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 among the following revolutions is related to ‘fertilizers’?
[A] Silver Revolution
[B] Grey Revolution
[C] Golden Revolution
[D] Pink Revolution
Show Answer
Correct Answer: B [Grey Revolution]
Notes:
Green Revolution- Food grains,
White Revolution Milk,
Yellow Revolution-Oil seeds,
Blue Revolution-Fisheries
Golden Revolution-Fruits;
Silver Revolution-Eggs,
Round Revolution Potato,
Pink Revolution-Meat,
Grey Revolution (Fertilizers)
2. Which is the opposite activity of hedging in financial markets?
[A] Arbitrage
[B] Speculation
[C] Spread
[D] Short selling
Show Answer
Correct Answer: B [Speculation]
Notes:
Speculation involves taking positions to profit from expected price changes, accepting risk for potential gain. Hedging uses opposite positions to reduce price risk, while speculation increases risk exposure for possible reward. Both activities occur in securities, currency, and futures markets. Speculators provide market liquidity by accepting risk. Regulators monitor speculative activities to maintain market stability.
3. Which is the primary unit under the Lead Bank Scheme for banking infrastructure?
[A] Town
[B] Village
[C] District
[D] Block
Show Answer
Correct Answer: C [District]
Notes:
The Lead Bank Scheme was introduced by the Reserve Bank of India in 1969. The scheme adopted a district-based approach for banking infrastructure development. Under this scheme, each district is allocated to a commercial bank, called the Lead Bank for the district. The scheme covers all districts in India except certain metropolitan cities and Union Territories.
4. Which sector contributes most to India’s GDP in FY26?
[A] Primary sector
[B] Secondary sector
[C] Tertiary sector
[D] Quaternary sector
Show Answer
Correct Answer: C [Tertiary sector]
Notes:
The tertiary (services) sector is the largest contributor to India’s GDP in FY26, with a share of 56.4% in Gross Value Added, according to the First Advance Estimates. The services sector grew by 9.1% in FY26.
5. Why are commercial banks called creators of money?
[A] Because they buy securities from the central government
[B] Because the loans they issue create new deposits
[C] Because they distribute existing money in the system
[D] Because they purchase investments from investors
Show Answer
Correct Answer: B [Because the loans they issue create new deposits]
Notes:
Commercial banks create money when issuing loans by crediting the borrower’s account with new deposits, thus increasing the money supply. This accounts for over 90% of money creation in modern economies, as seen in the period 2001-2020. The process operates under central bank monetary policies and reserve requirements. The bank records loans as assets and matching deposits as liabilities, expanding broad money aggregates such as M1 to M4 without needing prior cash deposits.
6. Who among the following are the beneficiaries of Ways and Means Advances (WMA) facility of Reserve Bank of India?
[A] Commercial Banks
[B] Regional Rural banks
[C] State Governments
[D] Authorized Dealers of Foreign Exchanges
Show Answer
Correct Answer: C [State Governments]
Notes:
The Reserve Bank of India (RBI) provides temporary loan facilities to the central and state governments. This loan facility is called Ways and Means Advances (WMA).
7. SIDBI was established as a subsidiary of which institution in 1990?
[A] Industrial Investment Bank of India Ltd
[B] Industrial Finance Corporation of India
[C] Reserve Bank of India
[D] Industrial Development Bank of India
Show Answer
Correct Answer: D [Industrial Development Bank of India]
Notes:
SIDBI was established on April 2, 1990, as a wholly owned subsidiary of the Industrial Development Bank of India (IDBI) under an Act of Parliament. SIDBI acts as the principal financial institution for promoting, financing, and developing the Micro, Small, and Medium Enterprises (MSME) sector in India. SIDBI’s headquarters are in Lucknow, Uttar Pradesh.
8. Who among the following was the architect of second five year plan ?
[A] Jawahar Lal Nehru
[B] C D Deshmukh
[C] P C Mahalanobis
[D] Subimal Datt
Show Answer
Correct Answer: C [P C Mahalanobis]
Notes:
Prasantha Chandra Mahalanobis or P. C. Mahalanobis (1893-1972) was the first Indian statistician to receive world recognition. In 1933, Mahalanobis founded the first Indian statistical journal Sankhya, along the lines of Biometrika, which had inspired him greatly. He was architect of India’s second five year plan and due to this second plan is known as Mahalanobis model.
9. Economic Planning comes under which of the following lists ?
[A] Union List
[B] Concurrent list
[C] State List
[D] None of them
Show Answer
Correct Answer: B [Concurrent list]
Notes:
Economic Planning refers to any plans of economic activity which point to achieve specific social and economic outcomes. It is a subject matter of concurrent list in 7th schedule of Indian constitution.
10. How many key infrastructure sectors are known as Core sector in Indian Economy, used for Index of Industrial Production (IIP) data?
[A] 5
[B] 6
[C] 7
[D] 8
Show Answer
Correct Answer: D [8]
Notes:
There are 8 Core Industries or core sectors of the economy viz. coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity used in Index of Industrial Production (IIP).
