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 NOT a core WTO agreement or mechanism?
[A] Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
[B] General Agreement on Trade in Services (GATS)
[C] Plurilateral Agreement on Government Procurement
[D] Multilateral Agreement on Investment (MAI)
Show Answer
Correct Answer: D [Multilateral Agreement on Investment (MAI)]
Notes:
The Multilateral Agreement on Investment (MAI) was negotiated by OECD countries in the 1990s. MAI was not concluded and is not part of the World Trade Organization framework. WTO core agreements include GATS, TRIPS, and GATT. The Plurilateral Agreement on Government Procurement functions within the WTO through voluntary acceptance by signatory members only. MAI remains outside the WTO system and was never implemented.
2. A persistent fall in the general price level of goods and services is known as __:
[A] Deflation
[B] Disinflation
[C] Stagflation
[D] Depression
Show Answer
Correct Answer: A [ Deflation ]
Notes:
Inflation refers to rise in general price level of goods and services, deflation is fall in general price level of goods and services. Deflation is inflation in negative zone, i.e. a decrease in the general price level of goods and services.
3. Which among the following is considered to be the best measure of an increase in a country’s economic efficiency?
[A] Increase in annual private investment
[B] Increase in real national income
[C] Increase in real per capita income
[D] Increase in net annual investment
Show Answer
Correct Answer: C [Increase in real per capita income]
Notes:
Per capita income is a measure of the average income earned per person in a given area (usually in a country) in a particular year. When this figure is adjusted for inflation, the real per capita income is obtained, which gives the best measure of an increase in a country’s economic efficiency.
4. A good that is non-rivalrous and non-excludable, and whose benefits cannot be priced and therefore to which the principle of exclusion does not apply, comes under which heading?
[A] Pure Private Goods
[B] Pure Public Goods
[C] Pure Free Goods
[D] Pure Market Goods
Show Answer
Correct Answer: B [Pure Public Goods]
Notes:
Pure public goods are both non-rivalrous and non-excludable. In such goods, one person’s consumption does not reduce availability for others, and it is difficult to exclude anyone from benefiting once the good is provided. Common examples include national defense, street lighting, and clean air.
5. Which among the following agency is responsible for enforcement of Foreign Exchange Management Act 1999 and Prevention of money Laundering Act 2002 in India?
[A] Reserve Bank of India
[B] Department of Revenue
[C] Enforcement Directorate
[D] Income Tax Department
Show Answer
Correct Answer: C [Enforcement Directorate]
6. Where can popular tourist attractions such as Chatham Saw Mill, Wandoor Beach, Mount Manipur and Limestone Caves be found?
[A] Goa
[B] Andaman and Nicobar Islands
[C] Lakshadweep
[D] Tamil Nadu
Show Answer
Correct Answer: B [Andaman and Nicobar Islands]
Notes:
Chatham Saw Mill, Wandoor Beach, Mount Manipur and the Limestone Caves are all well-known attractions in the Andaman and Nicobar Islands. Chatham Saw Mill is located near Port Blair, Wandoor Beach is a popular coastal spot on South Andaman, Mount Manipur is the renamed Mount Harriet peak, and the limestone caves are famous in Baratang. Together, these sites point to the Andaman and Nicobar Islands, a Union Territory in the Bay of Bengal.
7. Which sector uses the largest share of natural gas consumed in India?
[A] Fertilizers
[B] City Gas Distribution (Cooking Gas)
[C] Power Production
[D] Refineries
Show Answer
Correct Answer: A [Fertilizers]
Notes:
Among the major consuming sectors, fertilizers account for the largest share of natural gas consumption in India. Gas is used extensively in fertilizer plants, especially for ammonia and urea production, making this sector the biggest user. City Gas Distribution is also a major consumer, but its share is lower than fertilizers. Power production and refineries consume significant quantities too, yet they do not exceed the fertilizer sector in overall gas use.
8. The negotiable instruments are passed freely from one party to another almost in the same way as money. To be negotiable, a promissory note must include a / an:
[A] conditional promise to pay on demand or at a definite time
[B] unconditional promise to pay on demand or at an indefinite time
[C] unconditional promise to pay on demand or at a definite time
[D] conditional promise to pay on demand or at an indefinite time
Show Answer
Correct Answer: C [unconditional promise to pay on demand or at a definite time]
Notes:
A promissory note is a negotiable instrument only when it contains an unconditional promise to pay a certain sum of money. The payment may be made on demand or at a definite time, but it cannot depend on any condition. This is a basic requirement under negotiable instruments law. Therefore, option 3 correctly states the essential feature of negotiability in a promissory note.
9. Consider the following statements:
- Stocks offer higher average returns than bonds and other fixed-income investments, but with correspondingly higher volatility and risk.
- Stock prices are primarily governed by supply and demand, with earnings being the most important influencing factor.
Which of the above statements is/are correct?
[A] Both 1 and 2
[B] Only 1
[C] Only 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: A [Both 1 and 2]
Notes:
Both statements are correct. Historically, stocks have yielded higher average returns than bonds, but with greater short-term volatility and risk. Stock prices move according to supply and demand dynamics, but corporate earnings are widely recognized as the most significant fundamental factor driving these price changes and influencing investor sentiment and market pricing.
10. Which state ranked first in India’s 2019 ease of doing business assessment?
[A] Gujarat
[B] Uttar Pradesh
[C] Telangana
[D] Andhra Pradesh
Show Answer
Correct Answer: D [Andhra Pradesh]
Notes:
Andhra Pradesh secured the top position in the Business Reforms Action Plan (BRAP) 2019 assessment for ease of doing business in India. The assessment was conducted jointly by the Department for Promotion of Industry and Internal Trade and the World Bank. Andhra Pradesh implemented 100% of the reforms suggested under BRAP 2019. This ranking was released in September 2020.
