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 is a correct definition of Dollarization?
[A] when the inhabitants of a country use US dollars in parallel to or instead of the domestic currency
[B] when the inhabitants of a country use only US Dollars instead of a domestic currency
[C] when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency
[D] None of the above

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2. Which tools and goals define fiscal policy?
[A] Managing interest rates and money supply
[B] Taxation and government spending to influence economy
[C] Open market operations for bank reserves
[D] Setting reserve requirements for banks

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3. Consider the following items with respect to the classification of “Total Food Grains” in India:

  1. Rice
  2. Wheat
  3. Coarse cereals (such as millet, barley, sorghum)
  4. Pulses (including lentils, chickpeas)

Which of the above are included in the definition of Total Food Grains by Indian agricultural standards?

[A] Only 1 and 2
[B] 1, 2, 3 and 4
[C] 1, 2 and 3
[D] 1, 2 and 4

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4. What is it called when government prints money to cover budget gaps?
[A] Fiscal Deficit
[B] Fiscal Stimulation
[C] Deficit Financing
[D] Differential Accumulation

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5. Consider the following:

  1. Allotting of the shares of net proceeds of taxes
  2. Laying down principles governing grants in aid
  3. Looking into the financial relations between the central government and the state Governments

The above mentioned functions are carried out by which among the following?

[A] Cabinet Committee on Economic Affairs
[B] National Development Council
[C] Finance Commission
[D] NITI Aayog

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6. A Bank opened in Special Economic Zones in India comes under which among the following ?
[A] International Banking
[B] Domestic Banking
[C] Offshore Banking
[D] National banking

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7. The power of banks to expand deposits through lending is called:
[A] Capital Expansion
[B] Credit Expansion
[C] Credit Control
[D] Credit Creation

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8. The act of simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms is called _?
[A] Arbitrage
[B] Spot market
[C] Ambush marketing
[D] Futures market

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9. Which institution has the highest Priority Sector Lending norm in India as of 2026?
[A] Small Finance Banks
[B] Regional Rural Banks
[C] Domestic Scheduled Commercial Banks
[D] Urban Co-operative Banks

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10. What is a golden share in share market parlance?
[A] Share with highest profit from price rise
[B] Share with special voting and veto rights
[C] Share sold before market crash
[D] First share subscribed in an IPO

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