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. When a person has a saving account in the bank , the bank assumes the position of ___?
[A] Debtor
[B] Creditor
[C] Agency
[D] Depositor
Show Answer
Correct Answer: A [Debtor]
Notes:
please note bank functions as an agent or agency when it buys or sells securities on behalf of the customer or collects and makes payment on behalf of the customer
2. Which among the following regulates housing finance companies in India ?
[A] RBI
[B] National Housing Bank
[C] Housing Development Finance Corporation
[D] Housing and Development Boards
Show Answer
Correct Answer: B [National Housing Bank]
Notes:
The National Housing Bank (NHB) is the regulator and supervisor of housing finance companies (HFCs) in India. The NHB was established in 1988 and operates as a subsidiary of the Reserve Bank of India. The NHB’s goal is to promote housing finance institutions at the ground and regional levels.
3. Countervailing duty is imposed on which of the following?
[A] imported goods
[B] exported goods
[C] imported good on which import subsidy is applicable
[D] exported goods on which export subsidy is applicable
Show Answer
Correct Answer: A [imported goods]
Notes:
Countervailing duties are tariffs imposed on imported goods to offset subsidies provided to producers or exporters in the exporting country. This aims to level the playing field for domestic producers who compete with subsidized imports. The World Trade Organization (WTO) allows such duties to counteract unfair trade practices.
4. 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.
5. What is the meaning of the “Government Route” in Foreign Investments?
[A] Investments without government approval.
[B] Investments made by government.
[C] Investments that requires prior government approval
[D] Foreign investments in government bonds
Show Answer
Correct Answer: C [Investments that requires prior government approval]
Notes:
The “Government Route” in the language of foreign investments refers to the scenario where a foreign investor needs to acquire prior approval from the government to make an investment. This route is usually applicable for sectors which are of strategic importance or have implications for national security, where it would be imperative for the host country to have an additional level of scrutiny and control.
6. What is the primary industry in the Middle East and North Africa (MENA) region?
[A] Manufacturing
[B] Petroleum
[C] Mines and Minerals
[D] Tourism & Hospitality
Show Answer
Correct Answer: B [Petroleum]
Notes:
The Middle East and North Africa (MENA) hosts a population of approximately 381 million, corresponding to around 6% of the global population. The region is renowned for its rich reserves of petroleum, thereby making petroleum the primary industry. These reserves have played a significant role in shaping the economic, political, and social spheres of the region. Besides petroleum, the region also has concentrations of other resources such as natural gas and mineral resources.
7. Collateralized Borrowing and Lending Obligation (CBLO) is a ____?
[A] Money Market Instrument
[B] Monetary Policy Instrument
[C] Investment fund
[D] Capital Market Instrument
Show Answer
Correct Answer: A [Money Market Instrument]
Notes:
Collateralized Borrowing and Lending Obligation (CBLO) is a money market instrument. It represents the terms and conditions of a loan between a borrower and a lender. CBLO is a short-term investment option that allows investors to earn interest on their excess funds. It also provides a source of short-term funding for borrowers.
CBLO is a discounted instrument that is available in electronic book entry form. The maturity period ranges from one day to one year.
CBLO is a low-risk instrument because it is adequately backed by collateral. It is also a short-term investment option, which means that investors can quickly liquidate their investment if needed.
CBLO is the largest overnight segment in India.
8. How many key infrastructure sectors are known as Core sector in Indian Economy, used for Index of Industrial Production (IIP) data?
[A] 5
[B] 6
[C] 7
[D] 8
Show Answer
Correct Answer: D [8]
Notes:
There are 8 Core Industries or core sectors of the economy viz. coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity used in Index of Industrial Production (IIP).
9. What are the General Anti-Avoidance Rules?
[A] GAAR is a set of rules aimed at curbing aggressive tax planning
[B] GAAR is a set of rules aimed at curbing money laundering by Indians to Foreign countries
[C] GAAR is a set of rules aimed at regulating investments by Indians in foreign Countries
[D] GAAR is a set of rules aimed at regulating investments by Foreigners in India
Show Answer
Correct Answer: A [GAAR is a set of rules aimed at curbing aggressive tax planning]
Notes:
General Anti-Avoidance Rule or GAAR is a broad set of rules aimed at curbing aggressive tax planning. These rules will empower tax authorities to disregard any arrangement if its main purpose is to obtain tax benefit. The arrangement as a whole or in part may be disregarded and tax benefit denied.
10. Which of the following bodies procures, distributes, exports and imports agricultural commodities?
[A] FCI
[B] NAFED
[C] NABARD
[D] All of them
Show Answer
Correct Answer: B [ NAFED ]
Notes:
NAFED is the apex body in cooperative sector and deals in procurement , distribution, export and import of selected agricultural commodities.
