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. The terms such as ‘placement, layering, integration of funds’ are related to which among the following?
[A] Fiscal Management
[B] Financial Stability
[C] Money Laundering
[D] Capital Market Trading
Show Answer
Correct Answer: C [Money Laundering]
Notes:
The process of laundering money generally involves three steps: placement, layering, and integration. Placement refers to injecting the “dirty money” into the legitimate financial system. Layering conceals the source of the money through a series of transactions and bookkeeping tricks. in Integration, the now-laundered money is withdrawn from the legitimate account to be used for desired purposes.
2. Which among the following imposes a greater burden (relative to resources) on the poor than on the rich ?
[A] Progressive tax
[B] Regressive Tax
[C] Lump Sum tax
[D] Proportional tax
Show Answer
Correct Answer: B [Regressive Tax]
Notes:
A regressive tax is the one in which tax rate decreases as the amount subject to taxation increases; and the tax rate progresses from high to low. The lowest amount is subject to higher taxation and this leads to individuals with low income bear the highest burden of regressive taxes. Such tax does not take into account the ability to pay.
3. Consider the following institutions:
International Monetary Fund
World Bank
World Trade Organization
US Treasury Department
Which among the above institutions are commonly associated with the Washington Consensus?
[A] 1 & 2
[B] 1, 2 & 3
[C] 1, 2 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: C [1, 2 & 4]
Notes:
The term Washington Consensus is commonly linked with policy ideas associated with institutions based in Washington, D.C., especially the International Monetary Fund, the World Bank, and the US Treasury Department. It is not usually associated with the World Trade Organization, which was created later and is not part of the original framework. Hence, statements 1, 2 and 4 are correct.
4. Which of these is NOT an anti-inflationary monetary measure?
[A] Increasing central bank discount rate
[B] Raising Cash Reserve Ratio
[C] Implementing credit rationing policies
[D] Open market purchase of government securities
Show Answer
Correct Answer: D [Open market purchase of government securities]
Notes:
Open market purchase of government securities injects liquidity into the banking system. The Reserve Bank of India buys government securities to increase money supply. This is an expansionary policy used to stimulate economic growth. Anti-inflationary measures contract money supply. RBI uses open market sales, not purchases, to control inflation. Open market operations are conducted under Section 17 of the Reserve Bank of India Act, 1934.
5. The mosquito fern or Azolla is one of the most important bio fertilizers. In association with which among the following Azolla acts as a biofertilizer?
[A] Bacteria
[B] Blue-green algae
[C] Fungus
[D] Green algae
Show Answer
Correct Answer: B [ Blue-green algae]
Notes:
Bio-fertilizers such as Rhizobium, Azotobacter, Azospirillum and blue green algae (BGA) have been in use a long time. Anabaena, a blue green alga in association with water fern Azolla contributes nitrogen and also enriches soils with organic matter.
6. Which port exports the highest value of seafood from India?
[A] Visakhapatnam
[B] Tuticorin
[C] Kochi
[D] Jawaharlal Nehru Port Authority (JNPT)
Show Answer
Correct Answer: A [Visakhapatnam]
Notes:
Visakhapatnam Port handled 2.19 billion or 29.72% of India’s seafood exports in FY24. In FY25, Visakhapatnam’s seafood export value exceeded 2 billion out of India’s total 7.45 billion. The port exported 314,199 tonnes, while JNPT exported 240,253 tonnes valued at 779.49 million. Andhra Pradesh’s aquaculture, mainly Vanammei shrimp, supports Visakhapatnam’s status as the top exporter.
7. The business transactions done in lieu of which of the following would be called Invisible Trade?
- Consulting
- Income from foreign investment
- Shipping services
- Tourism
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 2 & 3
[C] Only 3 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [ 1, 2, 3 & 4 ]
Notes:
Business transactions that occur with no exchange of tangible goods called Invisible Trade. It involves the transfer of non-tangible goods and/or service, intellectual property and patents. Examples of invisible trade including consulting, income from foreign investment, shipping services and tourism.
8. What does “bear market” mean in stock market terminology?
[A] A period when stock prices rise steadily
[B] Foreign investors outperform domestic investors
[C] Higher investment in money market than capital market
[D] Stock prices fall 20% or more from recent highs for at least two months
Show Answer
Correct Answer: D [Stock prices fall 20% or more from recent highs for at least two months]
Notes:
A bear market is a prolonged phase of falling stock prices, usually defined as a drop of 20% or more from a recent peak. It reflects weak market sentiment, rising pessimism, and reduced investor confidence. The decline is not a short-lived dip; it generally persists long enough to be recognized as a broader downtrend in the market.
9. The SPS Agreement under the WTO is most concerned with which among the following?
[A] Trade of plant genetic materials
[B] Phytosanitary Measures
[C] Technical Barriers to Trade
[D] Trade in Fertilizers
Show Answer
Correct Answer: B [ Phytosanitary Measures ]
Notes:
The Agreement on the Application of Sanitary and Phytosanitary Measures – also known as the SPS Agreement is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the beginning of 1995. Under the SPS agreement, the WTO sets constraints on member-states’ policies relating to food safety (bacterial contaminants, pesticides, inspection and labeling) as well as animal and plant health (phytosanitation) with respect to imported pests and diseases. The SPS agreement is closely linked to the Agreement on Technical Barriers to Trade, which was signed in the same year and has similar goals.
10. What is the main aim of India’s Foreign Trade Policy 2023?
[A] Export promotion and import substitution only
[B] Export promotion, import regulation, and $2 trillion exports by 2030
[C] Import-oriented manufacturing and domestic consumption
[D] None of the above
Show Answer
Correct Answer: B [Export promotion, import regulation, and $2 trillion exports by 2030]
Notes:
India’s Foreign Trade Policy 2023 is designed to boost exports and make trade procedures easier and more efficient. A major objective of the policy is to support India’s export growth and move towards $2 trillion in goods and services exports by 2030. It also focuses on import rationalization, smoother logistics, digital trade facilitation, and greater competitiveness of Indian exporters in global markets.
