Indian Economy MCQs

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when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency, The term is not only applied to usage of the United States dollar, but generally to the use of any foreign currency as the national currency.

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The International Monetary Fund was established in 1944. The IMF has 190 member countries. The World Economic Outlook Report is published by the IMF biannually. The report provides analyses and projections of the global economy. The WEO was first published in 1980. Updates to the report are typically released in January and July.

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The correct answer is State Bank of India (SBI). It was established in 1955, evolving from the Imperial Bank of India, which itself was formed in 1921. The Imperial Bank was a successor to the Bank of Calcutta, founded in 1806, making SBI one of the oldest banks in India. SBI is now the largest bank in India, serving millions of customers worldwide.

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The correct answer is Suresh Tendulkar. He chaired the expert committee set up by the Planning Commission of India in 2009, which recommended using “Consumption Expenditure” as a criterion for identifying Below Poverty Line (BPL) households. This approach aimed to provide a more accurate assessment of poverty by focusing on actual consumption rather than income, reflecting the living standards of households. The Tendulkar Committee’s recommendations have importantly influenced India’s poverty measurement and policy formulation.

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A monopolist can maximize profits when the marginal cost is equivalent to the marginal revenue. This strategy is implemented because the greatest profit occurs at the output level where the difference between total revenue and total cost is the greatest. This ensures economic efficiency and profit gains for the monopolist.

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Banks in India have the authority to set savings bank account interest rates since May 2011. The Reserve Bank of India deregulated savings deposit rates in October 2011. Each bank decides its own rate, subject to RBI guidelines on calculation and credit of interest. RBI requires interest calculation on a daily basis. Rates are publicly notified by each bank.

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Credit creation by commercial banks occurs under the fractional reserve system. Banks keep a part of deposits as reserves and lend the rest. This process increases the total supply of money. The cash reserve ratio (CRR) determines the amount banks must retain. The money multiplier is calculated as 1 divided by the CRR. New loans are redeposited and re-lent, multiplying deposits.

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The quantitative instruments are Open Market Operations, Liquidity Adjustment Facility (Repo and Reverse Repo), Marginal Standing Facility, SLR, CRR, Bank Rate, Credit Ceiling etc.
On the other hand, qualitative instruments are: credit rationing, moral suasion and direct action (by RBI on banks).

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City Gas Distribution sector accounted for the highest consumption share of domestically produced natural gas in India as of FY2026. The CGD segment supplies households and sectors including CNG and PNG. Gas consumption by fertilizers, power, and refineries declined until FY2026. Government reports show CGD maintained demand growth, unlike other sectors. Policy measures support expansion in urban gas infrastructure since 2018.

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Forward guidance was widely adopted after the 2008 global financial crisis. The Federal Reserve began explicit forward guidance in 2011. The European Central Bank used this tool in 2013. The Bank of Japan started using forward guidance in 2013. Forward guidance aims to influence market expectations about future monetary policy. It became prominent when policy rates approached zero, limiting conventional monetary tools.