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. The secondary market deals in which of the following?
[A] Only newly issued securities
[B] Only government bonds and certificates of deposit
[C] Securities already issued and previously traded
[D] Only short-term trading instruments
Show Answer
Correct Answer: C [Securities already issued and previously traded]
Notes:
The secondary market is for trading securities that have already been issued. Transactions involve investors buying and selling among themselves. The issuing company does not receive any funds from these trades. Major examples include stock exchanges like NYSE and NASDAQ. The market provides liquidity and facilitates price discovery for already existing securities including shares, bonds, and debentures.
2. If people prefer to hold a larger share of their wealth as currency rather than keeping it in bank deposits, what is the likely impact on the money multiplier and broad money supply?
[A] The money multiplier will increase and broad money supply will rise
[B] The money multiplier will decrease and broad money supply will fall
[C] The money multiplier will remain unchanged and broad money supply will stay the same
[D] Broad money supply will rise immediately because currency in circulation increases
Show Answer
Correct Answer: B [The money multiplier will decrease and broad money supply will fall]
Notes:
When people shift from bank deposits to currency, banks receive fewer deposits to lend further. This lowers the currency-deposit relationship in the banking system, reduces credit creation, and weakens the money multiplier. As a result, broad money supply falls. Currency held by the public rises, but the larger effect is a smaller deposit base and less banking-sector money creation. Therefore, the correct answer is option 2.
3. UDYAMI helpline is for?
[A] Large capital Industries
[B] Female entrepreneur
[C] Farmers introducing technology in Farming
[D] Micro, small & medium size enterprises
Show Answer
Correct Answer: D [Micro, small & medium size enterprises]
Notes:
Udyami Helpline with number 1800 180 6763 is a Call Centre of Ministry of Micro, Small and Medium Enterprises (MSME), Government of India. It was launched in 2010 to work as a single point facility for MSMEs needing different kinds of information and accessibility of Banks and other MSME-related organisations.
4. How does the Indian government provide food subsidy?
[A] By fixing Central Issue Prices
[B] Through Public Distribution System
[C] By funding Food Corporation of India
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Food subsidy in India is provided through multiple channels. The government fixes Central Issue Prices for subsidized foodgrains, supplies them through the Public Distribution System, and also supports the Food Corporation of India for procurement, storage, and distribution. Hence, all three statements are correct.
5. Who published the Global Competitiveness Report?
[A] World Bank
[B] International Monetary Fund
[C] World Economic Forum
[D] World Trade Organization
Show Answer
Correct Answer: C [World Economic Forum]
Notes:
The Global Competitiveness Report was published by the World Economic Forum. The series began in 1979, and the report evolved over time to present the Global Competitiveness Index and country rankings. Its 2020 edition was issued as a special edition focused on recovery and transformation, and it remained part of the World Economic Forum’s publications. Hence, the correct answer is World Economic Forum.
6. Which among the following is the guiding principle of the concept of most favoured nations?
[A] that every nation has a preferred trading partner
[B] that nations should cooperate with other nations that cooperate with them
[C] non-discrimination among trading partners
[D] that each nation should be able to decide what other nations it prefers as trading partners
Show Answer
Correct Answer: C [ non-discrimination among trading partners ]
Notes:
The guiding principle of the Most Favoured Nation (MFN) concept is “non-discrimination among trading partners.” This principle, established in international trade agreements, ensures that any favorable trading terms offered by one country to another must be extended to all other trading partners. This concept is a cornerstone of the World Trade Organization (WTO) framework, promoting equality and preventing trade discrimination. The MFN principle aims to create a level playing field in international trade, fostering global economic cooperation.
7. World Tourism Day is celebrated on which of the following days?
[A] September 12
[B] September 25
[C] September 29
[D] September 27
Show Answer
Correct Answer: D [September 27]
Notes:
Since 1980, the United Nations World Tourism Organization has celebrated World Tourism Day as international observances on September 27. This date was chosen as on that day in 1970, the Statutes of the UNWTO were adopted.
8. To which of the following sectors was the largest allocation given in the Seventh Five-Year Plan? (UPSC Prelims 1987)
[A] Agriculture
[B] Transport
[C] Education
[D] Energy
Show Answer
Correct Answer: D [Energy]
Notes:
In the Seventh Five-Year Plan (1985–1990), the largest share of public sector outlay was allocated to the Energy sector, at about 28.2%. Agriculture and allied activities received a much smaller share, about 5.8%. Hence, Energy was the sector with the highest allocation.
9. What does marginal utility in economics signify?
[A] Small utility
[B] Additional utility
[C] Minimum utility
[D] Satisfied utility
Show Answer
Correct Answer: B [Additional utility]
Notes:
Marginal utility refers to the extra satisfaction or benefit gained from consuming one additional unit of a good or service. In other words, it measures the added utility derived from the next unit consumed.
10. Which factor is NOT a main reason India is a developing country in 2026?
[A] Rural population depends on agriculture
[B] Lack of rapid industrialization
[C] Scarcity of capital
[D] High per capita income
Show Answer
Correct Answer: D [High per capita income]
Notes:
India is still classified as developing due to low per capita income. Agriculture dependence, limited industrialization, and scarce capital are other reasons. Despite rapid growth, India’s per capita income remains well below high-income thresholds, keeping it in the developing country category per World Bank standards.
