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. For which of the following the term “Paper Gold” is used?
[A] United States Dollar
[B] Gold Reserved with International Monetary Fund
[C] United States Dollar
[D] Special Drawing Rights
Show Answer
Correct Answer: D [Special Drawing Rights]
Notes:
SDRs of the International Monetary Funds are also called Paper Gold. They are allotted to member countries by IMF and cannot be used by private parties. They are supplementary to Forex reserves.
2. The concept of weaker sections under ‘priority sector’ was introduced on the recommendation of which of the following committees?
[A] Krishnaswami Committee
[B] Varshney Committee
[C] Gadgil Committee
[D] Abid Hussain Committee
Show Answer
Correct Answer: A [Krishnaswami Committee]
Notes:
The term Priority Sector Lending was defined in the year 1972 by Krishnaswamy Committee. Initially banks were given an Priority sector lending target of 33.33%. But following the Krishnaswami Committee’s recommendations, the targets were raised to 40%.
3. Which among the following bodies in India protects the interests of consumers against anti-competitive practices of market entities?
[A] National Consumer Forum
[B] Competition Commission of India
[C] National Consumer Disputes Redressal Commission
[D] Central Vigilance Commission
Show Answer
Correct Answer: B [Competition Commission of India]
Notes:
The Competition Commission of India (CCI) is the statutory body responsible for preventing practices that have an adverse effect on competition in India. It enforces the Competition Act, 2002 and works to promote fair competition, protect consumer interests and ensure freedom of trade in markets. It is a quasi-judicial authority and the correct choice among the given options. The consumer forums and the Central Vigilance Commission do not perform this competition-regulation function.
4. A good that is non-rivalrous and non-excludable, and whose benefits cannot be priced and therefore to which the principle of exclusion does not apply, comes under which heading?
[A] Pure Private Goods
[B] Pure Public Goods
[C] Pure Free Goods
[D] Pure Market Goods
Show Answer
Correct Answer: B [Pure Public Goods]
Notes:
Pure public goods are both non-rivalrous and non-excludable. In such goods, one person’s consumption does not reduce availability for others, and it is difficult to exclude anyone from benefiting once the good is provided. Common examples include national defense, street lighting, and clean air.
5. Which tool absorbs excess liquidity from banks most effectively?
[A] Repo Rate
[B] Cash Reserve Ratio (CRR)
[C] Prime Lending Rate
[D] Statutory Liquidity Ratio (SLR)
Show Answer
Correct Answer: B [Cash Reserve Ratio (CRR)]
Notes:
The Reserve Bank of India uses the Cash Reserve Ratio under the Reserve Bank of India Act, 1934. CRR is the percentage of total deposits that banks must keep as reserves with RBI in cash only. An increase in CRR immediately reduces available funds for banks to lend. RBI reviews and announces CRR regularly in its monetary policy statements.
6. Which statement about White Label ATMs is correct?
[A] ATMs owned by foreign companies
[B] ATMs owned by private ATM service providers, not banks
[C] ATMs outsourced by banks with sponsor branding
[D] ATMs owned by the government
Show Answer
Correct Answer: B [ATMs owned by private ATM service providers, not banks]
Notes:
White Label ATMs in India are owned and operated by non-banking entities authorized by the Reserve Bank of India since 2012. These ATMs do not display any bank logo and can be used by customers of any bank for basic transactions. Tata Communications Payment Solutions was the first company to set up White Label ATMs under the ‘Indicash’ brand in India.
7. Imposing an Import quota helps in__:
- correcting unfavourable balance of payments
- improving balance of trade
- protecting domestic industries
- promoting exports
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 1 & 3
[C] Only 1, 2 & 3
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: C [ Only 1, 2 & 3 ]
Notes:
An import restriction imposed on imported goods, to reduce the quantity of certain goods allowed into a country from a particular exporting country, in a stated period. The purpose may be to conserve foreign currency, if there is an unfavourable balance of payments, or to protect the home market against foreign competition (see protective duty). Quotas are usually enforced by means of import licenses.
8. The act of simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms is called _?
[A] Arbitrage
[B] Spot market
[C] Ambush marketing
[D] Futures market
Show Answer
Correct Answer: A [ Arbitrage ]
Notes:
Arbitrage is the process of simultaneous buying and selling of an asset from different platforms, exchanges or locations to cash in on the price difference. While getting into an arbitrage trade, the quantity of the underlying asset bought and sold should be the same. Only the price difference is captured as the net pay-off from the trade.
9. Which country is the main competitor of the Indian jute industry?
[A] Japan
[B] China
[C] Sri Lanka
[D] Bangladesh
Show Answer
Correct Answer: D [Bangladesh]
Notes:
Bangladesh ranks as the world’s second-largest jute producer after India. Bangladesh is the leading global exporter of raw jute and jute products. In 2023, Bangladesh exported about $162 million worth of jute, with India as the primary market. The jute industries of Bangladesh and India dominate global jute supply, with Bangladesh’s exports competing directly with Indian products in international markets.
10. Per Capita Income of a country is obtained by dividing National Income by which of the following?
[A] Total working population
[B] Total population of the country
[C] Area of the country
[D] Volume of the capital used
Show Answer
Correct Answer: B [ Total population of the country ]
Notes:
Per capita income or average income measures the average income earned per person in a given area in a specified year. It is calculated by dividing the area’s total income by its total population.
