Indian Economy MCQs

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When the RBI tightens its policy by raising the repo rate, banks face higher borrowing costs from the RBI. Banks increase deposit rates to attract funds from the public. For example, the repo rate was increased multiple times in 2022 and banks responded by increasing fixed deposit rates between May and December 2022.

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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.

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Phillips curve developed by A. W. Phillips says that the inflation and unemployment have a stable and inverse relationship; which means that higher inflation is associated with lower unemployment and vice versa. However, later it was proved that this curve is applicable only in the short-run, and in long-run, inflationary policies would not decrease unemployment.

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As of August 2025, National Stock Exchange became the largest shareholder in NSDL after IDBI Bank reduced its stake by selling 11.11% in the IPO, retaining 14.99%. NSE holds a 24% stake. NSDL was established in 1996. Regulatory norms restrict non-institutional ownership in depositories to 15% in India. NSDL facilitates electronic securities settlement nationwide.

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In 1944 Eight Industrialists of Bombay including Mr. JRD Tata, GD Birla, Purshottamdas Thakurdas , Lala Shriram, kasturbhai lalbhai, AD Shroff , Ardeshir Dalal, & John Mathai working together prepared “A Brief Memorandum Outlining a Plan of Economic Development for India” which was popularly known as Bombay Plan. This plan envisaged doubling the per capita income in 15 years and tripling the national income during this period.

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Euribor stands for Euro Interbank Offered Rate and is published by the European Money Markets Institute. It is a benchmark interest rate at which banks can borrow funds from one another in the euro money market. Euribor is published for five maturities. The rate is used as a reference for financial contracts such as mortgages and loans denominated in euro.

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The “Service Area Approach” was introduced in 1989 by the Reserve Bank of India to enhance rural lending. It aimed to allocate specific geographical areas to banks, ensuring that credit and financial services reached underserved rural populations. This strategy was part of broader efforts to promote financial inclusion and support rural development, addressing the needs of agriculture and small enterprises.

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Singareni Collieries Company Limited (SCCL) is jointly owned by the Government of Telangana and Government of India on a 51:49 equity basis.

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Authorized capital is the maximum share capital stated in a company’s Memorandum of Association. Registered capital and nominal capital are alternate terms for authorized capital. This ceiling cannot be exceeded without shareholder approval and modification in company documents as per the Companies Act, 2013.

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An unlimited company in India is defined under the Companies Act, 2013 as a company not having any limit on the liability of its members. Members of such a company are fully liable for all debts and liabilities incurred, without restriction. Unlimited companies are recognized under Indian company law but are rare in practice due to full personal liability.