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 among the following would most likely follow if the Reserve Bank of India effects selling of the securities?
[A] The cash resources at the disposal of the commercial banks increase.
[B] The cash resources at the disposal of the commercial banks get diminished.
[C] The cash resources of the commercial banks remain unchanged
[D] None of the above
Show Answer
Correct Answer: B [The cash resources at the disposal of the commercial banks get diminished.]
Notes:
The Reserve Bank of India starts selling the Government Securities, on behalf of the Government. Either the commercial banks or retail investors buy the securities, resulting in decrease of cash resources at the disposal of the commercial banks.
2. Whose approval is enough to withdraw money from the Consolidated Fund of India?
[A] Only President
[B] Both Parliament and President
[C] Only Parliament
[D] Either Parliament or President
Show Answer
Correct Answer: C [Only Parliament]
Notes:
The Consolidated Fund of India was constituted under Article 266(1) of the Indian Constitution in 1950. Only after the enactment of an Appropriation Act by Parliament can funds be withdrawn from this Fund. The President of India cannot authorize withdrawal without parliamentary sanction. Expenditure from the Consolidated Fund includes government salaries, pensions, and all government-managed programs, all subject to prior parliamentary approval as stipulated in Article 114.
3. Which among the following is the main function of Agricultural Finance Corporation Limited ?
[A] consultancy services in the field of agriculture
[B] social service organization
[C] Agricultural commodities exchange
[D] Agricultural cooperative society
Show Answer
Correct Answer: A [consultancy services in the field of agriculture]
Notes:
Agricultural Finance Corporation Limited (AFC) is a development organization that provides consulting, advisory, and implementation support for agriculture and rural development in India. AFC was established in 1968 by India’s banking industry.
4. What percentage of global oil production is attributed to OPEC?
[A] 25%
[B] 35%
[C] 40%
[D] 55%
Show Answer
Correct Answer: C [40%]
Notes:
OPEC accounted for about 40% of global crude oil production as of 2023. OPEC’s production ranged near 34 million barrels per day in 2023. The organization also holds over 70% of the world’s proven oil reserves. OPEC was founded in 1960 in Baghdad. Major OPEC members include Saudi Arabia, Iran, Iraq, and Venezuela.
5. Which of these is not a liability of a commercial bank?
[A] Time Deposits
[B] Borrowing from saving banks
[C] Security Holdings
[D] Demand deposits
Show Answer
Correct Answer: C [Security Holdings]
Notes:
Security holdings are classified as assets on a commercial bank’s balance sheet according to Reserve Bank of India regulations. Security holdings include investments in government securities, shares, bonds, debentures, or other instruments. Liabilities include deposits like demand and time deposits and borrowings from other banks. The Banking Regulation Act, 1949, specifies asset and liability classifications for scheduled commercial banks in India.
6. Which is NOT a source of government tax revenue?
[A] Excise taxes on gasoline and cigarettes
[B] Property taxes
[C] Customs duties and tariffs
[D] Fees and charges for government services
Show Answer
Correct Answer: D [Fees and charges for government services]
Notes:
Fees and charges for government services refer to user charges for specific services like public utilities, hospital fees, and tolls. These are not taxes, which are compulsory payments. Tax revenue sources include excise taxes, property taxes, and customs duties. User charges represent voluntary payments for direct services and are classified as non-tax revenue.
7. Which among the following does not come under the monetary policy for regulating the economy?
[A] Discount rate
[B] Government spending
[C] reserve requirement
[D] Open market Operations
Show Answer
Correct Answer: B [Government spending]
Notes:
Government spending refers to the money spent by the government or public sector on the acquisition of goods and services such as education, healthcare, social protection, defence etc. It does not come under monetary policy.
8. Which is classified as an economic overhead?
[A] Hospitals
[B] Schools
[C] Sanitation facilities
[D] Road and Railways
Show Answer
Correct Answer: D [Road and Railways]
Notes:
Road and railways are economic overheads as they provide essential infrastructure for transportation and movement of goods, stimulating economic activity. Hospitals, schools, and sanitation are social overheads, catering mainly to health, education, and hygiene rather than direct economic productivity.
9. Which are the top three debtors of the World Bank (IBRD)?
[A] India, Brazil, Turkey
[B] Brazil, India, Mexico
[C] India, Turkey, Indonesia
[D] Brazil, Turkey, Philippines
Show Answer
Correct Answer: B [Brazil, India, Mexico]
Notes:
Brazil, India, and Mexico have the highest outstanding IBRD loan commitments as per recent World Bank data. Brazil’s net IBRD commitments lead global figures. India was among the top recipients in 2023, borrowing over 4.3 billion U.S. dollars. Mexico also remains a principal IBRD borrower for infrastructure and development projects in recent years. These three countries routinely top IBRD debt statistics globally.
10. Who among the following was the architect of second five year plan ?
[A] Jawahar Lal Nehru
[B] C D Deshmukh
[C] P C Mahalanobis
[D] Subimal Datt
Show Answer
Correct Answer: C [P C Mahalanobis]
Notes:
Prasantha Chandra Mahalanobis or P. C. Mahalanobis (1893-1972) was the first Indian statistician to receive world recognition. In 1933, Mahalanobis founded the first Indian statistical journal Sankhya, along the lines of Biometrika, which had inspired him greatly. He was architect of India’s second five year plan and due to this second plan is known as Mahalanobis model.
