Indian Economy MCQs

Notes:
Kudankulam Nuclear Power Plant in Tamil Nadu remains India’s largest by capacity, with Units 1 and 2 each at 1,000 MWe (total 2,000 MW operational). While India’s total nuclear capacity is now around 8,780-8,880 MW across 24-25 reactors as of early 2026, no other station exceeds Kudankulam’s installed capacity; Units 3 and 4 (1,000 MWe each) are under construction for 2026 completion, further expanding it to 4,000 MW. Tarapur (1,400 MW), Kakrapar (~1,400 MW with recent 700 MWe units), and Kaiga (880 MW) are smaller. 

Notes:
Adam smith is considered as father of Modern Economics. In his book “The nature & causes of wealth of the Nation’s 1776, he has described economics as science of wealth. According to him economy is the study of wealth only and it deals with its production and consumption. Only material goods which are scarce and useful are wealth.

Notes:
The Balance of International payments or Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
The three main components of BoP are Current Account, Capital Account and Official Reserve Transactions

Notes:
Income tax was introduced in India in 1860 by Sir James Wilson. Income tax rates in India increase with higher income slabs as per the Finance Act. The income tax structure is defined in the Income Tax Act, 1961. Income tax collection is administered by the Central Board of Direct Taxes. A progressive tax system is implemented where tax liability rises as an individual’s income increases, with no fixed single rate for all.

Notes:
Romesh Chunder Dutt was an Indian civil servant and a famous economic historian of the nineteenth century. He entered the Indian Civil Service in the year 1871. He is also called as the Pioneer of Economic Nationalism.

Notes:
The fiscal deficit may be decomposed into primary deficit and interest payment. The primary deficit is obtained by deducting interest payments from the fiscal deficit. Thus, primary deficit is equal to fiscal deficit less interest payments. It indicates the real position of the government finances as it excludes the interest burden of the loans taken in the past.

Notes:
M3 consists of currency with the public, demand deposits, and time deposits with banks. The Reserve Bank of India identifies M3 as broad money. Since 1977, the RBI uses M3 as the main monetary aggregate. The RBI publishes weekly data on M3 in its statistical supplements as of 2023.

Notes:
Anhydrous ammonia contains about 82% nitrogen by weight. It is a gaseous fertilizer used primarily in large-scale commercial agriculture. It was first used as a fertilizer in the early twentieth century. Anhydrous ammonia must be stored under high pressure or at low temperature to remain in liquid form for application. It is injected into the soil to minimize loss through volatilization.

Notes:
The principle of reciprocity in the WTO framework means that when one member lowers trade barriers, other members are expected to do the same in return. This mutual concession promotes fair trade practices and encourages countries to engage in negotiations. Reciprocity is fundamental to the WTO’s goal of reducing trade barriers globally, fostering a more open and equitable trading system.

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.