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. Which industry is not part of the Index of Eight Core Industries?
[A] Electricity
[B] Crude Oil
[C] Natural Gas
[D] Pharmaceuticals
Show Answer
Correct Answer: D [Pharmaceuticals]
Notes:
The Index of Eight Core Industries includes Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. Pharmaceuticals are not included in this index. The Index serves as an indicator for measuring the industrial performance in India, and is released monthly by the Ministry of Commerce and Industry since 2004.
2. RBI conducts open market operations mainly in which market?
[A] Primary market only
[B] Secondary market only
[C] Both primary and secondary markets
[D] Gilt-edged market
Show Answer
Correct Answer: B [Secondary market only]
Notes:
Open market operations mean the RBI’s purchase and sale of government securities to manage liquidity and money supply. These transactions are carried out in the secondary market for government securities, where already issued securities are traded. The gilt-edged market is the market for government securities, but the more precise classification for OMO is the secondary market. Hence, the correct answer is secondary market only.
3. Which tax is levied and collected by local bodies in India?
[A] Entertainment tax
[B] Income tax
[C] Corporation tax
[D] Customs duty
Show Answer
Correct Answer: A [Entertainment tax]
Notes:
Article 243X of the Indian Constitution allows State Legislatures to empower local bodies to levy taxes such as entertainment tax. Income tax, corporation tax, and customs duty are Union taxes exclusively collected by the central government. Entertainment tax is assigned to municipalities or local authorities under state law for collection and appropriation.
4. What is the main objective of setting up fair price shops?
[A] To demote speculation and hoarding
[B] To incentivise the trading of essential commodities
[C] To eliminate the monopoly of the traders and speculators
[D] To make the essential commodities available to the weaker sections of the society
Show Answer
Correct Answer: D [To make the essential commodities available to the weaker sections of the society]
Notes:
Fair price shops form part of India’s Public Distribution System since 1947. They provide essential commodities such as grains, sugar, and kerosene to people below the poverty line at subsidized prices. The Targeted Public Distribution System was introduced in 1997 to further improve the food security for economically vulnerable sections. Only ration cardholders can purchase from these shops as per government rules.
5. In context with the macroeconomics , Philips Curve is a relationship between the rates of ___?
[A] Unemployment & Exim trade
[B] Unemployment and Inflation
[C] Unemployment and Demand
[D] Unemployment and Poverty
Show Answer
Correct Answer: B [Unemployment and Inflation]
Notes:
Phillips curve developed by A. W. Phillips says that the inflation and unemployment have a stable and inverse relationship; which means that higher inflation is associated with lower unemployment and vice versa. However, later it was proved that this curve is applicable only in the short-run, and in long-run, inflationary policies would not decrease unemployment.
6. What was the nationality of Mahbub ul Haq, one of the pioneers of Human development theory and co-founder of the Human Development Report?
[A] Uk
[B] USA
[C] Pakistan
[D] India
Show Answer
Correct Answer: C [Pakistan]
Notes:
Human Development Report was first launched in 1990 by the Pakistani Economist Mahbub ul Haq and Indian Nobel laureate Amartya Sen.
7. Which sector uses the largest share of natural gas consumed in India?
[A] Fertilizers
[B] City Gas Distribution (Cooking Gas)
[C] Power Production
[D] Refineries
Show Answer
Correct Answer: A [Fertilizers]
Notes:
Among the major consuming sectors, fertilizers account for the largest share of natural gas consumption in India. Gas is used extensively in fertilizer plants, especially for ammonia and urea production, making this sector the biggest user. City Gas Distribution is also a major consumer, but its share is lower than fertilizers. Power production and refineries consume significant quantities too, yet they do not exceed the fertilizer sector in overall gas use.
8. A rise in SENSEX in India indicates which of the following?
[A] There is a rise in the prices of shares of all companies registered with Bombay Stock exchange
[B] There is a rise in the prices of shares of all companies registered with National Stock Exchange
[C] There is an overall rise in the prices of a group of shares in BSE
[D] There is an overall rise in the prices of a group of shares in NSE
Show Answer
Correct Answer: C [ There is an overall rise in the prices of a group of shares in BSE ]
Notes:
A share market Index shows how a specified portfolio of share prices is moving in order to give an indication of market trends. The BSE SENSEX is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on Bombay Stock Exchange.
9. Consider the following statement about India’s child welfare programme:
The scheme now subsumed under Mission Saksham Anganwadi & Poshan 2.0 focuses on improving the nutritional and health status of children in the age group of _?
[A] 0-6 years
[B] 0-10 years
[C] 0-14 years
[D] 6-14 years
Show Answer
Correct Answer: A [0-6 years]
Notes:
Mission Saksham Anganwadi & Poshan 2.0 continues the Anganwadi-based nutrition and early childhood care framework for young children. Its services are meant for children from birth to 6 years of age, along with pregnant women and lactating mothers. The child-focused component covers growth monitoring, supplementary nutrition, preschool activities, health referral and related support, so the correct age group remains 0-6 years.
10. Which purpose does the World Bank support with loans and financing? (UPSC Prelims 1984)
[A] Supplying foreign currency in balance-of-payments crises
[B] Supporting development projects on poverty and infrastructure
[C] Funding military and defense expenditures
[D] Financing banking in developed countries
Show Answer
Correct Answer: B [Supporting development projects on poverty and infrastructure]
Notes:
The World Bank provides financing to developing countries for development projects including poverty reduction, infrastructure, health, education, and sustainable growth. It offers low-interest loans and grants through institutions like IDA and IBRD. Its projects focus on increasing access to basic services, clean water, sanitation, and improving living conditions. The institution has funded thousands of development projects since its inception in 1944.
