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 is the largest source of irrigation in India after rainfall?
[A] Canals
[B] Rivers
[C] Tanks
[D] Tubewells
Show Answer
Correct Answer: D [Tubewells]
Notes:
Tubewells provide the highest share of irrigation among artificial sources in India after rainfall. According to the 2015-16 Agricultural Census, tubewells accounted for about 46% of the net irrigated area. Tubewell irrigation is most prevalent in northern Indian states such as Uttar Pradesh and Punjab. Canals, rivers, and tanks contribute comparatively less to the total irrigated area.
2. In which of the following countries, International Rice Research center is Located?
[A] Thailand
[B] Malaysia
[C] Philippines
[D] Indonesia
Show Answer
Correct Answer: C [Philippines]
Notes:
The International Rice Research Institute (IRRI) is headquartered in Philippines and has operating offices in seventeen countries. The Institute was originally established in the yeat 1960. It aims to reduce poverty and hunger, improve the health of rice farmers and consumers.
3. Which among the following measures for controlling inflation can be taken by the Reserve Bank of India but not by the Government of India?
[A] Implementing progressive taxation policies
[B] Adjusting public sector expenditure budgets
[C] Credit rationing to limit money supply
[D] Regulating foreign direct investment flows
Show Answer
Correct Answer: C [Credit rationing to limit money supply]
Notes:
The Reserve Bank of India can use credit rationing to limit money supply. Credit rationing is a monetary policy tool of RBI. Progressive taxation and public sector expenditure are managed by the Government of India as fiscal policy. Regulation of foreign direct investment flows is also executed by the government. RBI and government use separate policy instruments for inflation control.
4. What is Collateralized Borrowing and Lending Obligation (CBLO) in banking?
[A] An export financing scheme requiring specific borrower obligations
[B] A central bank facility for state government short-term lending
[C] A CCIL-developed, RBI-approved money market instrument for collateralized borrowing and lending
[D] A derivative instrument for trading in currency and commodity futures
Show Answer
Correct Answer: C [A CCIL-developed, RBI-approved money market instrument for collateralized borrowing and lending]
Notes:
Collateralized Borrowing and Lending Obligation (CBLO) was introduced in India in 2003. It is a money market instrument developed by the Clearing Corporation of India Limited (CCIL) and approved by the Reserve Bank of India. CBLO facilitates collateralized borrowing and lending among financial institutions by using government securities as collateral and operates under the RBI’s regulatory framework, with maturity periods from one day to one year.
5. Which companies most frequently conduct Initial Public Offerings (IPOs)?
[A] Very small cottage industries
[B] Smaller, younger companies needing capital for expansion
[C] Large privately-owned companies
[D] Public Sector Companies
Show Answer
Correct Answer: B [Smaller, younger companies needing capital for expansion]
Notes:
An Initial Public Offering (IPO) is mainly undertaken by smaller, younger companies to raise equity capital for business expansion. Startups and emerging firms become publicly traded through the IPO process to fund growth. Most IPOs globally in the last decade have been by such companies seeking investments for research, development, and market expansion.
6. Which among the following coal producer of India is outside the Coal India Ltd?
[A] Southern Eastern Coalfields (Bilaspur)
[B] Bharat Coking Coal (Dhanbad)
[C] Mahanandi Coalfields (Sambalpur)
[D] Singerani Collieries Company (Telangana)
Show Answer
Correct Answer: D [Singerani Collieries Company (Telangana)]
Notes:
Singareni Collieries Company Limited (SCCL) is jointly owned by the Government of Telangana and Government of India on a 51:49 equity basis.
7. Which among the following bodies regulated the cooperative banks in India?
[A] Reserve Bank of India
[B] Small Industries Development Bank of India
[C] National Bank for Agriculture and Rural Development
[D] National Cooperative Union of India
Show Answer
Correct Answer: A [ Reserve Bank of India ]
Notes:
As per the Cooperative Societies Act, Reserve Bank of India (RBI) regulates the cooperative banks and these are governed by the Banking Regulations Act, 1949 and the Banking Laws (Cooperative Societies) Act, 1965.
8. In context with the share markets in India, public issue refers to which of the following?
[A] first time issuance of shares of a company via stock exchange
[B] first time issuance of shares of a public company via stock exchange
[C] allotment of shares to 50 or more investors
[D] allotment of shares to public by 50% or more fraction of the total equity
Show Answer
Correct Answer: C [ allotment of shares to 50 or more investors ]
Notes:
The primary market issuance is done either through public issues or private placement. Under Companies Act, 1956, an issue is referred as public if it results in allotment of securities to 50 investors or more. However, when the issuer makes an issue of securities to a select group of persons not exceeding 49 and which is neither a rights issue nor a public issue it is called a private placement.
9. Which scenario best describes a Goldilocks economy?
[A] High inflation, High economic growth
[B] Low inflation, High economic growth
[C] Low inflation, Steady economic growth
[D] High inflation, Low economic growth
Show Answer
Correct Answer: C [Low inflation, Steady economic growth]
Notes:
A Goldilocks economy signifies a balance of low inflation and steady growth, avoiding extremes. The term is widely used in macroeconomics to represent optimal conditions for policy makers. It is named after the fairy tale character Goldilocks, indicating “just right” economic conditions.
10. 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.
