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 are called “Breton Wood Twins”?
[A] IBRD & IMF
[B] IDA & IFC
[C] IDA & MIGA
[D] IMF & IDA
Show Answer
Correct Answer: A [IBRD & IMF]
Notes:
The planners at Breton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group
2. Which among the following body in India requires to protect the interests of consumers against anti-competitive practices of all market entities?
[A] National Consumer Forum
[B] Competition Commission of India
[C] National Consumer Disputes Redressal Commission
[D] Central Vigilance Commission
Show Answer
Correct Answer: B [Competition Commission of India]
Notes:
The Competition Commission of India (CCI) was set up to replace the anachronistic Monopolies and Restrictive Trade Practices Commission (MRTPC). It was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. It has one chairman and six members. It is the youngest and the only cross-sector regulator in India.
3. What is the main reason companies issue sweat equity shares?
[A] To provide more profits to retail investors
[B] To reduce cash flow requirements for compensation
[C] To retain and attract top talent via ownership stakes
[D] To save taxes on employee compensation
Show Answer
Correct Answer: C [To retain and attract top talent via ownership stakes]
Notes:
Sweat equity shares are offered to employees or directors for their work or know-how, as per Section 54 of the Companies Act, 2013. Such shares are issued to retain and attract skilled personnel by granting ownership stakes without immediate cash outflow. SEBI regulates sweat equity issuance for listed companies. Companies often use sweat equity during initial stages to incentivize and retain employees without cash expenditure.
4. Where can popular tourist attractions such as Chatham Saw Mill, Wandoor Beach, Mount Harriet and Limestone Caves be found?
[A] Goa
[B] Andaman and Nicobar Islands
[C] Lakshadweep
[D] Tamil Nadu
Show Answer
Correct Answer: B [Andaman and Nicobar Islands]
Notes:
The tourist attractions mentioned, including the Chatham Saw Mill, which is one of the oldest and largest saw mills in Asia, and the scenic Wandoor Beach, along with Mount Harriet, the third highest peak in the Andamans offering stunning views, and the intrigue-filled Limestone Caves are all located in the beautiful Andaman and Nicobar Islands. This Indian Union Territory in the Bay of Bengal is rich in natural beauty and historical significance.
5. With reference to the terms Deflation and Disinflation, which among the following statements is / are correct?
- Deflation is negative inflation, Disinflation is negative inflation growth
- Deflation increases the real value of money, Disinflation has no impact on value of money
Select the correct option from the codes given below:
[A] Only 1 is correct
[B] Only 2 is correct
[C] Both 1 & 2 are correct
[D] Neither 1 nor 2 is correct
Show Answer
Correct Answer: A [ Only 1 is correct ]
Notes:
In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). This should not be confused with disinflation, a slow-down in the inflation rate (i.e. when inflation declines to lower levels) Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time.
6. Which of the following is the least preferred option by government for deficit financing?
[A] Printing of currency notes
[B] Loans from World bank and IMF
[C] Disinvestment of government holdings
[D] Open sale of government securities and bonds in market
Show Answer
Correct Answer: A [ Printing of currency notes ]
Notes:
Printing of currency creates a situation where too much money chases few goods and thus leads to condition of inflation. So; it is the last preferred option for government.
7. Which of the following is the correct definition of ‘Effective Revenue Deficit’?
[A] difference between revenue deficit and grants for creation of capital assets
[B] difference between revenue deficit and interest liabilities of the Government
[C] difference between fiscal receipt and net expenditure of the government
[D] difference between fiscal receipt and money spent on various social services
Show Answer
Correct Answer: A [ difference between revenue deficit and grants for creation of capital assets ]
Notes:
Effective Revenue Deficit is the difference between revenue deficit and grants for creation of capital assets.
8. 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).
9. The Financial Action Task Force (FATF) mainly combats which activity?
[A] Climate change financing
[B] Money laundering and terrorist financing
[C] Development aid management
[D] Quantum computing in finance
Show Answer
Correct Answer: B [Money laundering and terrorist financing]
Notes:
The Financial Action Task Force is an intergovernmental body established in 1989 at the G7 Summit in Paris. FATF sets international standards to prevent money laundering and terrorist financing. The organization developed 40 Recommendations as technical standards. It conducts mutual evaluations of members. FATF monitors risks and trends in global money laundering and terrorist financing.
10. Per Capita Income of a country is obtained by dividing National Income by which of the following?
[A] Total working population
[B] Total population of the country
[C] Area of the country
[D] Volume of the capital used
Show Answer
Correct Answer: B [ Total population of the country ]
Notes:
Per capita income or average income measures the average income earned per person in a given area in a specified year. It is calculated by dividing the area’s total income by its total population.
