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. What is the number of members in the Monetary Policy Committee (MPC)?
[A] 4
[B] 5
[C] 6
[D] 7
Show Answer
Correct Answer: C [ 6 ]
Notes:
Monetary Policy Committee (MPC) committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
2. Which of the following currencies is not included in the Special Drawing Rights (SDR) Currency Basket?
[A] Indian Rupee
[B] British Pound
[C] Japanese Yen
[D] Chinese Renminbi
Show Answer
Correct Answer: A [Indian Rupee]
Notes:
The SDR basket now consists of the following five currencies: U.S. dollar 41.73%, Euro 30.93%, Renminbi (Chinese Yuan) 10.92%, Japanese Yen (8.33%), British Pound (8.09%).
3. A systematic record of all economic transactions completed between residents of a country and the rest of the world in a year is known as..?
[A] Net Capital Flow
[B] Balance of Payment
[C] Balance of Trade
[D] Absolute Flow
Show Answer
Correct Answer: B [Balance of Payment]
Notes:
The Balance of International payments or Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
The three main components of BoP are Current Account, Capital Account and Official Reserve Transactions
4. Which among the following are called “Breton Wood Twins”?
[A] IBRD & IMF
[B] IDA & IFC
[C] IDA & MIGA
[D] IMF & IDA
Show Answer
Correct Answer: A [IBRD & IMF]
Notes:
The planners at Breton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group
5. Which among the following authority decides upon any issues regarding the revision of fee collected as Development Fee from Airports in India?
[A] Airport Authority of India
[B] Airports Economic Regulatory Authority
[C] Ministry of Civil Aviation
[D] Secretary , Ministry of Civil Aviation
Show Answer
Correct Answer: B [Airports Economic Regulatory Authority]
Notes:
The Airports Economic Regulatory Authority (AERA) Bill 2007 ensures that the watchdog monitors performance standards of airports and regulate tariff and other charges for aeronautical services including Airport
6. Which among the following is a correct impact of dear Money ?
[A] Borrowings become cheap
[B] Borrowings become expensive
[C] Borrowings become either cheap or expensive
[D] There is no impact of Dear Money on Borrowings
Show Answer
Correct Answer: B [Borrowings become expensive]
Notes:
Dear money refers to money that is hard-to-borrow. Money is hard to borrow due to several reasons such as high interest rates. When central banks implement tight monetary policy, interest rates go up and this will will make money hard to borrow.
7. Wage-price spirals are linked to which type of inflation?
[A] Demand-pull inflation
[B] Cost-push inflation
[C] Deflation
[D] Stagflation
Show Answer
Correct Answer: B [Cost-push inflation]
Notes:
A wage-price spiral occurs when rising wages increase production costs leading to higher prices, which then prompt further wage demands. This describes cost-push inflation. Cost-push inflation is driven by increased costs of inputs such as wages and raw materials. During the 1970s, wage-price spirals contributed to persistent inflation in many developed countries due to frequent labor market adjustments and price hikes.
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. Which among the following is correct representation of the Money Multiplier?
[A] Ratio of Broad Money (M3) to Reserved Money (M0) i.e. M3/M0
[B] Ratio of Broad Money (M3) to Narrow Money (M1) i.e. M3/M1
[C] Ratio of Narrow Money (M1) to Broad Money (M3) i.e. M1/M3
[D] Ratio of Narrow Money (M1) to Reserved Money (M0) i.e. M1/M0
Show Answer
Correct Answer: A [Ratio of Broad Money (M3) to Reserved Money (M0) i.e. M3/M0]
Notes:
The correct representation of the Money Multiplier is the ratio of Broad Money (M3) to Reserved Money (M0), expressed as M3/M0. The Money Multiplier indicates how much money supply can increase based on the reserves held by banks. M0 represents the total of a country’s physical currency, while M3 includes all liquid or near-liquid assets. This relationship is crucial in understanding monetary policy and banking operations.
10. What is the objective of the Central Government in creating the “Non-lapsable Central Pool of Resources”?
[A] To provide development funding in Naxalite affected areas
[B] To provide additional development grant to most backward 200 districts all over country
[C] To provide time to time fiscal stimulation to the economy
[D] To provide development funding to North East and Sikkim
Show Answer
Correct Answer: D [ To provide development funding to North East and Sikkim ]
Notes:
NLCPR The broad objective of the Non-Lapsable Central Pool of Resources (NLCPR) is to ensure speedy development of infrastructure in the North Eastern Region and Sikkim by increasing the flow of budgetary financing for specific viable infrastructure projects/schemes in the region. The provision is for funding these projects. The outlay includes a provision of Rs. 50 crore for funding special projects/schemes for the economic development of the Karbi Anglong Autonomous Territorial Council (KAATC) area in Assam.
