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. What was the period of India’s First Five Year Plan?
[A] 1951-56
[B] 1961-66
[C] 1969-1974
[D] 1979-1984
Show Answer
Correct Answer: A [1951-56]
Notes:
India’s First Five-year Plan was implemented from the year 1951 till 1956. It mainly focused on the development of primary sector. The Plan was based on the Harrod–Domar model implemented with some modifications.
2. Which among the following is a term for which alternate word “Buyer’s Monopoly” is used?
[A] Oligopoly
[B] Inverse monopoly
[C] Monopsony
[D] Duopoly
Show Answer
Correct Answer: C [Monopsony]
Notes:
Monopsony refers to a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many sellers.
3. Which among the following is the main function of Agricultural Finance Corporation Limited ?
[A] consultancy services in the field of agriculture
[B] social service organization
[C] Agricultural commodities exchange
[D] Agricultural cooperative society
Show Answer
Correct Answer: A [consultancy services in the field of agriculture]
Notes:
Agricultural Finance Corporation Limited (AFC) is a development organization that provides consulting, advisory, and implementation support for agriculture and rural development in India. AFC was established in 1968 by India’s banking industry.
4. On which of the following Date a Bank publishes its balance sheet ?
[A] March 31
[B] April 1
[C] December 31
[D] January 1
Show Answer
Correct Answer: A [March 31]
Notes:
The financial year of India begins from April 1 of a calendar year and ends on March 31 of the next calendar year. This system has been into existence since the British Raj in India. Hence, Banks in India publish their financial statements / balance sheets for March 31st of every year.
5. Who among the following declared the First Industrial Policy in the Post Independence Period?
[A] Jawahar lal Nehru
[B] Syama Prasad Mookerjee
[C] Bayya Suryanarayana Murthy
[D] Rafi Ahmed Kidwai
Show Answer
Correct Answer: B [Syama Prasad Mookerjee]
Notes:
In the year 1948, India’s first Industrial Policy Resolution was adopted. This resolution defined the roles of government in development of industries in independent India. This policy determined that India would follow a mixed economy model having both public and private enterprises.
6. In the abbreviation APEDA, what does P stand for ?
[A] Pisciculture
[B] Products
[C] Processed Food Products
[D] Promotion
Show Answer
Correct Answer: C [Processed Food Products]
Notes:
Agricultural and Processed Food Products Export Development Authority (APEDA) is an apex body under the Ministry of Commerce and Industry, Government of India, responsible for the export promotion of agricultural products. Its headquarters are located in New Delhi. It is a statutory body established under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December, 1985.
7. If a commodity has more number of substitutes, the demand for this commodity will be _______?
[A] more elastic
[B] less elastic
[C] inelastic
[D] perfectly elastic
Show Answer
Correct Answer: A [more elastic]
Notes:
Substitute goods are those goods which can be used in place of each other. Examples of substitute goods are : tea and coffee; ghee and edible oil. In case of substitute goods like tea and coffee, demand for a commodity falls with a fall in the price of other substitute goods.
8. A perfectly competitive firm maximizes its profit when _______?
[A] MR = AR
[B] MR = MC
[C] MC = AC
[D] MC = AR
Show Answer
Correct Answer: B [MR = MC]
Notes:
A perfectly competitive firm maximizes profit by producing at the output level where marginal revenue equals marginal cost. At this point, the firm has no incentive to increase or decrease output. Profit may be positive, zero, or negative in the short run; the equality MR = MC identifies the profit-maximizing quantity, not necessarily a positive profit.
9. Robin Hood effect is related to which of the following?
[A] Income and consumption
[B] Income generation
[C] Income redistribution
[D] Proportional tax
Show Answer
Correct Answer: C [Income redistribution]
Notes:
The Robin Hood effect refers to the concept of income redistribution, where wealth is transferred from the rich to the poor, akin to the legendary figure Robin Hood who “stole from the rich to give to the poor.” This effect highlights the social and economic policies aimed at reducing income inequality. Historically, progressive taxation and social welfare programs are examples of mechanisms that embody this principle.
10. Who published “The Case for Flexible Exchange Rates” in 1953?
[A] John Maynard Keynes
[B] Milton Friedman
[C] Friedrich Lutz
[D] Harry Johnson
Show Answer
Correct Answer: B [Milton Friedman]
Notes:
Milton Friedman published “The Case for Flexible Exchange Rates” in 1953. Friedman’s essay advocated flexible exchange rates to provide monetary policy independence. The paper provided the foundational arguments and theory supporting flexible exchange rate systems over fixed ones. Friedman’s analysis influenced international monetary economics from the 1950s onward.
