalisation.
Answer: Liberalisation means freedom from direct or physical controls by the government in the domestic economy.

Question. Define privatisation.
Answer: Privatisation is the process of involving the private sector in the ownership or operation of a state owned enterprises.

Question. What do you mean by globalisation?
Answer: Globalisation is a process of integrating the domestic economy with rest of the world through the market forces.

Question. What do you mean by fiscal reforms?
Answer: Fiscal reforms relate to revenue and expenditure policy of the government. These reforms focus on tax reforms on the revenue side and fiscal discipline (rationalising government expenditure) on the expenditure side.

Question. Define devaluation.
Answer: Devaluation refers to policy action of the government of a country to lower the value of domestic currency in relation to other currencies of the world.

Question. What is disinvestment?
Answer: Disinvestment refers to selling off share capital of PSUs (public sector undertakings) to the private entrepreneurs.

Question. What is outsourcing?
Answer: It refers to a system of hiring business services (like call centres, transcription, clinical advice, teaching/coaching, etc.) from the outside world.