Indian Economy MCQs

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London is the world’s largest foreign exchange trading centre. In the Bank for International Settlements’ latest Triennial Central Bank Survey, it accounted for the biggest share of global FX turnover, ahead of New York, Singapore and Tokyo. The city’s dominance is supported by its strong financial infrastructure, concentration of major banks, and time-zone advantage, which allows trading overlap with both Asian and American markets.

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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.

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The Balance of Payments (BOP) crisis struck India in 1991. This triggered an economic crisis due to escalating oil prices, inflation and low foreign exchange reserves, which beleaguered India’s ability of import payments. Repercussions included severe rupee devaluation. The crisis incited economic liberalization, lowering of import tariffs and eased foreign exchange restrictions. With help from International Monetary Fund and other organizations, India managed to stabilize its situation, highlighting the necessity for constant economic overhauls to sustain financial equilibrium.

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Fiscal policy uses government taxation and spending to affect economic growth, employment, and inflation. Main tools are tax adjustments and expenditure management. These decisions are made through the government’s annual budget process. Fiscal policy is distinguished from monetary policy, which is implemented by central banks using instruments such as interest rates, reserve requirements, and open market operations.

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In fiscal 2025, the World Bank’s IBRD top country borrowers were Brazil, Türkiye and Argentina, based on net commitments. The annual report ranks these three countries ahead of the others in IBRD borrowing for the year. This makes option 1 the correct answer. The question now specifies the reference period and metric, which removes ambiguity and matches the official World Bank dataset.

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India and Bermuda signed a Tax Information Exchange Agreement (TIEA) in 2010. This was the first TIEA being signed by India.

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All three statements are correct. The Market Stabilization Scheme was created to absorb surplus liquidity by issuing Treasury Bills and dated securities over and above the normal borrowing programme, subject to a ceiling. The proceeds are parked in the MSS Account, which is treated as part of the Consolidated Fund of India. Since these are government accounts, they fall within the audit scope of the Comptroller and Auditor General of India.

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Food subsidy in India is provided through multiple channels. The government fixes Central Issue Prices for subsidized foodgrains, supplies them through the Public Distribution System, and also supports the Food Corporation of India for procurement, storage, and distribution. Hence, all three statements are correct.

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The Financial Action Task Force is an intergovernmental body established in 1989 at the G7 Summit in Paris. FATF sets international standards to prevent money laundering and terrorist financing. The organization developed 40 Recommendations as technical standards. It conducts mutual evaluations of members. FATF monitors risks and trends in global money laundering and terrorist financing.

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Kandla Special Economic Zone is associated with the port city of Kandla in Gujarat. It began in 1965 as Asia’s first Export Processing Zone and was later converted into a Special Economic Zone in 2000. This makes Kandla the correct choice among the given options. The zone has remained an important trade and export hub, supporting units engaged in manufacturing and export-oriented activities under India’s SEZ framework.