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 of the following industries is the not covered in the Index of Eight Core Industries?
[A] Electricity
[B] Crude Oil
[C] Natural Gas
[D] Pharmaceuticals
Show Answer
Correct Answer: D [Pharmaceuticals]
Notes:
The industries covered in the Index of Eight Core include Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
2. Many a times we read about “Circuit Breakers” in share markets. They are temporary measures which halt the trading on which of the following occasion?
[A] On special days
[B] When a new share is traded for the first time
[C] When the prices of particular stock’s) rises or falls by a specified amount in specified time
[D] When trading of a particular stock(s) has rises beyond a specified volume
Show Answer
Correct Answer: C [When the prices of particular stock’s) rises or falls by a specified amount in specified time]
Notes:
Circuit breakers are pre-defined values in percentage terms, which trigger an automatic check when there is a runaway move in any security or index. It may involve Halting of trade in a security or index for a certain period or Halting of trade in a security or index for the entire trading day.
3. “Miadi Hundi” is very much similar in features of which of the following?
[A] A post dated Cheque
[B] A demand Draft
[C] A usance Bill of Exchange
[D] A Promissory Note
Show Answer
Correct Answer: C [A usance Bill of Exchange]
Notes:
Miadi Hundi is similar to a usance bill of exchange as both involve a time element for payment. A usance bill specifies a future date for payment, while a Miadi Hundi is a negotiable instrument that also allows for deferred payment. Both are used in trade finance and facilitate credit transactions.
4. Who among the following works as head of the “Board for Financial Supervision” in India?
[A] Finance Minister
[B] RBI Governor
[C] Minister of State for Finance
[D] Independent head appointed by President
Show Answer
Correct Answer: B [RBI Governor]
Notes:
The head of the “Board for Financial Supervision” (BFS) in India is the RBI Governor. Established in 1994, the BFS is responsible for overseeing the financial system, ensuring its stability and soundness. The Reserve Bank of India (RBI) plays a crucial role in regulating the banking sector, and the Governor, as the chief executive, leads this board.
5. Directorate of Marketing and Inspection (DMI) is an attached Office of which among the following ministries?
[A] Ministry of Food Processing
[B] Ministry of Commerce
[C] Ministry of Agriculture
[D] Ministry of Finance
Show Answer
Correct Answer: C [Ministry of Agriculture]
Notes:
The Directorate of Marketing and Inspection (DMI) operates under the Department of Agriculture, Cooperation, and Farmers Welfare, Ministry of Agriculture and Farmers Welfare. It was established in 1935 and serves as the regulatory body responsible for promoting and regulating marketing and quality control of agricultural and allied products in the country.
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. The minimum interest rate of a bank below which it is not viable to lend, is known as ____:
[A] Reserved Rate
[B] Base Rate
[C] Marginal Rate
[D] Prime Lending Rate
Show Answer
Correct Answer: B [Base Rate]
Notes:
The correct answer is “Base Rate.” The Base Rate is the minimum interest rate set by a bank for lending to its customers. It serves as a benchmark for various loans and is influenced by factors like the central bank’s policy rate and the bank’s cost of funds. The Base Rate ensures that banks cover their costs and maintain profitability while lending. In many countries, including India, the Base Rate is a crucial component of monetary policy and financial stability.
8. Labour force participation rate reflects__:
[A] The persons who express their willingness to work
[B] The persons who are employed
[C] The persons who are capable to work but not willing to workÂ
[D] None of them
Show Answer
Correct Answer: A [ The persons who express their willingness to work ]
Notes:
Labour force participation rate reflects the persons who express their willingness to work.
9. Infrastructure Finance Company is engaged in business of which of the following?
[A] Debts
[B] Infrastructure loan
[C] Marketing
[D] None of the above
Show Answer
Correct Answer: B [Infrastructure loan]
Notes:
The Infrastructure Finance Company is yet another financial institution engaged in the principal business of infrastructure loan.
10. Which of the following define Deficit Financing?
[A] Difference of total expenditure and income by revenue from all sources
[B] Government spends in excess of revenues so that a budget deficit is incurred which is financed by the borrowings
[C] Difference in borrowing and external and internal resources
[D] Capital expenditure on items of public construction, public enterprises and public borrowings
Show Answer
Correct Answer: B [Government spends in excess of revenues so that a budget deficit is incurred which is financed by the borrowings]
Notes:
Deficit financing is the budgetary situation where expenditure is higher than the revenue. It is a practice adopted for financing the excess expenditure with outside resources. The expenditure revenue gap is financed by either printing of currency or through borrowing.
