Question : Assertion: The service sector contributes the highest share of India's GDP.
Reason: India has witnessed significant growth in sectors such as IT, telecommunications, banking, tourism, and healthcare.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.
The assertion is true. The service sector has been a significant driver of India's economic growth and contributes a substantial portion of the country's GDP.
The reason provided, stating that India has witnessed significant growth in sectors such as IT, telecommunications, banking, tourism, and healthcare, is also true. These sectors are part of the service sector and have experienced notable growth in India. The expansion of these industries has contributed to the increased share of the service sector in India's GDP.
Therefore, both the assertion and the reason are true, and the reason correctly explains the assertion.
Question : Which among the following comes under the primary sector of the Indian Economy?
Option 1: Sugar Industry
Option 2: Dairy Industry
Option 3: Banking Industry
Option 4: Transport of Goods
Correct Answer: Dairy Industry
Solution : The correct answer is Dairy.
The primary sector refers to all areas of human endeavour that use natural resources to produce essential goods, including agriculture, horticulture, dairy production, mining, fisheries, forestry, etc. By converting raw materials into valuable products, the secondary sector increases the value of natural resources.
Question : Which program was launched in 2015 to promote financial inclusion and provide banking services to all households in India?
Option 1: Swachh Bharat Abhiyan
Option 2: Make in India
Option 3: Digital India
Option 4: Pradhan Mantri Jan Dhan Yojana
Correct Answer: Pradhan Mantri Jan Dhan Yojana
Solution : The correct answer is (d) Pradhan Mantri Jan Dhan Yojana." The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a flagship financial inclusion program launched by the Government of India. Its objective is to ensure that every household in India has access to basic banking services such as a bank account, a debit card, and access to credit and insurance facilities. The program aims to bring the unbanked population into the formal banking system, promote savings, enable direct benefit transfers, and foster financial literacy. PMJDY has been instrumental in expanding financial inclusion in India by opening millions of bank accounts for previously unbanked individuals and households.
Question : Which of the following is not a function of the RBI?
Option 1: Regulating the banking system
Option 2: Conducting monetary policy
Option 3: Issuing currency notes
Option 4: Regulating the stock market
Correct Answer: Regulating the stock market
Solution : The correct answer is (d) Regulating the stock market.
Regulating the stock market is not a function of the Reserve Bank of India (RBI). The RBI primarily focuses on the regulation and supervision of the banking system in India, ensuring its stability, integrity, and smooth functioning. Its functions include regulating banks and financial institutions, formulating and implementing monetary policy, issuing and managing currency notes, and maintaining the stability of the financial system.
The regulation of the stock market, including the oversight of stock exchanges and market participants, falls under the jurisdiction of the Securities and Exchange Board of India (SEBI). SEBI is the regulatory authority responsible for the development, regulation, and oversight of the securities market in India.
Question : Case Study 34
ABC Ltd. is a conglomerate planning to expand its operations. The company's management is considering the roles of SEBI in the financial market.
Question :
What is the full form of SEBI?
Option 1: Securities and Exchange Board of India
Option 2: Stock Exchange and Banking Institution
Option 3: Securities and Equity Brokerage Institute
Option 4: Stock Exchange and Business Investment
Correct Answer: Securities and Exchange Board of India
Solution : The correct answer is (a) Securities and Exchange Board of India
The full form of SEBI is Securities and Exchange Board of India. SEBI is the regulatory body in India that oversees and regulates the securities market, protecting the interests of investors and promoting the development and regulation of the securities market.
Question : Choose which of the following statements is not correct.
Option 1: Debentures Redemption Investment is made by all companies redeeming the debentures.
Option 2: All India Financial Institutions (AIFIs), Banking Companies and Other Financial Institutions are not required to set aside amount to Debentures Redemption Reserve.
Option 3: Unlisted NBFCs and HFCs are not required to invest 15% of Outstanding Debentures in Specified Securities.
