IE&IFS Chapter 7 QUIZ Economic Reforms

IE&IFS Chapter 7 Economic Reforms

Test your knowledge of Chapter 7: Economic Reforms with this JAIIB MCQs Practice Pack, covering key topics such as: 📌 Topics Covered:

An overview of Economic Reforms in India
The LPG Transformation: Liberalisation, Privatisation, & Globalisation
Economic Transformation in the Real Sector
Economic Transformation in the Financial Sector (Narasimham Committee recommendations)
Reforms in Banking, Insurance, and Capital Markets
India's Integration with the Global Economy ✅ Correct answers with explanations are provided at the end for effective revision. Sharpen your preparation, identify weak areas, and build exam confidence with these practice questions. Stay consistent. Stay exam-ready. 📚 For more daily quizzes, PDFs, and complete JAIIB study material, visit bankingshiksha.com.

1 / 10

1. The 1991 economic reforms in India are often summarized by the acronym 'LPG'. What does the 'L' in LPG stand for?

A. Labour

B. Land

C. Liberalisation

D. Licensing

2 / 10

2. What was the primary trigger for the comprehensive economic reforms introduced in India in 1991?

A. A period of high agricultural surplus.

B. A severe economic crisis, including a sharp drop in foreign exchange reserves.

C. A political decision to completely privatize all public sector units.

D. A global trend of adopting socialist policies.

3 / 10

3. The first Narasimham Committee (1991) was instrumental in reforming the banking sector. What was one of its key recommendations that fundamentally changed how banks manage risk?

A. The nationalization of more private banks.

B. Increasing the number of government-controlled interest rates.

C. The introduction of prudential norms for income recognition, asset classification, and provisioning for bad loans.

D. Restricting the entry of new private banks into the sector.

4 / 10

4. As part of the foreign exchange market reforms, the highly restrictive Foreign Exchange Regulation Act (FERA) was replaced by which new, more liberal legislation?

A. Foreign Exchange Transaction Act (FETA)

B. Foreign Exchange Management Act (FEMA)

C. Foreign Investment Promotion Act (FIPA)

D. Overseas Transaction Regulation Act (OTRA)

5 / 10

5. Which regulatory body was established with statutory powers in 1992 to oversee and regulate the Indian capital markets, including stock exchanges and mutual funds?

A. Reserve Bank of India (RBI)

B. Insurance Regulatory and Development Authority (IRDA)

C. NITI Aayog

D. Securities and Exchange Board of India (SEBI)

6 / 10

6. Complete the following sentence: As part of its supervisory reforms for the banking sector, the RBI implemented the __________ rating system to evaluate a bank's Capital adequacy, Asset quality, Management, Earnings, and Liquidity.

A. CIBIL

B. CAMELS

C. CRISIL

D. SWIFT

7 / 10

7. Complete the following sentence: The limited economic reforms undertaken in India during the 1980s, which involved partial deregulation, were influenced by a set of pro-market policy ideas known as the __________.

A. Bombay Plan

B. Washington Consensus

C. Bretton Woods System

D. NITI Aayog Doctrine

8 / 10

8. Which of the following statements about the LPG reforms in India is TRUE?

A. Liberalisation involved increasing government control and the number of industrial licenses.

B. Privatisation aimed to expand the role and number of public sector enterprises.

C. Globalisation refers to the integration of the Indian economy with the global economy.

D. The reforms were a proactive choice made from a position of strong economic stability.

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9. Which of the following statements about the institutional and legal reforms in the financial sector is TRUE?

A. The SARFAESI Act was passed to make it more difficult for banks to take possession of collateral.

B. Debt Recovery Tribunals (DRTs) were established to slow down the loan recovery process for corporate borrowers.

C. The Credit Information Bureau (CIBIL) was set up to facilitate the systematic exchange of credit information on borrowers.

D. The Insolvency and Bankruptcy Code (IBC) was repealed to give more freedom to businesses.

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10. Use the following table to find the correct match.

Column A (Body/Act)	Column B (Area of Regulation/Function)
1. SEBI	a. Governs the insurance industry.
2. IRDA	b. Facilitates faster recovery of bad loans.
3. FEMA	c. Regulates the capital markets.
4. DRT	d. Manages foreign exchange transactions.

Question : From the table above, which of the following is a correct match?

A. 1-b

B. 2-a

C. 3-c

D. 4-d

Your score is

The average score is 20%

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IE&IFS Chapter 7 QUIZ Economic Reforms

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