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 is the number of members in the Monetary Policy Committee (MPC)?
[A] 4
[B] 5
[C] 6
[D] 7
Show Answer
Correct Answer: C [ 6 ]
Notes:
Monetary Policy Committee (MPC) committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
2. Which best defines Gross Budgetary Support?
[A] Value of gross revenue receipts by the government
[B] Fraction of total expenditure on Central sectors, ministries, and State/UT plans
[C] Value of total plan expenditure
[D] Fraction of expenditure on different Central sectors plans
Show Answer
Correct Answer: B [Fraction of total expenditure on Central sectors, ministries, and State/UT plans]
Notes:
Gross Budgetary Support is the portion of the government budget allocated to central sectors, ministries, departments, and as support to State/UT plans. It forms a part of the total expenditure in India’s Union Budget. GBS funds plan expenditures and is used for the implementation of schemes and programs under different government ministries and departments. It is released annually by the Government of India.
3. Which among the following will not be an entry in the Profit and Loss account of a bank ?
[A] Interest expense on deposits
[B] Interest earned on advances.
[C] Profit/loss on sale of assets
[D] Income from investment banking related activities
Show Answer
Correct Answer: C [Profit/loss on sale of assets]
Notes:
Profit/loss on sale of assets is an entry in the manufacturing company` s P & L account under the heading other income. In banks the other income includes income from distribution of financial products, income from investment banking related activities, treasury gains and other fee incomes
4. What was the nationality of Mahbub ul Haq, one of the pioneers of Human development theory and co-founder of the Human Development Report?
[A] Uk
[B] USA
[C] Pakistan
[D] India
Show Answer
Correct Answer: C [Pakistan]
Notes:
Human Development Report was first launched in 1990 by the Pakistani Economist Mahbub ul Haq and Indian Nobel laureate Amartya Sen.
5. In which year RBI was empowered to regulate money, forex, G-sec and gold related securities market?
[A] 2004
[B] 2006
[C] 2008
[D] 2010
Show Answer
Correct Answer: B [2006]
Notes:
The Reserve Bank of India (RBI) was empowered to regulate the money, foreign exchange, government securities, and gold-related securities markets in 2006. This was part of the amendments made to the Reserve Bank of India Act, 1934, which aimed to enhance the regulatory framework and improve market efficiency. The move was important in promoting financial stability and transparency in India’s financial markets.
6. How many banks are promoting the National Payments Corporation of India (NPCI)?
[A] 6
[B] 8
[C] 10
[D] 12
Show Answer
Correct Answer: C [10]
Notes:
The National Payments Corporation of India is an umbrella organisation for operating retail payments and settlement systems in India. It is promoted by 10 banks.
7. How does currency devaluation help correct a Balance of Payments deficit?
[A] It lowers export prices in foreign currency and raises import prices in home currency
[B] It raises export prices in foreign currency and lowers import prices in home currency
[C] It raises prices of both exports and imports in foreign currency
[D] It lowers prices of both exports and imports in home currency
Show Answer
Correct Answer: A [It lowers export prices in foreign currency and raises import prices in home currency]
Notes:
Devaluation reduces the home currency’s value relative to foreign currencies, making exports cheaper for foreign buyers and imports costlier for domestic consumers. This increases export demand and decreases import demand. Higher exports and reduced imports support an improved current account balance. The Marshall-Lerner condition states devaluation is effective if demand elasticities for exports and imports combined exceed one.
8. Seema Darshan project for border tourism is located in which state?
[A] Jammu & Kashmir
[B] Rajasthan
[C] Gujarat
[D] Sikkim
Show Answer
Correct Answer: C [Gujarat]
Notes:
The Nadabet Seema Darshan Project is in Banaskantha district, Gujarat. It was inaugurated by the Union Home Minister in April 2022. The project replicates the Wagah Border retreat ceremony. Nadabet was significant during the 1971 Indo-Pakistani War. The complex includes a museum, auditorium, and displays military equipment such as tanks and aircraft. The investment for the project was Rs 125 crore.
9. The business transactions done in lieu of which of the following would be called Invisible Trade?
- Consulting
- Income from foreign investment
- Shipping services
- Tourism
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 2 & 3
[C] Only 3 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [ 1, 2, 3 & 4 ]
Notes:
Business transactions that occur with no exchange of tangible goods called Invisible Trade. It involves the transfer of non-tangible goods and/or service, intellectual property and patents. Examples of invisible trade including consulting, income from foreign investment, shipping services and tourism.
10. Which institution currently owns National Housing Bank?
[A] RBI
[B] Ministry of Finance
[C] Government of India
[D] SEBI
Show Answer
Correct Answer: C [Government of India]
Notes:
The National Housing Bank was established in 1988 under the National Housing Bank Act, 1987. It was initially a subsidiary of the Reserve Bank of India. In March 2019, RBI transferred its entire stake to the Government of India. NHB operates under the Ministry of Finance. NHB’s head office is located in New Delhi.
