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 bodies estimates the national income of India?
[A] Office of the Economic Advisor
[B] Ministry of Statistics
[C] Central Statistical Office
[D] Ministry of Finance
Show Answer
Correct Answer: C [Central Statistical Office]
Notes:
The Central Statistics Office (CSO) is a governmental agency in India under the Ministry of Statistics and Programme Implementation. It is responsible for estimating National Income, Index of Industrial Production and Consumer Price Indices.
2. Which among the following imposes a greater burden (relative to resources) on the poor than on the rich ?
[A] Progressive tax
[B] Regressive Tax
[C] Lump Sum tax
[D] Proportional tax
Show Answer
Correct Answer: B [Regressive Tax]
Notes:
A regressive tax is the one in which tax rate decreases as the amount subject to taxation increases; and the tax rate progresses from high to low. The lowest amount is subject to higher taxation and this leads to individuals with low income bear the highest burden of regressive taxes. Such tax does not take into account the ability to pay.
3. In which year India launched Targeted Public Distribution System ?
[A] 1995
[B] 1996
[C] 1997
[D] 1998
Show Answer
Correct Answer: C [1997]
Notes:
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
4. Approximately what fraction of the world’s oil exports is pumped by the 12-member Organization of the Petroleum Exporting Countries OPEC?
[A] 25%
[B] 45%
[C] 50%
[D] 75%
Show Answer
Correct Answer: B [45%]
Notes:
Organization of the Petroleum Exporting Countries (OPEC) is estimated to account for around 40-45% of total global oil exports currently. In 2021, OPEC’s share of global oil exports was around 43%. As of 2022, it was around 40% of global oil exports.
5. Which of the following is not a Selective Credit Control measure?
[A] Margin Requirements
[B] Regulation of Consumer Credit
[C] Rationing of Credit
[D] Open Market Operations
Show Answer
Correct Answer: D [Open Market Operations]
Notes:
Qualitative or selective methods of credit control refers to those methods which limit the nature or variety of money supply rather than its quantity. Such methods include regulation of margin requirement, credit rationing, regulation of consumer credit and direct action. Open Market Operations is a quantitative method of credit control.
6. Consider the following:
- Allotting of the shares of net proceeds of taxes
- Laying down principles governing grants in aid
- Looking into the financial relations between the central government and the state Governments
The above mentioned functions are carried out by which among the following?
[A] Cabinet Committee on Economic Affairs
[B] National Development Council
[C] Finance Commission
[D] NITI Aayog
Show Answer
Correct Answer: C [Finance Commission]
Notes:
The correct answer is the Finance Commission. The Finance Commission is a constitutional body established under Article 280 of the Indian Constitution. Its primary role is to recommend the distribution of tax revenues between the central and state governments, ensuring fiscal federalism. It also lays down principles for grants-in-aid to states, addressing financial relations between different levels of government. The Finance Commission is constituted every five years, and its recommendations are crucial for maintaining balanced economic development across states.
7. What is this vertical farming?
[A] Its a new method of agriculture in which crops are cultivated inside multi-storey buildings
[B] Its a new method of agriculture in which various unrelated crops are grown together in same tract of land
[C] Its a new method of agriculture in which various closely related crops are grown together in same tract of land
[D] In Vertical farming , many systems such as aquaculture, sericulture, pisciculture and bee culture are altogether used for better use of land and resources
Show Answer
Correct Answer: A [Its a new method of agriculture in which crops are cultivated inside multi-storey buildings]
Notes:
Vertical farming is a greenhouse method of agriculture where commercially viable crops are cultivated inside multi-storey buildings in cities to simulate natural ecological systems. Using advanced greenhouse technology such as hydroponics and aeroponics, the skyscrapers could theoretically produce fish, poultry, fruit and vegetables. Since everything is ‘hydroponics’ in this practice, ie, in mineral solutions, the problems of soil erosion, pesticide toxicity are not there.
8. Which among the following is a nearest term to Pay Order?
[A] Bank Draft
[B] Banker’s Cheque
[C] Bill of Exchange
[D] Promissory Note
Show Answer
Correct Answer: B [ Banker’s Cheque ]
Notes:
A Pay Order is similar to a Banker’s Cheque, as both are instruments issued by banks guaranteeing payment to a specified payee. Unlike a Bank Draft, which can be issued by individuals, a Banker’s Cheque is always issued by the bank itself. Both are considered safer than cash and are used for transactions where the payee requires guaranteed funds.
9. World Bank has recently classified India into:
[A] Lower income economy
[B] High-income economy
[C] Middle-income economy
[D] Lower-middle income economy
Show Answer
Correct Answer: D [ Lower-middle income economy ]
Notes:
As per World Bank classification, India, which was earlier placed under the common umbrella with other ‘developing’ countries has been now placed under the so called ‘lower-middle income country.
10. With reference to various types of Banking, what is “Mixed Banking”?
[A] when banks undertake the activities of commercial and investment banking together
[B] when banks undertake the activities of wholesale and retail banking together
[C] when banks undertake the activities of offline and online banking together
[D] when banks undertake the activities of commercial and cooperative banking together
Show Answer
Correct Answer: A [when banks undertake the activities of commercial and investment banking together]
Notes:Mixed Banking is the system in which banks undertake activities of commercial and investment banking together.
- These banks give short-term and long-term loans to industrial concerns.
- The banks appoint experts which give valuable advice on various financial issues and also help gauge the financial health of companies.
- Industries don’t have to run to different places for differential financial needs.
- They thus promote rapid industrialization.
- They may however pose a grave threat to liquidity of a bank and lead to bad debts.
