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 of the following industries is the not covered in the Index of Eight Core Industries?
[A] Electricity
[B] Crude Oil
[C] Natural Gas
[D] Pharmaceuticals
Show Answer
Correct Answer: D [Pharmaceuticals]
Notes:
The industries covered in the Index of Eight Core include Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
2. Which among the following organizations calculates and publishes LIBOR (London Interbank Offered Rate)?
[A] Bank of England
[B] Thomson Reuters
[C] European Banking Federation
[D] European Central Bank
Show Answer
Correct Answer: B [Thomson Reuters]
Notes:
The London Inter-bank Offered Rate (LIBOR) is the average interest-rate calculated from estimates submitted by the leading banks in London. The rates are calculated and published by Thomson Reuters Corporation.
3. Which among the following regulates housing finance companies in India ?
[A] RBI
[B] National Housing Bank
[C] Housing Development Finance Corporation
[D] Housing and Development Boards
Show Answer
Correct Answer: B [National Housing Bank]
Notes:
The National Housing Bank (NHB) is the regulator and supervisor of housing finance companies (HFCs) in India. The NHB was established in 1988 and operates as a subsidiary of the Reserve Bank of India. The NHB’s goal is to promote housing finance institutions at the ground and regional levels.
4. If a commodity has more number of substitutes, the demand for this commodity will be _______?
[A] more elastic
[B] less elastic
[C] inelastic
[D] perfectly elastic
Show Answer
Correct Answer: A [more elastic]
Notes:
Substitute goods are those goods which can be used in place of each other. Examples of substitute goods are : tea and coffee; ghee and edible oil. In case of substitute goods like tea and coffee, demand for a commodity falls with a fall in the price of other substitute goods.
5. Robin Hood effect is related to which of the following?
[A] Income and consumption
[B] Income generation
[C] Income redistribution
[D] Proportional tax
Show Answer
Correct Answer: C [Income redistribution]
Notes:
The Robin Hood effect refers to the concept of income redistribution, where wealth is transferred from the rich to the poor, akin to the legendary figure Robin Hood who “stole from the rich to give to the poor.” This effect highlights the social and economic policies aimed at reducing income inequality. Historically, progressive taxation and social welfare programs are examples of mechanisms that embody this principle.
6. Narsimham Committee Report 1991 was related to which of the following ?
[A] Agriculture Reforms
[B] Trade Reforms
[C] Tax Reforms
[D] Financial Sector reforms
Show Answer
Correct Answer: D [Financial Sector reforms]
Notes:
In 1991 The Reserve Bank of India had proposed the committee chaired by M. Narasimham, former RBI Governor to review the Financial System and aspects relating to the Structure, Organization, Procedures and Functioning of the financial system. Committee submitted two reports, in 1992 and 1998, which laid significant thrust on enhancing the efficiency and viability of the banking sector. The Narasimham Committee laid the foundation for the reformation of the Indian banking sector.
7. Approval of which among the following is needed to draw funds from Consolidated Fund of India?
[A] President
[B] Parliament
[C] Council of Ministers
[D] All the above
Show Answer
Correct Answer: B [Parliament]
Notes:
The Consolidated Fund of India was created under Article 266 of the Indian Constitution. The government meets all its expenditure from this fund and it needs parliamentary approval to withdraw money from this fund.
8. What is the primary motive driving the countries to involuntarily depreciate their currencies?
[A] To maintain dominance in export markets
[B] To bolster capital inflows
[C] To curb inflation
[D] All of the above
Show Answer
Correct Answer: A [To maintain dominance in export markets]
Notes:
Countries often resort to competitive devaluation of their currencies, primarily to maintain their hold in export markets. A weaker currency makes a country’s exports cheaper and thus more attractive for international buyers. This, in turn, can lead to an increase in export volumes, and higher revenues from exports. While the other options – boosting capital inflows and checking inflation – might be indirect benefits, they are typically not the main drivers of currency depreciation.
9. Which committee is responsible for identifying out the criteria for the urban poor or urban BPL families?
[A] Hashim Committee
[B] Naresh Chandra Committee
[C] Sachar Committee
[D] Bhure Lal Committee
Show Answer
Correct Answer: A [ Hashim Committee ]
Notes:
Hashim Committee gave the criteria for identifying the urban poor or urban BPL families. The committee based its identification criteria on the parameters that were mapped by the Socio-Economic Caste Census (SECC).
10. World Investment Report is published by:
[A] International Monetary Fund
[B] World Economic Forum
[C] Organisation for Economic Co-operation and Development (OECD)
[D] United Nations Conference on Trade and Development (UNCTAD)
Show Answer
Correct Answer: D [ United Nations Conference on Trade and Development (UNCTAD) ]
Notes:
The World Investment Report has been published annually since 1991 by the United Nations Conference on Trade and Development (UNCTAD). The report focuses on trends in foreign direct investment (FDI) worldwide, at the regional and country levels and emerging measures to improve its contribution.
