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. A new private bank is established under which of the following?
[A] Banking regulation Act 1949
[B] Companies Act 1956
[C] RBI Act 1934
[D] All the above
Show Answer
Correct Answer: B [Companies Act 1956]
Notes:
Section 3 of the Companies Act provides details on the basic requirements for forming a company. The formation of a public company involves 7 or more people who subscribe their names to the memorandum and register the company for any lawful purpose. 2 or more persons can register to form a private company under this act.
2. Which among the following banks assist and coordinate in selling of the State Development Loans (SDLs) in India?
[A] RBI
[B] SBI
[C] IDBI
[D] Scheduled Commercial Banks
Show Answer
Correct Answer: A [RBI]
Notes:
State Development Loans (SDLs) are market borrowings by state governments. RBI co-ordinates the actual process of selling these securities
3. The most active segment of the Money Market in India is which one of the following?
[A] Call Money / Notice Money Market
[B] Repo / Reverse Repo
[C] Commercial Paper (CP)
[D] Certificate of Deposit (CD)
Show Answer
Correct Answer: A [Call Money / Notice Money Market]
Notes:
Call Money / Notice Money Market is the most active segment of the money market in India.
4. Which among the following bank had issued first successful Credit Card of the world?
[A] Bank of America
[B] Standard Chartered Bank
[C] CitiBank
[D] ANZ Grindlays Bank
Show Answer
Correct Answer: A [Bank of America]
Notes:
The first successful credit card was issued by Bank of America in 1950. It was called the “BankAmericard,” which later evolved into Visa. This innovation revolutionized consumer credit and payment systems, paving the way for modern credit cards.
5. A Public Debt Office works as investment banker to the _____?
[A] Public
[B] Commercial Banks
[C] RBI
[D] Government
Show Answer
Correct Answer: D [Government]
Notes:
The Public Debt Office (PDO) functions as an investment banker to the Government. It manages the issuance and servicing of government securities, ensuring that the government can finance its operations and manage public debt effectively. The PDO plays a crucial role in maintaining the stability of the financial system by facilitating government borrowing and managing the national debt portfolio.
6. Which among the following is the short name of highest authority in India for Indirect Taxes?
[A] CBED
[B] CBDT
[C] CBEC
[D] CBIT
Show Answer
Correct Answer: C [CBEC]
Notes:
Central Board of Excise and Customs (CBEC)
7. Round tripping is used as a ___?
[A] Policy to boost FDI in country
[B] Means of tax evasion
[C] Policy of export promotion
[D] Calculation of National Income
Show Answer
Correct Answer: B [Means of tax evasion]
Notes:
Round tripping refers to money from one country going out through unofficial channels and being invested back into the same country from outside to avail of tax benefits under the double tax avoidance agreement (DTAA).Round Tripping makes the government lose large amount of tax revenue as taxes on both outgoing and incoming money is lost.
8. Why the Indirect taxes are termed regressive taxing mechanisms?
[A] They are charged at higher rates than direct taxes
[B] They are charged the same for all income groups
[C] They are not charged the same for all income groups
[D] ]None of the above is a correct reason
Show Answer
Correct Answer: B [They are charged the same for all income groups]
Notes:
The indirect taxes like VAT etc are paid by everyone if they buy any product irrespective of financial conditions. Direct taxing is considered the most progressive taxing mechanisms because they justify the income levels of the people
9. Which among the following is NOT a subsidiary of RBI?
[A] National Housing Bank
[B] NABARD
[C] Bharatiya Reserve Bank Note Mudran Private Limited
[D] SIDBI
Show Answer
Correct Answer: D [SIDBI ]
Notes:
RBI has four subsidiaries viz. Deposit Insurance and Credit Guarantee Corporation, DICGC; National Housing Bank; Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) and NABARD.
10. Which among the following is / are included in the balance of payments?
1. Balance of Trade
2. Foreign Direct Investments
3. Foreign Indirect Investments
4. Foreign Aid
5. Foreign Tourist Expenditures
6. Domestic Tourism Expenditures
Choose the correct option from the codes given below:
[A] 1, 2, 3, 4, 5 & 6
[B] Only 1, 2 & 5
[C] Only 2, 3, 4 & 5
[D] Only 1, 2, 3, 4 & 5
Show Answer
Correct Answer: D [ Only 1, 2, 3, 4 & 5 ]
Notes:
The balance of payments (BOP) records all economic transactions between residents of a country and the rest of the world over a specific period. It includes: 1. Balance of Trade: The difference between exports and imports of goods and services. 2. Foreign Direct Investments (FDI): Investments made by a company or individual in one country in business interests in another country. 3. Foreign Indirect Investments: Investments in financial assets in another country, such as stocks and bonds. 4. Foreign Aid: Financial assistance given by one country to another. 5. Foreign Tourist Expenditures: Money spent by foreign tourists in the host country. Domestic Tourism Expenditures are not included in the BOP as they pertain to internal transactions. Thus, the correct answer is “Only 2, 3, 4 & 5.”
