Chapter Exam

Chapter-8 Liberalisation — Online MCQ Test

Q: In which year did India officially launch its liberalisation policy?

Answer: B. 1991 — India initiated economic liberalisation in 1991 under Finance Minister Manmohan Singh during a severe balance of payments crisis.

ECONOMICS · Grade 12 · CBSE(NCERT)

Practice Chapter-8 Liberalisation with a free chapter-wise online MCQ test for CBSE(NCERT) Grade 12 ECONOMICS. This chapter covers: Privatisation and Globalisation (LPG). AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter-8 Liberalisation — Important Questions & Answers (FAQ)

Frequently asked questions from CBSE(NCERT) Grade 12 ECONOMICS — Chapter-8 Liberalisation, with answers and explanations. These are sample questions; the exam has its own separate question set.

What does LPG stand for in the context of Indian economic reforms?

A. Liberalisation, Privatisation, and Globalisation ✓
B. Liquified Petroleum Gas and Privatisation
C. Liberalisation, Public Sector, and Growth
D. Liquidity, Price, and Gross Domestic Product

Answer: A. Liberalisation, Privatisation, and Globalisation
LPG is the acronym for the three pillars of India's economic reform strategy introduced in 1991.

In which year did India officially launch its liberalisation policy?

A. 1985
B. 1991 ✓
C. 1995
D. 2000

Answer: B. 1991
India initiated economic liberalisation in 1991 under Finance Minister Manmohan Singh during a severe balance of payments crisis.

What was the immediate economic crisis that led to India's liberalisation in 1991?

A. High inflation and unemployment
B. Severe balance of payments crisis and depletion of foreign exchange reserves ✓
C. Excessive agricultural production
D. Rapid increase in population

Answer: B. Severe balance of payments crisis and depletion of foreign exchange reserves
India faced a severe balance of payments crisis with depleted foreign exchange reserves, making liberalisation necessary.

Analyse the statement: 'Liberalisation guarantees economic growth for all sections of society.' Which is true?

A. The statement is completely accurate
B. Liberalisation creates growth but benefits are unevenly distributed; some groups may be disadvantaged ✓
C. Liberalisation has no connection with economic growth
D. Only agricultural workers benefit from liberalisation

Answer: B. Liberalisation creates growth but benefits are unevenly distributed; some groups may be disadvantaged
While liberalisation can promote overall economic growth, the benefits are often unevenly distributed, potentially marginalising certain groups.

Tricky Question: The MRTP Act's relaxation was justified because: which statement is LEAST defensible?

A. Large firms could achieve economies of scale in global competition
B. Monopoly restrictions prevented Indian firms from competing internationally
C. Small firms should be eliminated completely from the economy ✓
D. Larger firms could attract FDI and technology more easily

Answer: C. Small firms should be eliminated completely from the economy
Complete elimination of small firms is unjustifiable. The MRTP relaxation aimed to help Indian firms compete globally, not eliminate small businesses.