Indian Economy MCQs

Notes:
Adam smith is considered as father of Modern Economics. In his book “The nature & causes of wealth of the Nation’s 1776, he has described economics as science of wealth. According to him economy is the study of wealth only and it deals with its production and consumption. Only material goods which are scarce and useful are wealth.

Notes:
When the market is in equilibrium, and when the demand and supply of a commodity increase by an equal absolute amount, the market price will not increase, rather it will remain stable.

Notes:
David Ricardo, an English classical economist, developed the law of rent in 1809. He presented the law in his book On the Principles of Political Economy and Taxation in 1821.
Ricardo’s theory defined rent as the portion of the earth’s produce that is paid to the landlord for the original and indestructible powers of the soil. In other words, rent is the price paid for the use of land.
Ricardo developed his theory to explain the origin and nature of economic rent. He used the economy and rent to analyze the large rise in corn and land prices during the Napoleonic wars (1805-1815).
The term “Ricardian rent” comes from Ricardo’s theory.

Notes:
The Competition Commission of India (CCI) was set up to replace the anachronistic Monopolies and Restrictive Trade Practices Commission (MRTPC). It was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. It has one chairman and six members. It is the youngest and the only cross-sector regulator in India.

Notes:
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 NOSTRO account is a bank account that a domestic bank holds in a foreign country in the currency of that country. The term is derived from the Latin word meaning “ours.” For Union Bank of India, holding an account with Citibank in New York in US dollars constitutes a NOSTRO account. Such accounts are used for international transactions and settlements.

Notes:
Nylon fiber is a synthetic polymer regulated under petrochemicals. The Department of Chemicals and Petrochemicals operates under the Ministry of Chemicals and Fertilizers. The ministry monitors petrochemicals and synthetic fiber industries in India. This ministry administers policies, development, and regulation of nylon production and trade. The department was previously under the Ministry of Petroleum until 1991, then reassigned.

Notes:
Udyami Helpline with number 1800 180 6763 is a Call Centre of Ministry of Micro, Small and Medium Enterprises (MSME), Government of India. It was launched in 2010 to work as a single point facility for MSMEs needing different kinds of information and accessibility of Banks and other MSME-related organisations.

Notes:
Foreign Portfolio Investment refers to investments in securities like stocks and bonds by foreign investors. FPI is highly liquid and can be withdrawn quickly. FPI inflows and outflows are sensitive to global and domestic financial conditions. Sudden withdrawal of FPI causes market volatility. FPI is termed “hot money” compared to FDI, which involves long-term capital commitments. FPI contributed to major capital outflows during financial crises.

Notes:
Parliament decides the allocation of tax shares between Union and States as per Articles 270 and 272 of the Constitution. Parliament enacts laws based on recommendations from the Finance Commission, such as the 16th Finance Commission’s recommendation of a 41% share to States for 2026–31. The Ministry of Finance implements these decisions after they are legislated by Parliament.