Indian Economy MCQs
Indian Economy Multiple Choice Questions (MCQs) for SSC, State and all One Day Examinations of India. Objective Questions on Indian Economy for competitive examinations.
1. Which of the following sectors is regulated by IRDA ?
[A] Insurance
[B] Industry
[C] Finance
[D] Investment
Show Answer
Correct Answer: A [Insurance]
Notes:
The Insurance Regulatory and Development Authority of India (IRDAI) is the national agency of Government of India (GoI) for the Indian insurance industry. It is the regulatory body established under the Insurance Regulatory and Development Authority Act, 1999 and reports to Ministry of finance. Its headquarters is in Hyderabad, Telangana.
2. What is the primary motive driving the countries to involuntarily depreciate their currencies?
[A] To maintain dominance in export markets
[B] To bolster capital inflows
[C] To curb inflation
[D] All of the above
Show Answer
Correct Answer: A [To maintain dominance in export markets]
Notes:
Countries often resort to competitive devaluation of their currencies, primarily to maintain their hold in export markets. A weaker currency makes a country’s exports cheaper and thus more attractive for international buyers. This, in turn, can lead to an increase in export volumes, and higher revenues from exports. While the other options – boosting capital inflows and checking inflation – might be indirect benefits, they are typically not the main drivers of currency depreciation.
3. Which statement best describes the term “Transfer Pricing” that India is contending with?
[A] It is a tax evasion method involving illicit capital flows out of the country
[B] It is a factor causing the continuous rise in food prices in India
[C] It is a recent phenomenon resulting in the bad loans of Indian banks
[D] It is a global phenomenon causing the devaluation of the Indian currency against reserve currencies
Show Answer
Correct Answer: A [It is a tax evasion method involving illicit capital flows out of the country]
Notes:
Transfer pricing refers to the pricing of goods or services within a multinational corporation or group. These transactions may not be influenced by market forces that typically shape relations between individual firms. This system allows for a possible method of tax evasion, where one party transfers goods or services to another for a specific price, often facilitating illicit capital flows out of the country.
4. Which of the following organizations publishes the list of Global Systemically Important Banks (G-SIBs)?
[A] World Bank
[B] International Monetary Fund
[C] European Investment Bank
[D] Financial Stability Board (FSB) in consultation with Basel Committee on Banking Supervision (BCBS)
Show Answer
Correct Answer: D [ Financial Stability Board (FSB) in consultation with Basel Committee on Banking Supervision (BCBS) ]
Notes:
Financial Stability Board (FSB) in consultation with Basel Committee on Banking Supervision (BCBS) publishes the Global Systemically Important Banks (G-SIBs).
5. The terms IBAN, BBAN, SEPA and SWIFT are associated with:
[A] International Banking
[B] Disaster Management
[C] Nuclear Waste Management
[D] International Maritime Boundaries
Show Answer
Correct Answer: A [ International Banking ]
Notes:
SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. SEPA stands for Single Euro Payment Are. The aim of SEPA is to ensure that payments within Europe take place as simply and effectively as those within a single country. IBAN stands for the International Bank Account Number is a unique identifier helping banks process payments from person to person automatically. The IBAN contains all necessary information of the owner if a bank account such as the account number, bank and branch information and country code. BBAN is short for Basic Bank Account Number. It represents a country-specific bank account number.
6. What is the primary aim of enacting the SARFAESI Act?
[A] Recovering Loans
[B] Increasing Deposits
[C] Transparent appointment of Directors
[D] Reducing Corruptions and Scams
Show Answer
Correct Answer: A [Recovering Loans]
Notes:
The SARFAESI Act allowed the creation of asset reconstruction companies (ARC) and allowed banks to sell their non-performing assets to ARCs.
7. Which of the following is an economic system combining private and state enterprise?
[A] Private economy
[B] Market economy
[C] Mixed economy
[D] Centrally planned economy
Show Answer
Correct Answer: C [Mixed economy]
Notes:
A mixed economy is variously defined as an economic system blending elements of market economies with elements of planned economies, free markets with state interventionism, or private enterprise with public enterprise.
8. Courier service comes under which of the following sectors?
[A] Primary
[B] Secondary
[C] Both Secondary and Tertiary
[D] Tertiary
Show Answer
Correct Answer: D [Tertiary]
Notes:
The tertiary industry is the segment of the economy that provides services to its consumers, including a wide range of businesses such as financial institutions, schools and restaurants. It is also known as the tertiary sector or service industry/sector.
9. In capital markets, which of the following are the major suppliers of trading instruments?
[A] liquid corporations
[B] instrumental corporations
[C] manufacturing corporations
[D] government and corporations
Show Answer
Correct Answer: D [government and corporations]
Notes:
In capital markets, government and corporations are the major suppliers of trading instruments. Capital markets refer to the places where savings and investments are moved between suppliers of capital and those who are in need of capital.
10. Who among the following regulates the NBFCs in India?
[A] Reserve Bank of India
[B] SEBI
[C] Government of India
[D] None of the above
Show Answer
Correct Answer: A [Reserve Bank of India]
Notes:
The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the [[Reserve Bank of India Act, 1934]] (Chapter III-B) and the directions issued by it.
