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. Which authority regulates violations in foreign currency convertible bonds in India?
[A] Securities and Exchange Board of India (SEBI)
[B] Reserve Bank of India (RBI)
[C] Foreign Investment Promotion Board (FIPB)
[D] Bombay Stock Exchange (BSE)
Show Answer
Correct Answer: B [Reserve Bank of India (RBI)]
Notes:
The Reserve Bank of India (RBI) regulates FCCBs under the External Commercial Borrowings (ECB) framework and the Foreign Exchange Management Act (FEMA). RBI issues guidelines on FCCBs, sets minimum maturity periods, and monitors compliance with foreign exchange regulations. SEBI regulates securities markets but does not regulate FCCB violations. FIPB was abolished in 2017. Bombay Stock Exchange acts as an exchange, not a regulator.
2. Which option is not a core principle of progressive taxation?
[A] Ability to pay
[B] Reducing income inequality
[C] Administrative efficiency
[D] Encouraging work and investment incentives
Show Answer
Correct Answer: D [Encouraging work and investment incentives]
Notes:
Progressive taxation is based on the principle of ability to pay, with higher earners paying higher tax rates. It aims to reduce income inequality and can incorporate administrative efficiency. Encouraging work and investment incentives is not a core principle, as progressive taxes may reduce such incentives at higher income levels.
3. Which companies most frequently conduct Initial Public Offerings (IPOs)?
[A] Very small cottage industries
[B] Smaller, younger companies needing capital for expansion
[C] Large privately-owned companies
[D] Public Sector Companies
Show Answer
Correct Answer: B [Smaller, younger companies needing capital for expansion]
Notes:
An Initial Public Offering (IPO) is mainly undertaken by smaller, younger companies to raise equity capital for business expansion. Startups and emerging firms become publicly traded through the IPO process to fund growth. Most IPOs globally in the last decade have been by such companies seeking investments for research, development, and market expansion.
4. Note Printing Press that belongs to RBI is located in?
[A] Nasik
[B] Dewas
[C] Mysore
[D] Chennai
Show Answer
Correct Answer: C [Mysore]
Notes:
The Reserve Bank of India (RBI) has two currency printing presses in India: Mysore, Karnataka and Salboni, West Bengal.
The RBI’s presses are owned by Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a subsidiary of the Reserve Bank. The other two currency presses in India are owned by the government and are located in Nasik and Dewas.
5. During which five year plan The Khadi and Village Industries Commission was established ?
[A] First Five year Plan
[B] Second Five year Plan
[C] Third Five year Plan
[D] Fourth Five Year Plan
Show Answer
Correct Answer: B [Second Five year Plan]
Notes:
The Khadi and Village Industries Commission is a statutory body formed in April 1957 by the Government of India, under the Act of Parliament, ‘Khadi and Village Industries Commission Act of 1956’. It was second five year plan period then.
6. Ad valorem tax is levied on which of the following?
[A] The price of a commodity
[B] The value added to a product
[C] The assessed value of property or transaction
[D] The unit of the commodity
Show Answer
Correct Answer: C [The assessed value of property or transaction]
Notes:
Ad valorem tax is calculated as a percentage of the assessed value of property or transaction. Sales tax, property tax, and import duties are common examples. This tax is proportional to the value, not a fixed amount per unit. The term originates from Latin meaning “according to value.” The assessed value is used to determine the actual tax liability.
7. Which among the following is India’s first Oil refinery?
[A] Guwahati Refinery
[B] Vishakhapatnam Refinery
[C] Digboi Refinery
[D] Barauni Refinery
Show Answer
Correct Answer: C [ Digboi Refinery ]
Notes:
Crude oil was discovered here in late 19th century. Digboi is known as the Oil City of Assam where the first oil well in Asia was drilled. The first refinery was started here as early as 1901. Digboi has the oldest oil Refinery in operation.
8. What do we call the money that is lent for more than one day but less than 15 days in the call money market?
[A] Call Money
[B] Term Money
[C] Notice Money
[D] None of the above
Show Answer
Correct Answer: C [Notice Money]
Notes:
The money that is lent for more than one day and less than 15 days in the call money market is referred to as “Notice Money”. Term Money refers to Money lent for 15 days or more in the Inter Bank Market.
9. Which among the following is not a component of monetary policy in India?
[A] Moral suasion
[B] Public Debt
[C] Repo rate
[D] Credit Rationing
Show Answer
Correct Answer: B [Public Debt]
Notes:
The public debt is how much a country owes to lenders outside of itself. The term “public debt” is often used interchangeably with the term sovereign debt. Public debt usually only refers to national debt.
10. Which of the following is an economic system combining private and state enterprise?
[A] Private economy
[B] Market economy
[C] Mixed economy
[D] Centrally planned economy
Show Answer
Correct Answer: C [Mixed economy]
Notes:
A mixed economy is variously defined as an economic system blending elements of market economies with elements of planned economies, free markets with state interventionism, or private enterprise with public enterprise.