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. Planning Commission of India was established by which among the following means?
[A] Act of Parliament
[B] Presidential Order
[C] Presidential Ordinance
[D] Cabinet Resolution
Show Answer
Correct Answer: D [Cabinet Resolution]
Notes:
The Planning Commission was set up by a Cabinet Resolution of the Government of India in March 1950. Jawaharlal Nehru was the first Chairman of the Planning Commission. It had the responsibility to formulate plans to utilize the available resources.
2. An autonomous increase in expenditure should result in an increase in a country’s real GNP only if ?
[A] The country’s balance of trade is negative
[B] The country’s economy is working under conditions of less than full employment
[C] It is government expenditure
[D] The multiplier is at least 1.5
Show Answer
Correct Answer: B [The country’s economy is working under conditions of less than full employment]
Notes:
When the economy is working under conditions of less than full employment, the GDP gap is positive and the economy operates at less than potential. At this point, an increase in expenditure would result in an increase in a country’s real GNP.
3. World Bank Headquarters located at:
[A] Switzerland
[B] Washington DC
[C] New York
[D] Paris
Show Answer
Correct Answer: B [Washington DC]
Notes:
World Bank is one of five institutions created at the Breton Woods Conference in 1944. World Bank is part of the United Nations system, but its governance structure is different. World Bank’s headquarter is situated at Washington DC.
4. Which among the following is a suitable term for the state of economy in which economic activity is slowing down but wages and prices continue to rise ?
[A] Inflation
[B] Deflation
[C] Skweflation
[D] Stagflation
Show Answer
Correct Answer: D [Stagflation]
Notes:
Stagflation refers to persistent high inflation coupled with high unemployment and stagnant demand /growth in economy.
High Inflation + Low Economic Growth {or conditions of recession} + Low Employment Generation = Stagflation
5. Which of the following is / are instruments of monetary policy?
- Bank Rate Policy
- Reserve Ratio Requirements
- Liquidity Adjustment Facility
- Open Market Operations
Select the correct option from the codes given below:
[A] Only 1, 2 & 3
[B] Only 2, 3 & 4
[C] Only 1, 2 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [1, 2, 3 & 4]
Notes:
The major instruments of monetary policy are Cash Reserve Ratio, Statutory Liquidity Ratio, Bank Rate, Repo Rate, Reverse Repo Rate, and Open Market Operations.
6. The International trade of Nylon Fibers comes under the jurisdiction of which of the following ministries in India?
[A] Ministry of Textiles
[B] Ministry of Chemicals and Fertilizers
[C] Ministry of Petroleum
[D] Ministry of Commerce
Show Answer
Correct Answer: C [Ministry of Petroleum]
Notes:
The International trade of Nylon Fibers in India falls under the Ministry of Chemicals and Fertilizers. This ministry oversees the production and regulation of chemical products, including synthetic fibers like nylon, which is a polymer made from petrochemicals. Nylon was first introduced in 1935 by DuPont and is widely used in textiles, automotive, and industrial applications.
7. The green shoe option is a clause in the underwriting agreement of an IPO, which allows to ___?
[A] Sell additional shares
[B] Record Investor demands
[C] Purchase the shares back from Investors
[D] None of them
Show Answer
Correct Answer: A [ Sell additional shares ]
Notes:
The green shoe option is a clause in the underwriting agreement of an IPO, which allows to sell additional shares, usually 15%, to the public if the demand exceeds expectations and the stock trades above its offering price. This option, also known as the over-allotment provision. It gets its name from the Green Shoe company, which was the first company to allow such an option.
8. Which Ministry has adopted the goal of "Haat to Hypermarket" as the overarching objective of the Rural Business Hubs (RBH)?
[A] Ministry of Panchayati Raj
[B] Ministry of Corporate Affairs
[C] Ministry of Skill Development and Entrepreneurship
[D] Ministry of Rural Development
Show Answer
Correct Answer: A [ Ministry of Panchayati Raj ]
Notes:
Ministry of Panchayati Raj has adopted the goal of "Haat to Hypermarket" as the overarching objective of the Rural Business Hubs (RBH)
9. Consider the following places:
- Mumbai
- Hyderabad
- Kolkata
- Noida
Which of the above are known for coin minting in India?
[A] 1, 2 & 3 Only
[B] 2 & 4 Only
[C] 2, 3 & 4 Only
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [ 1, 2, 3 & 4 ]
Notes:
SPMCIL comprises four mints: India Government Mint in Mumbai, Hyderabad, Kolkata and Noida.
10. Which of the following is an example of sunset industries?
[A] Peda making industry
[B] Petrochemical industry
[C] Food processing industry
[D] Space tourism
Show Answer
Correct Answer: A [ Peda making industry ]
Notes:
A sunrise industry is one that is new or relatively new, is growing fast and is expected to become important in the future. A sunset industry is an industry in decline, one that has passed its peak or boom periods.
