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. First state in India to launch a policy to establish Special Agriculture Zones (SAZs):
[A] Uttar Pradesh
[B] Gujarat
[C] Haryana
[D] Uttarakhand
Show Answer
Correct Answer: D [Uttarakhand]
Notes:
Uttarakhand was the first state to set up Special Agricultural Zones (SAZs) in 2011. It was launched on the lines of the Special Economic Zones (SEZs). It encouraged the farmers to develop high-quality crop seeds typical to hilly regions.
2. A number of factors are responsible for poverty in India. Which among the following is not the economic factor contributing to poverty?
[A] Inequalities of Income
[B] Mass illiteracy
[C] Low productivity in Agriculture
[D] Fast Rise in Population
Show Answer
Correct Answer: A [Inequalities of Income]
Notes:
Income inequality is a measure of how unevenly income is distributed throughout a population in a region. Illiteracy, Low Agriculture productivity and faster population growth are the main economic factors contributing to poverty.
3. Rs. 100 notes are printed in which of the following?
[A] The Indian Security Press Nasik
[B] The Security Printing Press Hyderabad
[C] The bank Note Press, Dewas
[D] All1,2&3
Show Answer
Correct Answer: D [All1,2&3]
Notes:
The currency notes in India are printed in 4 presses. Two of them are owned by the Government of India and are located at Nashik and Devas. Two others are owned by the Reserve Bank of India at Mysore and Salboni.
4. In context with the markets, what is dematerialization of securities?
[A] Shortening the time of debt repayment on securities
[B] Electric holding of the shares replacing the paper securities
[C] The price of a shares falling below certain point in the share market
[D] The buyback of shares by a company
Show Answer
Correct Answer: B [Electric holding of the shares replacing the paper securities]
Notes:
Dematerialization of securities refers to the process of converting physical paper certificates of shares into electronic form. This transition allows for easier and faster transactions, reduces the risk of loss or theft, and enhances the efficiency of trading. The practice gained momentum with the advent of electronic trading systems and is now standard in many markets worldwide. For instance, in India, the dematerialization process was facilitated by the introduction of the Depositories Act in 1996, leading to the establishment of depositories like NSDL and CDSL.
5. Which renowned economist proposed the theory of flexible exchange rates?
[A] John Maynard Keynes
[B] Milton Friedman
[C] Adam Smith
[D] Paul Samuelson
Show Answer
Correct Answer: B [Milton Friedman]
Notes:
Milton Friedman, a Noble laureate economist, suggested the theory of flexible exchange rates in 1953. His proposition was based on the autonomous ability of market forces to adjust and maintain an equilibrium level of exchange rates. He argued that central bank’s interference usually results in disequilibrium and may lead to economic crises.
6. The Union Bank of India would like to use an account of State bank of India in Citibank of New York in dollars. For Union Bank of India it is a _________?
[A] NOSTRO account
[B] VOSTRO Account
[C] LORO Account
[D] Forex Account
Show Answer
Correct Answer: C [LORO Account]
Notes:
The correct answer is LORO Account. A LORO account refers to a foreign bank’s account held in another bank, typically used for international transactions. In this case, the Union Bank of India is using an account of the State Bank of India in Citibank, New York, which makes it a LORO account for Union Bank. Trivia: NOSTRO accounts are accounts a bank holds in foreign currency in another bank, while VOSTRO accounts are the opposite, representing foreign banks’ accounts held in the domestic bank.
7. Economic Planning comes under which of the following lists ?
[A] Union List
[B] Concurrent list
[C] State List
[D] None of them
Show Answer
Correct Answer: B [Concurrent list]
Notes:
Economic Planning refers to any plans of economic activity which point to achieve specific social and economic outcomes. It is a subject matter of concurrent list in 7th schedule of Indian constitution.
8. In context with the Credit Card Business in India, a Hot card refers to ______?
[A] Low Interest Credit Card
[B] Unsolicited Credit Card
[C] Lost Credit Card
[D] Highly Promoted Credit Card
Show Answer
Correct Answer: C [Lost Credit Card]
Notes:
A “Hot card” in the context of credit cards in India refers to a “Lost Credit Card.” When a card is reported lost or stolen, it is immediately flagged as hot to prevent unauthorized transactions. This term is crucial for fraud prevention in the banking sector. In India, the Reserve Bank of India (RBI) mandates that banks must have robust systems to handle such cases efficiently.
9. In economy, which among the following can be measured by calculating concentration ratios?
[A] Devlopment
[B] Inflation
[C] Competition
[D] Social Security
Show Answer
Correct Answer: C [Competition]
Notes:
Competition is generally measured by calculating concentration ratios. Concentration ratios indicate whether an industry consists of a few large firms or many small firms. Two of the most commonly used metrics are the Herfindahl Hirschman Index (HHI) and the N-firm concentration ratio.
10. A Banking Ombudsman will not entertain Credit Card complaints which are more than _______old.
[A] 3 months
[B] 6 months
[C] 9months
[D] 12 months
Show Answer
Correct Answer: D [12 months]
Notes:
The correct answer is 1 year (12 months). According to the Banking Ombudsman Scheme, complaints regarding credit cards must be filed within one year from the date of the transaction or the event leading to the complaint. This time limit ensures timely resolution and encourages consumers to report issues promptly. The Banking Ombudsman is a quasi-judicial authority established by the Reserve Bank of India to address customer grievances in the banking sector.
