Topic Details (Notes format)

Economic Reforms of 1991

Subject: Economics

Book: Comprehensive Indian Economy

In 1991, India faced a severe balance of payments crisis that triggered sweeping reforms known as Liberalization, Privatization, and Globalization (LPG). These reforms dismantled the license-quota system, opened markets to foreign investment, devalued the rupee for export competitiveness, and paved the way for private sector efficiency. The goal was to integrate India with the global economy and revive growth by reducing state controls. Exam-oriented insights include the reasons for the crisis, specifics of structural adjustment policies, and the impact on sectors like banking, trade, and manufacturing over subsequent decades.

Practice Questions

Which of the following is NOT a component of Aggregate Demand?

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Which of the following is a feature of monopolistic competition?

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Which of the following is an example of a renewable resource?

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Which of the following is NOT part of the World Bank Group?

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Which of the following is considered a public good?

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What does the term “national income” refer to?

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Which term refers to an economy that has elements of both capitalism and socialism?

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What is the term for goods that are used together, such as cars and fuel?

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What is meant by “crowding out” in economics?

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Which of the following causes demand-pull inflation?

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