JAIIB Paper 1 Module A Quiz 5

Productivity measures output relative to the inputs used. Better machinery, skills or production processes can allow the same inputs to produce more output, raising productivity. This is different from merely adding more workers or capital without improving their efficiency.

Economic growth generally refers to an increase in real national output or real income over time. Economic development is broader: it includes structural transformation and improvements in health, education, living standards, opportunities and distribution. Growth can support development, but it does not guarantee that all welfare indicators improve.

Structural transformation means a significant change in the composition of output and employment across sectors, often from agriculture towards industry and services. The quality of this transition matters: movement into productive, secure jobs tends to yield larger gains than movement into low-productivity informal work.

The quaternary sector is commonly associated with knowledge-intensive activities such as information technology, research, data analytics and specialised information services. Farming and mining belong to the primary sector, while steel manufacturing belongs to the secondary sector.

Timely information can reduce information asymmetry, help farmers choose when and where to sell, and improve planning for inputs and transport. It cannot eliminate weather, price or production risks, and it does not by itself guarantee a particular sale price or replace the need for credit.

The Green Revolution combined high-yielding varieties with irrigation, fertilisers, pesticides and improved practices. It helped raise foodgrain production, particularly wheat and rice in better-irrigated regions. Its benefits were not uniform and it also raised concerns about regional disparities, soil health and water use.

From 1 April 2025, the small-enterprise limits are investment not exceeding ₹25 crore and turnover not exceeding ₹100 crore. The stated enterprise is within both limits, so it is small. The revised limits are: micro ₹2.5 crore/₹10 crore, small ₹25 crore/₹100 crore and medium ₹125 crore/₹500 crore. Both investment and turnover criteria must be considered.

PSL is intended to improve the flow of credit to sectors and segments that are important for inclusive development but may remain underserved. Banks must still comply with applicable eligibility conditions, prudential standards and credit appraisal requirements. PSL does not guarantee approval to every applicant or set one universal interest rate.

The RBI’s Priority Sector Lending Directions, 2025 list categories including agriculture, MSMEs, export credit, education, housing, social infrastructure, renewable energy and others. Eligibility depends on the detailed conditions in the Directions; not every loan associated with a broad industry automatically qualifies.

The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy programme intended to support establishment of eligible new micro-enterprises in the non-farm sector and generate employment. The other options relate to monetary policy or tax administration, not enterprise-creation subsidies.

A PPP is a contractual arrangement in which public and private parties share project responsibilities and allocate risks according to the agreement. Risk allocation should place each risk with the party best able to manage it. The exact financing, ownership, revenue and handback arrangements vary by PPP model.

Preventive healthcare—including vaccination, screening, sanitation and health education—can reduce illness and premature mortality. Better health supports learning, labour-force participation and productivity. Health and education are central elements of social infrastructure, complementing rather than replacing one another.

Protectionism uses measures such as tariffs, quotas or restrictions to limit foreign competition and support domestic producers. Such measures may protect selected industries in the short term, but can also raise input costs, reduce competition and invite retaliation. The effects depend on design and context.

Real-sector reforms affect production, investment, trade, competition and the operation of firms—for example, reducing unnecessary licensing barriers. Bank capital, liquidity and securities-settlement rules belong to the financial sector. The distinction helps organise the broad reforms introduced in India over time.

Exports of goods are recorded as credits in the goods component of the current account. The corresponding payment or settlement may affect financial transactions, but the export itself is a current-account transaction. The balance of payments records transactions between residents and non-residents over a period.

FDI generally involves a lasting interest and a degree of influence or control in an enterprise in another economy. Portfolio investment generally involves tradable financial assets without the same lasting management interest. Exact statistical thresholds and reporting rules depend on the applicable framework.

The IMF promotes international monetary cooperation and financial stability, monitors economic developments and can provide financing to members facing balance-of-payments problems, subject to its policies and programme conditions. It is not a general lender to private companies and does not operate the WTO dispute system.

The WTO administers multilateral trade agreements, provides a forum for negotiations and has a framework for resolving trade disputes. It does not issue national currencies, regulate all domestic banks or manage member governments’ budgets.

Sustainable development seeks to balance economic progress, social inclusion and environmental protection over time. It does not require ending economic activity; rather, it encourages development paths that meet current needs without undermining future generations’ ability to meet theirs.

Jobless growth describes a situation where output grows without a commensurate increase in employment. Rising inequality refers to a widening gap in income, wealth or opportunity. The two can coexist, which is why growth is often assessed alongside employment, distribution and human-development indicators.