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 among the following is a most suitable example of double counting in national income ?
[A] Wages of bus and train drivers
[B] Cotton output and cotton cloth output
[C] Electricity output and water output
[D] Tax receipts and earnings of inland revenue officials
Show Answer
Correct Answer: B [Cotton output and cotton cloth output]
Notes:
While estimating the national income, the problem of double counting occurs when the value of some goods and services are counted more than once. Cotton output and cotton cloth output both the raw material and the final result are counted.
2. With reference to the Union Budget of India, the expenditure classification follows which of the following broad categories?
[A] Revenue expenditure and Capital expenditure
[B] Plan expenditure and Non-Plan expenditure
[C] Developmental expenditure and Non-developmental expenditure
[D] Borrowed expenditure and Tax-funded expenditure
Show Answer
Correct Answer: A [Revenue expenditure and Capital expenditure]
Notes:
From Budget 2017-18 onward, the Government of India did away with the Plan and Non-Plan classification of expenditure. The budget now uses the more standard and meaningful classification into Revenue expenditure and Capital expenditure, which better reflects the nature of government spending.
3. Countervailing duty is imposed on which of the following?
[A] Imported goods benefiting from subsidies provided by the exporting country
[B] Exported goods
[C] Imported goods on which import subsidy is applicable
[D] Exported goods on which export subsidy is applicable
Show Answer
Correct Answer: A [Imported goods benefiting from subsidies provided by the exporting country]
Notes:
Countervailing duty is a trade remedy levied on imported goods when those goods receive subsidies in the exporting country. The purpose is to neutralize the unfair price advantage created by the subsidy and protect domestic producers from injury. Such duties are generally used after an investigation confirms the presence of subsidization and its impact on competing domestic industry. Therefore, the duty is imposed on subsidized imports, not on exports.
4. Which RBI action best curbs excess banking system liquidity?
[A] Increases the Cash Reserve Ratio (CRR)
[B] Decreases the repo rate
[C] Purchases government securities through Open Market Operations
[D] Reduces the Statutory Liquidity Ratio (SLR)
Show Answer
Correct Answer: A [Increases the Cash Reserve Ratio (CRR)]
Notes:
The RBI increases the Cash Reserve Ratio (CRR) to absorb surplus liquidity from banks. In August 2023, RBI required banks to maintain a 10% incremental CRR on certain deposit increases. Higher CRR compels banks to hold more deposits as reserves with RBI, reducing their capacity to lend and thus controlling excess liquidity in the financial system.
5. Who among the following are the beneficiaries of Ways and Means Advances (WMA) facility of Reserve Bank of India?
[A] Commercial Banks
[B] Regional Rural banks
[C] State Governments
[D] Authorized Dealers of Foreign Exchanges
Show Answer
Correct Answer: C [State Governments]
Notes:
The Reserve Bank of India (RBI) provides temporary loan facilities to the central and state governments. This loan facility is called Ways and Means Advances (WMA).
6. Which organization publishes The Global Enabling Trade Report?
[A] World Bank
[B] World Trade Organization
[C] World Economic Forum
[D] UNCTAD
Show Answer
Correct Answer: C [World Economic Forum]
Notes:
The Global Enabling Trade Report is published by the World Economic Forum. The first edition appeared in 2008. The report assesses the policies, institutions, and services facilitating trade globally. The World Economic Forum is headquartered in Geneva, Switzerland, and was established in 1971. The report includes the Enabling Trade Index, which ranks countries based on their trade enabling factors.
7. What is vertical farming?
[A] Growing unrelated crops together in the same tract of land
[B] Growing related crops together in the same tract of land
[C] Cultivating crops inside multi-storey buildings
[D] Using aquaculture, sericulture, pisciculture, and bee culture together
Show Answer
Correct Answer: C [Cultivating crops inside multi-storey buildings]
Notes:
Vertical farming uses multi-storey buildings to grow crops in urban environments. The method utilizes hydroponics or aeroponics. This allows for agriculture independent from soil and weather conditions. The technique optimizes space and supports year-round production. Commercial vertical farms have been established in countries such as Japan, Singapore, and the United States since the early 2000s.
8. What is the objective of the Central Government in creating the “Non-lapsable Central Pool of Resources”?
[A] To provide development funding in Naxalite affected areas
[B] To provide additional development grant to most backward 200 districts all over country
[C] To provide time to time fiscal stimulation to the economy
[D] To provide development funding to North East and Sikkim
Show Answer
Correct Answer: D [ To provide development funding to North East and Sikkim ]
Notes:
NLCPR The broad objective of the Non-Lapsable Central Pool of Resources (NLCPR) is to ensure speedy development of infrastructure in the North Eastern Region and Sikkim by increasing the flow of budgetary financing for specific viable infrastructure projects/schemes in the region. The provision is for funding these projects. The outlay includes a provision of Rs. 50 crore for funding special projects/schemes for the economic development of the Karbi Anglong Autonomous Territorial Council (KAATC) area in Assam.
9. Which organization publishes the Inclusive Growth and Development Report?
[A] World Bank
[B] International Monetary Fund
[C] World Economic Forum
[D] Organisation for Economic Cooperation and Development
Show Answer
Correct Answer: C [World Economic Forum]
Notes:
The World Economic Forum publishes the Inclusive Growth and Development Report. The Inclusive Development Index was introduced with this report in 2017. The report evaluates economies using parameters like education, employment, labor compensation, and social protection. The World Economic Forum is headquartered in Geneva, Switzerland, and began the series under its System Initiative on Economic Growth and Social Inclusion.
10. What is the main goal of Antyodaya Anna Yojana (AAY) scheme?
[A] Provide employment to urban workers
[B] Ensure food security for the poorest
[C] Subsidize inputs for marginal farmers
[D] Distribute cash to BPL households
Show Answer
Correct Answer: B [Ensure food security for the poorest]
Notes:
The Antyodaya Anna Yojana was launched in December 2000 by the Government of India. Its objective is to provide food security to the poorest of the poor identified under the Targeted Public Distribution System. Eligible families receive 35 kg of food grains per month at highly subsidized prices—rice at ₹3/kg and wheat at ₹2/kg. This scheme operates nationwide.
