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. The terms such as ‘placement, layering, integration of funds’ are related to which among the following?
[A] Fiscal Management
[B] Financial Stability
[C] Money Laundering
[D] Capital Market Trading
Show Answer
Correct Answer: C [Money Laundering]
Notes:
The process of laundering money generally involves three steps: placement, layering, and integration. Placement refers to injecting the “dirty money” into the legitimate financial system. Layering conceals the source of the money through a series of transactions and bookkeeping tricks. in Integration, the now-laundered money is withdrawn from the legitimate account to be used for desired purposes.
2. Which of the following organizations provides Buffer Stock Financing Facility ?
[A] Reserve Bank of India
[B] Asian Development Bank
[C] International Monetary Fund
[D] World Bank
Show Answer
Correct Answer: C [International Monetary Fund]
Notes:
IMF in 1969 to provide financial assistance to members with a temporary balance of payments need arising from contributions to buffer stocks established under approved international commodity agreements
3. In which year India launched Targeted Public Distribution System ?
[A] 1995
[B] 1996
[C] 1997
[D] 1998
Show Answer
Correct Answer: C [1997]
Notes:
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
4. Which among the following authority decides upon any issues regarding the revision of fee collected as Development Fee from Airports in India?
[A] Airport Authority of India
[B] Airports Economic Regulatory Authority
[C] Ministry of Civil Aviation
[D] Secretary , Ministry of Civil Aviation
Show Answer
Correct Answer: B [Airports Economic Regulatory Authority]
Notes:
The Airports Economic Regulatory Authority (AERA) Bill 2007 ensures that the watchdog monitors performance standards of airports and regulate tariff and other charges for aeronautical services including Airport
5. Approximately what fraction of the world’s oil exports is pumped by the 12-member Organization of the Petroleum Exporting Countries OPEC?
[A] 25%
[B] 45%
[C] 50%
[D] 75%
Show Answer
Correct Answer: B [45%]
Notes:
Organization of the Petroleum Exporting Countries (OPEC) is estimated to account for around 40-45% of total global oil exports currently. In 2021, OPEC’s share of global oil exports was around 43%. As of 2022, it was around 40% of global oil exports.
6. In context with banking and Finance markets, what is Collateralized Borrowing and Lending Obligation (CBLO)”, ?
[A] Its an scheme for exporters who need to fulfill some obligations while seeking its benefit
[B] It’s a process of Reserve bank of India to lend money to the State Governments for short term under certain obligations
[C] It’s a money Market Instrument of Reserve bank of India
[D] It’s a future trading obligation in currency future markets
Show Answer
Correct Answer: C [It’s a money Market Instrument of Reserve bank of India]
Notes:
Collateralized Borrowing and Lending Obligation (CBLO) is a money market instrument introduced by the Reserve Bank of India (RBI) to facilitate borrowing and lending among banks and financial institutions. It allows participants to borrow funds against collateral, typically government securities, for short-term needs. CBLO helps enhance liquidity in the money market and is governed by the Clearing Corporation of India Ltd. (CCIL). It is particularly useful for managing liquidity mismatches and is a key tool in the Indian financial system.
7. Which of the following took birth from the Marrakech Agreement?
[A] World Economic Forum
[B] World Trade organization
[C] OPEC
[D] G-20
Show Answer
Correct Answer: B [World Trade organization]
Notes:
The Marrakesh Agreement, manifested by the Marrakesh Declaration, was an agreement signed in Marrakesh, Morocco, by 123 nations on 15 April 1994, marking the culmination of the 8-year-long Uruguay Round and establishing the World Trade Organization, which officially came into being on 1 January 1995.
8. Which among the following is a correct definition of the “Inflationary gap”?
[A] The difference between total spending at full employment level and total spending above that level.
[B] The difference between the price of a product at a time and price of that product at some different time
[C] Difference between the national expenditure and total expenditure
[D] Difference between Estimated fiscal deficit and actual fiscal deficit
Show Answer
Correct Answer: A [ The difference between total spending at full employment level and total spending above that level. ]
Notes:
The “inflationary gap” refers to the difference between total spending at full employment and total spending above that level. This occurs when demand exceeds the economy’s capacity to produce goods and services, leading to upward pressure on prices. Historically, inflationary gaps can result from excessive government spending or rapid economic growth, often leading to inflation. For example, during the 1970s, many economies experienced inflationary gaps due to oil price shocks and increased demand.
9. The business transactions done in lieu of which of the following would be called Invisible Trade?
- Consulting
- Income from foreign investment
- Shipping services
- Tourism
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 2 & 3
[C] Only 3 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [ 1, 2, 3 & 4 ]
Notes:
Business transactions that occur with no exchange of tangible goods called Invisible Trade. It involves the transfer of non-tangible goods and/or service, intellectual property and patents. Examples of invisible trade including consulting, income from foreign investment, shipping services and tourism.
10. What happens when a foreign bank operating in India does not meet its priority sector targets?
[A] It can deposit amount equivalent to the shortfall in Rural Infrastructure Development Fund
[B] It can deposit amount equivalent to the shortfall in SIDBI
[C] It can deposit amount equivalent to the shortfall in RBI
[D] It can lend amount equivalent to the shortfall to domestic banks
Show Answer
Correct Answer: B [ It can deposit amount equivalent to the shortfall in SIDBI ]
Notes:
Domestic banks having a shortfall in lending to priority sector/ agriculture are allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established in Nabard. In case of foreign banks operating in India, which fail to achieve the priority sector lending target or sub-targets, an amount equivalent to the shortfall is required to be deposited with SIDBI for one year.
