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 is India’s largest nuclear power plant by installed capacity?
[A] Kaiga Nuclear Power Plant
[B] Kudankulam Nuclear Power Plant
[C] Kakrapar Nuclear Power Plant
[D] Tarapur Nuclear Power Station
Show Answer
Correct Answer: B [Kudankulam Nuclear Power Plant]
Notes:
Kudankulam Nuclear Power Plant in Tamil Nadu remains India’s largest by capacity, with Units 1 and 2 each at 1,000 MWe (total 2,000 MW operational). While India’s total nuclear capacity is now around 8,780-8,880 MW across 24-25 reactors as of early 2026, no other station exceeds Kudankulam’s installed capacity; Units 3 and 4 (1,000 MWe each) are under construction for 2026 completion, further expanding it to 4,000 MW. Tarapur (1,400 MW), Kakrapar (~1,400 MW with recent 700 MWe units), and Kaiga (880 MW) are smaller.
2. Whose approval is enough to withdraw money from the Consolidated Fund of India?
[A] Only President
[B] Both Parliament and President
[C] Only Parliament
[D] Either Parliament or President
Show Answer
Correct Answer: C [Only Parliament]
Notes:
The Consolidated Fund of India was constituted under Article 266(1) of the Indian Constitution in 1950. Only after the enactment of an Appropriation Act by Parliament can funds be withdrawn from this Fund. The President of India cannot authorize withdrawal without parliamentary sanction. Expenditure from the Consolidated Fund includes government salaries, pensions, and all government-managed programs, all subject to prior parliamentary approval as stipulated in Article 114.
3. When are stock market circuit breakers triggered?
[A] On special exchange-designated days
[B] When a new share trades for first time
[C] When trading volume of a stock exceeds a threshold
[D] When the S&P 500 Index falls by a set percentage
Show Answer
Correct Answer: D [When the S&P 500 Index falls by a set percentage]
Notes:
Market-wide circuit breakers in the United States are triggered if the S&P 500 Index falls by 7%, 13%, or 20% from the previous day’s closing value. Level 1 and Level 2 trigger 15-minute trading halts if before 3:25 p.m. A Level 3 decline causes trading to be halted for the remainder of the day. Circuit breakers were introduced in 1988 after the 1987 Black Monday crash.
4. Which Indian state is the top producer of large cardamom?
[A] Kerala
[B] Sikkim
[C] Assam
[D] Gujarat
Show Answer
Correct Answer: B [Sikkim]
Notes:
Sikkim produces about 80% of India’s large cardamom. It is grown mainly in the Himalayan region of Sikkim due to the favorable climate and altitude. Sikkim’s production reached approximately 5.591 thousand tonnes in 2025. The government initiative “Mero Alaichi, Mero Dhan” supports cardamom cultivation in Sikkim. Assam, Gujarat, and Kerala do not match Sikkim’s output in this crop.
5. What is the main objective of setting up fair price shops?
[A] To demote speculation and hoarding
[B] To incentivise the trading of essential commodities
[C] To eliminate the monopoly of the traders and speculators
[D] To make the essential commodities available to the weaker sections of the society
Show Answer
Correct Answer: D [To make the essential commodities available to the weaker sections of the society]
Notes:
Fair price shops form part of India’s Public Distribution System since 1947. They provide essential commodities such as grains, sugar, and kerosene to people below the poverty line at subsidized prices. The Targeted Public Distribution System was introduced in 1997 to further improve the food security for economically vulnerable sections. Only ration cardholders can purchase from these shops as per government rules.
6. Which country is the world’s largest exporter of tea in 2025?
[A] China
[B] India
[C] Sri Lanka
[D] Kenya
Show Answer
Correct Answer: A [China]
Notes:
In 2024–25, China led global tea exports by value with $1,739 million, holding nearly 45% share and surpassing Kenya and Sri Lanka. While Kenya leads in black tea by volume, China remains the largest exporter overall based on latest official data.
7. Consider the following statements regarding Cost Push Inflation:
- Cost Push Inflation is a function of the costs such as wages, rent, interest rates etc.
- Cost Push Inflation can be controlled easily in comparison to Demand Pull Inflation.
- The purchasing power of Rupee decreases in case of Cost Push Inflation.
- Cost Push Inflation often results from supply shocks like oil price increases.
Which of the above statements is / are correct?
[A] 1, 3 and 4
[B] Only 1
[C] 1 and 2
[D] 2 and 3
Show Answer
Correct Answer: A [1, 3 and 4]
Notes:
Cost-push inflation arises from increases in production costs like wages and raw materials (statement 1). It cannot be controlled easily compared to demand-pull inflation (statement 2 is incorrect). Inflation reduces the purchasing power of money (statement 3). Supply shocks, e.g., rising oil prices, often trigger cost-push inflation (statement 4). Thus, 1, 3, and 4 are correct.
8. Which of the following Acts mandates the Ministry of Finance to present reports on budgetary trends to Parliament?
- Constitution of India
- Finance Acts of every year
- Fiscal Responsibility and Budget Management Act, 2003
- Order of President of India
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 3
[C] Only 2 & 3
[D] 1, 2 & 4
Show Answer
Correct Answer: B [Only 3]
Notes:
The Fiscal Responsibility and Budget Management Act, 2003 specifically mandates, under Section 7(1), periodic reporting by the Finance Ministry to Parliament on budget receipts and expenditures. The Constitution of India and the Finance Acts do not impose this requirement, nor does an Order of President make such reporting statutory for the Ministry of Finance.
9. What is the main difference between FDI and FII?
[A] FII is more stable than FDI
[B] FDI targets only infrastructure sectors
[C] FII needs stricter regulatory approval
[D] FDI is long-term in assets; FII is short-term in securities
Show Answer
Correct Answer: D [FDI is long-term in assets; FII is short-term in securities]
Notes:
Foreign Direct Investment (FDI) involves long-term investment in a business’s physical assets, often bringing technology and management expertise. Foreign Institutional Investment (FII) involves short-term capital investment in financial securities like stocks and bonds without management control. FDI investors establish a lasting presence, while FIIs are passive shareholders without operational involvement. FDI is typically more stable compared to FII, which can exit markets quickly.
10. The term OTDS is mainly linked to which WTO negotiation area?
[A] Intellectual Property & Geographical Indications
[B] Non-Agricultural Market Access (NAMA)
[C] Agriculture
[D] Services Trade
Show Answer
Correct Answer: C [Agriculture]
Notes:
Overall Trade-Distorting Domestic Support (OTDS) is defined in the context of WTO agriculture negotiations. OTDS includes Aggregate Measure of Support (AMS), Blue Box payments, and de minimis support. OTDS commitments were discussed during the Doha Round agriculture talks beginning in 2001. WTO ministerial conferences periodically review and negotiate OTDS reduction by member countries. India and other countries have submitted proposals focusing on agriculture OTDS at these negotiations.
