Economy & Tax — Set 1

Correct Answer: C. Gross Domestic Product

GDP stands for Gross Domestic Product which represents the total value of goods and services produced within a country. It is a primary indicator used to gauge the health of a country's economy. High GDP growth generally suggests a productive and expanding economy.

Correct Answer: C. Goods and Services Tax

GST stands for Goods and Services Tax which is an indirect tax used in India on the supply of goods and services. It was implemented to replace multiple cascading taxes levied by the central and state governments. This comprehensive tax came into effect on July 1, 2017.

Correct Answer: A. Foreign Direct Investment

FDI stands for Foreign Direct Investment which occurs when an individual or business from one country invests in business interests in another country. It involves establishing business operations or acquiring business assets in the foreign nation. FDI is crucial for the economic development of developing nations.

Correct Answer: C. Special Economic Zone

SEZ stands for Special Economic Zone which is an area in a country that is subject to different economic regulations than other regions within the same country. These zones are created to attract foreign investment and increase exports. Businesses operating in these zones often enjoy tax incentives and lower tariffs.

Correct Answer: D. Foreign Institutional Investor

FII stands for Foreign Institutional Investor which refers to an investment fund or investor from a foreign country. These investors generally invest in the financial markets of a country other than where they are based. They play a significant role in the volatility and liquidity of the stock market.

Correct Answer: C. Permanent Account Number

PAN stands for Permanent Account Number which is a unique ten-character alphanumeric identifier issued by the Income Tax Department. it serves as a vital proof for tax-paying individuals and entities. PAN is mandatory for major financial transactions such as opening a bank account or buying property.

Correct Answer: C. Credit Rating Information Services of India Limited

CRISIL stands for Credit Rating Information Services of India Limited. It is an Indian analytical company providing ratings, research, and risk and policy advisory services. It was the first credit rating agency established in India.

Correct Answer: D. Wholesale Price Index

WPI stands for Wholesale Price Index which measures the changes in the prices of goods sold and traded in bulk by wholesale businesses. It is one of the key indicators used to monitor inflation in many countries. WPI focuses on the price of goods traded between corporations.

Correct Answer: C. Foreign Exchange Regulation Act

FERA stands for Foreign Exchange Regulation Act which was a law enacted in 1973 to regulate foreign exchange transactions. It was characterized by strict controls and was later replaced by the more liberal FEMA in 1999. FERA aimed to conserve the foreign exchange reserves of the country.

Correct Answer: A. Initial Public Offering

IPO stands for Initial Public Offering which is the process by which a private company offers its shares to the public for the first time. This transition allows a company to raise capital from public investors to fund growth. After an IPO, the company becomes a publicly traded entity on the stock exchange.