Consider the following statements : The Indian rupee is fully convertible : 1. in respect of Current Account of Balance of payment 2. in respect of Capital Account of Balance of payment 3. into gold Which of these statements is/are correct ? (a) 1 alone (b) 3 alone (c) 1 and 2 (d) 1, 2 and 3 (a) In respect of capital account of balance of payment, the indian rupee is partially convertible after 1991. 2. The growth rate of per capita income at current prices is higher than that of per capita income at constant prices, because the latter takes into account the rate of : (a) growth of population (b) increase in price level (c) growth of money supply (d) increase in the wage rate (b) The growth rate of per capita income at current prices is higher than that of per capita income at constant prices, because current prices are influenced by the effect of price inflation 3. Consider the following : 1. Market borrowing 2. Treasury bills 3. Special securities issued to RBI Which of these is/are components(s) of internal debt? (a) 1 only (b) 1 and 2 (c) 2 only (d) 1, 2 and 3 (d) Internal debt is that part of the total debt that is owed to lenders within the country. Market borrowings, Treasury bills and special securities issued to RBI are all sources of internal borrowings 4. Global capital flows to developing countries increased significantly during the nineties. In view of the East Asian financial crisis and Latin American experience, which type of inflow is good for the host country? (a) Commercial loans (b) Foreign Direct Investment (c) Foreign Portfolio Investment (d) External Commercial borrowings (b) FDI is defined as investment by a foreign multinational or its subsidiary or a foreign company in terms of setting up a project in another country either by way of a 100% subsidiary or by way of a joint venture. Thus, FDI investment is long term in nature. Thus, it can not be pulled out of the country at short notice. It is also non-debt creating. 5. Five Year Plan in India is finally approved by : (a) Union Cabinet (b) President on the advice of Prime Minister (c) Planning Commission (d) National Development Council (d) In India plans are formulated by Planning Commission and are finally approved by National Development Council. All state chief ministers are members of NDC. The NDC is headed by prime minister of India.