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 is NOT related to the World Trade Organization (WTO)?
[A] Multifiber Agreement
[B] General Agreement on Trade and Services
[C] Multilateral Agreement on Investment
[D] Agreement on Agriculture
Show Answer
Correct Answer: C [ Multilateral Agreement on Investment ]
Notes:
The basic functioning of WTO depends upon: 1. Multifiber Agreement (MFA) 2. Agreement on Agriculture (AoA), Trade Related Investment Measures (TRIMS), Trade Related Intellectual Property Right (TRIPS), General Agreement on Trade and Services (GATS). Multilateral Agreement on Investment is among OECD countries.
2. “Lockout” is term used for a work stoppage in industry for which of the following?
[A] Employees refuse to work
[B] Employer prevents employees from working
[C] Trade unions prevent the employees to work
[D] Employer close the work premises permanently
Show Answer
Correct Answer: B [Employer prevents employees from working]
Notes:
In the context of industry, a lockout is a temporary measure used by employers to prevent workers from entering the workplace. This is typically done in response to a labor dispute or strike, and is intended to protect the employer’s property and ensure the safety of workers and others on the premises. A lockout may be imposed by an employer unilaterally, or it may be agreed upon as part of a collective bargaining agreement with a labor union. During a lockout, workers are not allowed to enter the workplace or perform their duties, and the employer may not provide any work or pay to the affected workers. A lockout can have significant economic and social consequences for both the employer and the affected workers, and is generally considered a last resort in the resolution of labor disputes.
3. Approximately, what fraction of market capitalization of the Bombay Stock Exchange is accounted by the 30 stocks of the BSE SENSEX?
[A] 10%
[B] 20%
[C] 30%
[D] 40%
Show Answer
Correct Answer: B [20%]
Notes:
The correct answer is 30%. The BSE SENSEX, comprising 30 of the largest and most actively traded stocks on the Bombay Stock Exchange, represents a important portion of the market capitalization. As of recent data, these 30 stocks account for approximately 30% of the total market capitalization of the BSE, reflecting their importance in the Indian equity market. The SENSEX is one of the oldest stock market indices in Asia, established in 1986.
4. What is the number of indicators in Multi-dimensional Poverty Index (MPI) ?
[A] 8
[B] 9
[C] 10
[D] 11
Show Answer
Correct Answer: C [10]
Notes:
The Multi-dimensional Poverty Index (MPI) uses three indicators to assess poverty: health, education, and living standards. Each of these dimensions is further broken down into specific indicators, but the MPI itself is structured around these three core areas. This index was developed by the Oxford Poverty and Human Development Initiative (OPHI) and is used to provide a more comprehensive understanding of poverty beyond income alone.
5. Consider the following:
- Reverse Repo Rate
- Cash Reserve Ratio
- Statutory Liquidity Ratio
- Bank Rate
An increase in which among the above could raise the interest rates in the market?
[A] 1
[B] 1 & 2
[C] 1, 2 & 3
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [1, 2, 3 & 4]
Notes:
The Reserve Bank uses various policy levers, such as repo rate, reverse repo rate, cash reserve ratio, statutory liquidity ratio and bank rate, to influence the amount of money in the market. An increase in any one of these could raise the interest rates.
6. Inflation Indexed Bonds is pegged to ___?
[A] WPI
[B] CPI
[C] Both WPI and CPI
[D] None of the above
Show Answer
Correct Answer: A [WPI]
Notes:
Inflation Indexed Bonds (IIBs) are pegged to the Consumer Price Index (CPI). This means their interest payments and principal value adjust based on changes in the CPI, which measures the average change over time in the prices paid by consumers for goods and services. IIBs aim to protect investors from inflation, ensuring that the purchasing power of their returns is maintained. In India, the CPI is the primary measure for these bonds, while the Wholesale Price Index (WPI) measures price changes at the wholesale level and is not used for IIBs.
7. With reference to the business, what is working capital?
[A] The investment made in the business
[B] Fixed assets
[C] Circulating assets- stocks, cash and debts owed to the business
[D] Amount spent on machinery or for building up stock
Show Answer
Correct Answer: C [ Circulating assets- stocks, cash and debts owed to the business ]
Notes:
Current Assets minus Current Liabilities is known as working capital.
8. Which among the following is a nearest term to Pay Order?
[A] Bank Draft
[B] Banker’s Cheque
[C] Bill of Exchange
[D] Promissory Note
Show Answer
Correct Answer: B [ Banker’s Cheque ]
Notes:
A Pay Order is similar to a Banker’s Cheque, as both are instruments issued by banks guaranteeing payment to a specified payee. Unlike a Bank Draft, which can be issued by individuals, a Banker’s Cheque is always issued by the bank itself. Both are considered safer than cash and are used for transactions where the payee requires guaranteed funds.
9. Consider the following statements:
- Stock Exchanges and Future Markets are placed under the union list of Indian Constitution
- Bombay Cotton Trade Association was the first organized futures market in India
Which of the above statements is/are correct?
[A] 1 Only
[B] 2 Only
[C] Both 1 & 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: C [ Both 1 & 2 ]
Notes:
Both are correct statements
First statement is correct because stock exchanges and future markets both are placed under the union list of Indian Constitution. Second statement is also correct because the first organized futures market was established in 1875, under the name of ‘Bombay Cotton Trade Association’ to trade in cotton derivative contracts.
10. The terms IBAN, BBAN, SEPA and SWIFT are associated with:
[A] International Banking
[B] Disaster Management
[C] Nuclear Waste Management
[D] International Maritime Boundaries
Show Answer
Correct Answer: A [ International Banking ]
Notes:
SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. SEPA stands for Single Euro Payment Are. The aim of SEPA is to ensure that payments within Europe take place as simply and effectively as those within a single country. IBAN stands for the International Bank Account Number is a unique identifier helping banks process payments from person to person automatically. The IBAN contains all necessary information of the owner if a bank account such as the account number, bank and branch information and country code. BBAN is short for Basic Bank Account Number. It represents a country-specific bank account number.
