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. In which of the following countries first Stock Exchange opened?
[A] Uk
[B] Netherlands
[C] USA
[D] India
Show Answer
Correct Answer: B [Netherlands]
Notes:
The first stock exchange was in the Netherlands when the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange
2. Which tax is levied exclusively by state governments in India?
[A] Entertainment Tax
[B] Wealth Tax
[C] Estate Duty
[D] Corporation Tax
Show Answer
Correct Answer: A [Entertainment Tax]
Notes:
Entertainment Tax is listed under Entry 62 of List II (State List) in the Seventh Schedule of the Indian Constitution. Only state governments could levy and collect this tax before the introduction of Goods and Services Tax in July 2017. Post-GST, most components of Entertainment Tax were subsumed under GST, but states retained powers for some local bodies and specific categories.
3. Who among the following declared the First Industrial Policy in the Post Independence Period?
[A] Jawahar lal Nehru
[B] Syama Prasad Mookerjee
[C] Bayya Suryanarayana Murthy
[D] Rafi Ahmed Kidwai
Show Answer
Correct Answer: B [Syama Prasad Mookerjee]
Notes:
In the year 1948, India’s first Industrial Policy Resolution was adopted. This resolution defined the roles of government in development of industries in independent India. This policy determined that India would follow a mixed economy model having both public and private enterprises.
4. India’s first Export Promotion Industrial park was opened in:
[A] Delhi
[B] Nagpur
[C] Jaipur
[D] Bangalore
Show Answer
Correct Answer: C [Jaipur]
Notes:
India’s first Export Promotion Industrial Park (EPIP) was opened in Jaipur. The EPIP in Rajasthan at Sitapura is complete. The park is the largest Export-Park in Northern India.
The EPIP scheme was implemented to create infrastructure for exports in specific locations. The parks have modern infrastructure to boost the export of commodities and services. Units in the EPIP must commit to exporting at least 33% of their production.
5. Which among the following measures for controlling inflation can be taken by the Reserve Bank of India but not by the Government of India?
[A] Implementing progressive taxation policies
[B] Adjusting public sector expenditure budgets
[C] Credit rationing to limit money supply
[D] Regulating foreign direct investment flows
Show Answer
Correct Answer: C [Credit rationing to limit money supply]
Notes:
The Reserve Bank of India can use credit rationing to limit money supply. Credit rationing is a monetary policy tool of RBI. Progressive taxation and public sector expenditure are managed by the Government of India as fiscal policy. Regulation of foreign direct investment flows is also executed by the government. RBI and government use separate policy instruments for inflation control.
6. Which of the following statements best describes a progressive tax system?
[A] The tax rate decreases as the taxable amount increases
[B] The tax rate stays the same regardless of the taxable amount
[C] The tax rate increases as the taxable amount increases
[D] The tax rate is randomly determined
Show Answer
Correct Answer: C [The tax rate increases as the taxable amount increases]
Notes:
In a progressive tax system, higher income earners pay a higher tax rate compared to those who earn less. This is based on the assumption that individuals who earn more have the ability and the capacity to pay more taxes. Most income tax systems in the world are progressive, including the United States, Canada, and the United Kingdom.
7. Who published “The Case for Flexible Exchange Rates” in 1953?
[A] John Maynard Keynes
[B] Milton Friedman
[C] Friedrich Lutz
[D] Harry Johnson
Show Answer
Correct Answer: B [Milton Friedman]
Notes:
Milton Friedman published “The Case for Flexible Exchange Rates” in 1953. Friedman’s essay advocated flexible exchange rates to provide monetary policy independence. The paper provided the foundational arguments and theory supporting flexible exchange rate systems over fixed ones. Friedman’s analysis influenced international monetary economics from the 1950s onward.
8. Cultural command area calculations are used in which of the following?
[A] Preparation of a Land Development Plan
[B] Designing an Irrigation Plan
[C] Prepare a plan for new crops introduction
[D] Design the agricultural policy
Show Answer
Correct Answer: B [Designing an Irrigation Plan]
Notes:
Cultural command area refers to the area that can be irrigated and cultivated after suitable preparation. It is a key parameter in designing irrigation plans to determine the extent of land that irrigation projects can serve effectively. Calculation of cultural command area is a standard part of planning for canal and irrigation networks in Indian agriculture and water resource engineering.
9. Central Employment Guarantee Council overlooks the progress of which among the following scheme?
[A] MGNREGA
[B] Food for Works Programme
[C] National Rural Livelihood Mission
[D] All of them
Show Answer
Correct Answer: A [MGNREGA]
Notes:
Central Employment Guarantee Council was constituted under Section 10 of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 to discharge the duties and functions under this act.
10. The negotiable instruments are passed freely from one party to another almost in the same way as money. To be negotiable, the letter of credit must include a / an:
[A] conditional promise to pay on demand or at a definite time
[B] unconditional promise to pay on demand or at an indefinite time
[C] unconditional promise to pay on demand or at a definite time
[D] conditional promise to pay on demand or at a indefinite time
Show Answer
Correct Answer: A [ conditional promise to pay on demand or at a definite time ]
Notes:
To be negotiable, the letter of credit must include an unconditional promise to pay on demand or at a definite time. The LC is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met. In it all parties deal in documents.
