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. In September 1999, which organization established the Poverty Reduction and Growth Facility (PRGF) to make the objectives of poverty reduction and growth more central to lending operations in its poorest member countries?
[A] Asian Development Bank
[B] International Monetary Fund
[C] World Bank
[D] US Federal Bank
Show Answer
Correct Answer: B [International Monetary Fund]
Notes:
The Poverty Reduction and Growth Facility (PRGF) was set up by the International Monetary Fund in September 1999. Its objective was to formulate policies focusing on growth and poverty reduction.
2. Which state led sugarcane production in India in 2023–24?
[A] Uttar Pradesh
[B] Maharashtra
[C] Tamil Nadu
[D] Andhra Pradesh
Show Answer
Correct Answer: A [Uttar Pradesh]
Notes:
Uttar Pradesh contributed over 40% of India’s sugarcane output in the 2023–24 season, with an estimated 220–230 million tonnes. The state consistently leads sugarcane production due to fertile alluvial soil, reliable irrigation from the Ganga basin, and a favorable subtropical climate. Maharashtra ranked second with about 95–100 million tonnes. Data is consistent with figures up to 2024 estimates.
3. Which statement about Giffen goods is correct?
[A] They follow the standard law of demand
[B] They are luxury goods with increasing demand
[C] They violate the law of demand with an upward-sloping demand curve
[D] They have many close substitutes
Show Answer
Correct Answer: C [They violate the law of demand with an upward-sloping demand curve]
Notes:
Giffen goods violate the law of demand and display an upward-sloping demand curve. They are inferior goods for which demand increases as price rises. The term comes from economist Sir Robert Giffen. Classic Giffen goods require that the good is a staple, lacks close substitutes, and constitutes a large part of the consumer’s budget. This is a rare phenomenon in actual markets.
4. Which is not an inflation control measure by the Government or RBI?
[A] Repo Rate Adjustment
[B] Open Market Operations
[C] Cash Reserve Ratio (CRR)
[D] Financial Inclusion
Show Answer
Correct Answer: D [Financial Inclusion]
Notes:
Financial inclusion refers to providing banking and financial services to all sections of society. RBI and the Government use repo rate adjustments, open market operations, and changing CRR as monetary policy tools to manage money supply and inflation. Financial inclusion programs focus on expanding access, such as PMJDY launched in 2014, and do not directly affect inflation control.
5. Which among the following curve defines the principle that zero tax rate would produce zero revenue for the government and a 100% tax rate would also generate zero revenue for the taxing Government?
[A] Laffer curve
[B] Lorenz curve
[C] Engel curve
[D] Kuznets curve
Show Answer
Correct Answer: A [Laffer curve]
Notes:
The Laffer curve is a theoretical concept in economics that illustrates the relationship between tax rates and government revenue. The curve is named after economist Arthur Laffer, who popularized the concept in the 1970s. The basic idea behind the Laffer curve is that there is a certain tax rate that will maximize government revenue. At a 0% tax rate, the government will obviously not collect any revenue. At a 100% tax rate, the government will also not collect any revenue because people will have no incentive to work. The Laffer curve suggests that there is a point in between these two extremes where the government will collect the most revenue. The exact shape and location of the Laffer curve will vary depending on various factors, such as the state of the economy and the efficiency of the government’s tax collection system.
6. Which currency did Keynes propose for global trade from 1940 to 1942?
[A] The Whuffie system managed by the International Trade Organization
[B] The Unitas managed by the World Monetary Authority
[C] The Bancor managed by the International Clearing Union
[D] The Terra managed by the Global Central Bank
Show Answer
Correct Answer: C [The Bancor managed by the International Clearing Union]
Notes:
Keynes and E. F. Schumacher proposed the Bancor as a supranational currency between 1940–1942. The International Clearing Union was suggested to manage its use in global trade. The Bancor proposal was presented by the United Kingdom at the Bretton Woods Conference in 1944. The concept was intended to prevent persistent surpluses or deficits among countries. The Bancor was not adopted; instead, the U.S. dollar was chosen as the main reserve currency.
7. A Banking Ombudsman will not entertain Credit Card complaints which are more than _______old.
[A] 3 months
[B] 6 months
[C] 9months
[D] 12 months
Show Answer
Correct Answer: D [12 months]
Notes:
The correct answer is 1 year (12 months). According to the Banking Ombudsman Scheme, complaints regarding credit cards must be filed within one year from the date of the transaction or the event leading to the complaint. This time limit ensures timely resolution and encourages consumers to report issues promptly. The Banking Ombudsman is a quasi-judicial authority established by the Reserve Bank of India to address customer grievances in the banking sector.
8. What is the short name of India’s top authority for Indirect Taxes?
[A] CBDT
[B] CBEC
[C] CBIT
[D] CBIC
Show Answer
Correct Answer: D [CBIC]
Notes:
The Central Board of Indirect Taxes and Customs (CBIC) was renamed in 2018 from CBEC. CBIC is a statutory body under the Department of Revenue, Ministry of Finance. It is responsible for administration of GST, customs, excise and service tax in India. The board was originally established in 1964 by the Central Boards of Revenue Act, 1963.
9. When a Demand Draft is deposited, what is the bank’s role?
[A] Creditor of the customer
[B] Debtor of the customer
[C] Agent of the customer
[D] Trustee of the customer’s funds
Show Answer
Correct Answer: B [Debtor of the customer]
Notes:
When a customer deposits a Demand Draft, the bank becomes a debtor. The relationship is that the bank owes the equivalent amount to the customer and must repay on demand. This debtor-creditor relationship is regulated by the Indian Contract Act, 1872 and the Banking Regulation Act, 1949. The bank has no trustee obligations in such straightforward deposit transactions.
10. A country has crude birth rate of 44 and a crude death rate of 11. The number of immigrants is more than emigrants. What would be the rate of natural increase of population?
[A] 0.75%
[B] 3.3%
[C] 2.9%
[D] Can not be determined
Show Answer
Correct Answer: B [ 3.3% ]
Notes:
• Crude Birth Rate : Number of Births per 1000 population in a given year.
• Crude Death Rate : Number of Deaths per 1000 population in a given year.
• Natural Increase Rate of Population = Crude Birth Rate- Crude Death rate
