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. Who among the following is called father of Economics?
[A] David Hume
[B] Lamarck
[C] Adam Smith
[D] John Stuart Mill
Show Answer
Correct Answer: C [Adam Smith]
Notes:
Adam smith is considered as father of Modern Economics. In his book “The nature & causes of wealth of the Nation’s 1776, he has described economics as science of wealth. According to him economy is the study of wealth only and it deals with its production and consumption. Only material goods which are scarce and useful are wealth.
2. Which commodity is directly affected by international crude oil price fluctuations?
[A] Edible Oils
[B] Cereals
[C] Consumer nondurables
[D] Gold & Silver
Show Answer
Correct Answer: D [Gold & Silver]
Notes:
Gold and silver prices are directly influenced by changes in international crude oil prices. Increases in crude oil prices often cause currency depreciation in oil-importing countries, raising the cost of gold and silver imports. Price fluctuations can also increase demand for gold and silver as safe-haven assets. The global commodities market historically links oil and precious metals prices.
3. In the abbreviation APEDA, what does P stand for ?
[A] Pisciculture
[B] Products
[C] Processed Food Products
[D] Promotion
Show Answer
Correct Answer: C [Processed Food Products]
Notes:
Agricultural and Processed Food Products Export Development Authority (APEDA) is an apex body under the Ministry of Commerce and Industry, Government of India, responsible for the export promotion of agricultural products. Its headquarters are located in New Delhi. It is a statutory body established under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December, 1985.
4. In which year did the Balance of Payments (BOP) crisis occur in the Indian economy?
[A] 1990
[B] 1991
[C] 1995
[D] 1999
Show Answer
Correct Answer: B [1991]
Notes:
The Balance of Payments (BOP) crisis struck India in 1991. This triggered an economic crisis due to escalating oil prices, inflation and low foreign exchange reserves, which beleaguered India’s ability of import payments. Repercussions included severe rupee devaluation. The crisis incited economic liberalization, lowering of import tariffs and eased foreign exchange restrictions. With help from International Monetary Fund and other organizations, India managed to stabilize its situation, highlighting the necessity for constant economic overhauls to sustain financial equilibrium.
5. Which among the following was previously known as Imperial Bank of India?
[A] State bank of India
[B] Reserve Bank of India
[C] Punjab National bank
[D] ICICI
Show Answer
Correct Answer: A [State bank of India]
Notes:
The correct answer is State Bank of India (SBI). It was established in 1955, evolving from the Imperial Bank of India, which itself was formed in 1921. The Imperial Bank was a successor to the Bank of Calcutta, founded in 1806, making SBI one of the oldest banks in India. SBI is now the largest bank in India, serving millions of customers worldwide.
6. Which among the following was the main objective of the Fiscal Responsibility and Budget Management Act, 2003?
[A] Achieve Fiscal Surplus
[B] Eliminate Revenue deficit
[C] Eliminate Fiscal Deficit
[D] Stop Money Laundering
Show Answer
Correct Answer: B [Eliminate Revenue deficit]
Notes:
The main objective of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, was to eliminate the revenue deficit. This act aimed to ensure fiscal discipline by setting targets for the government to reduce its fiscal deficit and improve the overall financial health of the economy. The act mandates the government to present a medium-term fiscal policy and aims to enhance transparency in fiscal operations. It was introduced in response to rising fiscal deficits in the late 1990s and early 2000s, which posed risks to economic stability.
7. The mosquito fern or Azolla is one of the most important bio fertilizers. In association with which among the following Azolla acts as a biofertilizer?
[A] Bacteria
[B] Blue-green algae
[C] Fungus
[D] Green algae
Show Answer
Correct Answer: B [ Blue-green algae]
Notes:
Bio-fertilizers such as Rhizobium, Azotobacter, Azospirillum and blue green algae (BGA) have been in use a long time. Anabaena, a blue green alga in association with water fern Azolla contributes nitrogen and also enriches soils with organic matter.
8. Which of the following is / are auctioned in Open Market Operations?
[A] Shares
[B] Debentures
[C] Securities
[D] Bullion
Show Answer
Correct Answer: C [ Securities ]
Notes:
Open Market Operations refer to the purchase and sale of the Government securities (G-Secs) by RBI from / to market.
9. Which Indian special economic zone was originally established as Asia’s first Export Processing Zone in 1965?
[A] Kochi
[B] Tuticorin
[C] Kandla
[D] Paradip
Show Answer
Correct Answer: C [Kandla]
Notes:
Kandla Special Economic Zone is associated with the port city of Kandla in Gujarat. It began in 1965 as Asia’s first Export Processing Zone and was later converted into a Special Economic Zone in 2000. This makes Kandla the correct choice among the given options. The zone has remained an important trade and export hub, supporting units engaged in manufacturing and export-oriented activities under India’s SEZ framework.
10. Micro credit or micro finance is a novel approach to bank with the poor. In this approach bank credit is extended to the poor through which of the follwing?
[A] Self Help Groups
[B] Anganwadees
[C] Co-operative Credit Societies
[D] RBI
Show Answer
Correct Answer: A [Self Help Groups]
Notes:
Microfinance is a category of financial services targeted at individuals and small businesses who lack access to conventional banking and related services.
