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. If the demand and supply of a commodity increase by an equal absolute amount, what will be the effect on market price?
[A] Increase
[B] Decrease
[C] Remain Stable
[D] First decrease then increase
Show Answer
Correct Answer: C [Remain Stable]
Notes:
When the market is in equilibrium, and when the demand and supply of a commodity increase by an equal absolute amount, the market price will not increase, rather it will remain stable.
2. 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.
3. Which sector contributes most to India’s GDP in FY26?
[A] Primary sector
[B] Secondary sector
[C] Tertiary sector
[D] Quaternary sector
Show Answer
Correct Answer: C [Tertiary sector]
Notes:
The tertiary (services) sector is the largest contributor to India’s GDP in FY26, with a share of 56.4% in Gross Value Added, according to the First Advance Estimates. The services sector grew by 9.1% in FY26.
4. For the first time in India, in which of the following Budgets “basic reforms in the international financial and trading system ” was stressed in India?
[A] 1969
[B] 1980
[C] 1983
[D] 1984
Show Answer
Correct Answer: C [1983]
Notes:
In the 1983 Budget, Finance Minister R. Venkataraman emphasized “basic reforms in the international financial and trading system” for the first time in India. This was a pivotal moment as it marked a shift towards liberalization and modernization of India’s economy, laying the groundwork for future reforms in the 1990s. The 1983 Budget aimed to address economic challenges and improve India’s global trade position.
5. Which among the following is not an important payment and settlement systems in India?
[A] Clearing House Automated Payment System
[B] Real Time Gross Settlement System
[C] National Electronic Clearing System
[D] National Electronic Clearing System
Show Answer
Correct Answer: A [Clearing House Automated Payment System]
Notes:
Clearing House Automated Payment System CHAPS is in UK
6. Which of the following took birth from the Marrakech Agreement?
[A] World Economic Forum
[B] World Trade organization
[C] OPEC
[D] G-20
Show Answer
Correct Answer: B [World Trade organization]
Notes:
The Marrakesh Agreement, manifested by the Marrakesh Declaration, was an agreement signed in Marrakesh, Morocco, by 123 nations on 15 April 1994, marking the culmination of the 8-year-long Uruguay Round and establishing the World Trade Organization, which officially came into being on 1 January 1995.
7. The term “cartelization” is mainly linked with which of the following groups?
[A] Small traders in local markets
[B] Independent firms formally agreeing to cooperate
[C] Individual investors in competitive markets
[D] Government-regulated monopolies
Show Answer
Correct Answer: B [Independent firms formally agreeing to cooperate]
Notes:
Cartelization describes independent firms entering formal agreements to control prices, limit supply, or divide markets. It typically involves actions such as price fixing or market-sharing. Cartelization is prohibited under the Competition Act, 2002 in India. In 2022, India’s Competition Commission imposed penalties on cement companies for cartelization. Cartels are illegal in many countries and are monitored by regulatory bodies to ensure market competition.
8. Which OPEC member is the largest oil producer in 2026?
[A] Venezuela
[B] Iran
[C] Saudi Arabia
[D] Canada
Show Answer
Correct Answer: C [Saudi Arabia]
Notes:
Saudi Arabia is the top oil producer in OPEC, with vast reserves, low extraction costs, and significant spare production capacity managed by Saudi Aramco, granting major influence over global oil markets.
9. Who decides the interest rates on savings bank accounts in India?
[A] Central Government
[B] Banks themselves
[C] Reserve Bank of India
[D] Individual account holders
Show Answer
Correct Answer: B [Banks themselves]
Notes:
Banks in India have the authority to set savings bank account interest rates since May 2011. The Reserve Bank of India deregulated savings deposit rates in October 2011. Each bank decides its own rate, subject to RBI guidelines on calculation and credit of interest. RBI requires interest calculation on a daily basis. Rates are publicly notified by each bank.
10. What is transfer pricing as per Indian taxation context?
[A] Method of tax evasion involving only illicit capital flows
[B] Mechanism for pricing transactions between associated enterprises
[C] Factor causing rise in food prices
[D] Recent cause of Indian banks’ bad loans
Show Answer
Correct Answer: B [Mechanism for pricing transactions between associated enterprises]
Notes:
Transfer pricing refers to pricing of transactions between associated enterprises, specified in Section 92 of the Income Tax Act, 1961. India implemented transfer pricing provisions in 2001 to prevent shifting profits to low-tax jurisdictions by related parties. The law requires use of the arm’s length principle for cross-border and certain domestic transactions between related parties.