Option 4: Debentures Redemption Reserve can be used only for redemption of debentures.
Correct Answer: Debentures Redemption Investment is made by all companies redeeming the debentures.
Solution : Answer = Debentures Redemption Investment is made by all companies redeeming the debentures.
All India Financial Institutions (AIFIs), Banking Companies and Other Financial Institutions are not required to set aside amounts to Debentures Redemption Reserve.
Unlisted NBFCs and HFCs are not required to invest 15% of Outstanding Debentures in Specified Securities. Debentures Redemption Reserve can be used only for redemption of debentures are true statements, but Debentures Redemption Investment is made by all companies redeeming the debentures.
Hence, the correct option is 1.
Question : Case Study 34
ABC Ltd. is a conglomerate planning to expand its operations. The company's management is considering the roles of SEBI in the financial market.
Question :
What is the full form of SEBI?
Option 1: Securities and Exchange Board of India
Option 2: Stock Exchange and Banking Institution
Option 3: Securities and Equity Brokerage Institute
Option 4: Stock Exchange and Business Investment
Correct Answer: Securities and Exchange Board of India
Solution : The correct answer is (a) Securities and Exchange Board of India
The full form of SEBI is Securities and Exchange Board of India. SEBI is the regulatory body in India that oversees and regulates the securities market, protecting the interests of investors and promoting the development and regulation of the securities market.
Question : Which of the following is not a function of a stock exchange?
Option 1: Facilitating trading of securities
Option 2: Ensuring fair and transparent transactions
Option 3: Regulating the banking sector
Option 4: Providing liquidity to investors
Correct Answer: Regulating the banking sector
Solution : The correct answer is (c) Regulating the banking sector.
Regulating the banking sector is not a function of a stock exchange. Stock exchanges primarily serve as marketplaces where securities such as stocks, bonds, and derivatives are bought and sold. They facilitate the trading of securities between buyers and sellers.
However, regulating the banking sector is typically the responsibility of regulatory bodies such as central banks and financial regulatory authorities. These entities oversee and regulate banks, ensuring their compliance with banking laws, capital requirements, and prudential regulations.
Question : Assertion: A large segment of workforce continues to depend on primary activities to make a living.
Reason: In India, trade, commerce, banking, tourism and related services are developing faster than production activities.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Solution : The correct answer is (b) Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
The assertion that a large segment of the workforce continues to depend on primary activities to make a living is true, as many individuals in India are employed in agriculture, fishing, mining, and other primary sectors.
However, the reason provided, stating that trade, commerce, banking, tourism, and related services are developing faster than production activities, does not necessarily explain why a large segment of the workforce depends on primary activities. The reason does highlight the growth of these sectors in India, but it does not directly correlate with the dependence on primary activities for livelihood.
In summary, both the assertion and reason are true, but the reason does not provide the correct explanation for the assertion.
Question : Which of the following is not a function of the Reserve Bank of India (RBI)?
Option 1: Issuing currency notes
Option 2: Regulating the banking system
Option 3: Regulating the securities market
Option 4: Managing the foreign exchange reserves of India
Correct Answer: Regulating the securities market
Solution : The correct answer is (c). Regulating the securities market
The Reserve Bank of India (RBI) performs multiple functions, but regulating the securities market is not one of them. The correct answer is c) Regulating the securities market.
The functions of the Reserve Bank of India include:
a) Issuing currency notes: The RBI is responsible for the issuance and management of currency notes and coins in India.
b) Regulating the banking system: The RBI regulates and supervises banks and financial institutions in India to ensure their stability, soundness, and proper functioning.
d) Managing the foreign exchange reserves of India: The RBI manages and maintains the foreign exchange reserves of India, which are crucial for the stability of the country's external sector.
While the securities market in India is regulated by the Securities and Exchange Board of India (SEBI), the RBI collaborates with SEBI and plays a supportive role in ensuring the smooth functioning and stability of the overall financial system.