Free Reforming the Economy 02 Practice Test - 12th Grade - Commerce 

Question 1

India’s balance of payments crisis occurred in the year:

A.

1950

B.

1963

C.

1984

D.

1991

SOLUTION

Solution : D

India faced a BOP crisis which began in 1991.

Question 2

Which of these countries are major oil suppliers to India?

A.

Vietnam

B.

Brazil

C.

Kuwait

D.

Iraq

SOLUTION

Solution : C and D

Kuwait and Iraq are two of India’s biggest sources of crude oil.

Question 3

Stringent measures adopted to cut down spending in order to overcome fiscal burden is called ___

SOLUTION

Solution :

Austerity involves cutting down spending to difficult levels.

Question 4

What is the list of economic reforms prescribed the IMF, World Bank and the US Treasury to help countries come out of an economic crisis?

A.

London Committee Report

B.

Washington Consensus

C.

Tendulkar Report

D.

Paris Summit

SOLUTION

Solution : B

The Washington Consensus entails a set of economic prescriptions for developing countries.

Question 5

The reform of welcoming foreign investment falls under which of the following categories?

A.

Liberalisation

B.

Privatisation

C.

Globalisation

D.

None of the above

SOLUTION

Solution : C

Globalisation involves integration of India and foreign economies.

Question 6

The industry of tobacco and cigarettes is now free of license controls. State true or false. 

A.

True

B.

False

SOLUTION

Solution : A

Tobacco and related products are one industry for which licensing controls have been retained.

Question 7

In 1999, FEMA replaced a previous reform policy. Which one was it?

A.

Foreign investment Management Act

B.

Fixed Exchange Rate Act

C.

Foreign Exchange Regulation Act

D.

Floating Exchange System

SOLUTION

Solution : C

FEMA replaced FERA.

Question 8

The predecessor to WTO was:

A.

GCFT

B.

CFTW

C.

GATT

D.

WTOF

SOLUTION

Solution : C

General Agreement on Trade and Tariff was replaced by the WTO.

Question 9

Which of the following countries implemented the “One Child” policy?

A.

Japan

B.

USA

C.

India

D.

China

SOLUTION

Solution : D

China implemented the one-child policy as part of birth control, to regulate the population growth.

Question 10

Liberalisation entails:

A.

Encouragement to public sector

B.

Reduction in government control over the economy

C.

Nationalisation

D.

None of the above

SOLUTION

Solution : B

It entails regulating the control of the government over the economy’s industries and functioning.

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