Indian Economy MCQs

Notes:
In India, the responsibility for designing, minting and issuing coins rests with the Government of India. The Reserve Bank of India does not mint coins; it only distributes them through its issue offices and the banking system. This arrangement is provided under the Coinage Act, 2011, which governs coinage in India. Hence, the correct answer is Government of India.

Notes:
The BSE SENSEX consists of 30 large, actively traded stocks. As of January 2026, BSE’s total market capitalization was approximately $5,001.331 billion. Historically, SENSEX 30 stocks account for around 30% of the BSE’s total market capitalization. The SENSEX was established in 1986 and is the primary benchmark index of the Bombay Stock Exchange.

Notes:
Penny stocks are low-priced shares, usually of small companies, that are considered highly speculative and risky. They often have low liquidity, wide price swings, and limited public information, which makes them vulnerable to sharp gains or losses. The term refers to the price and risk profile of the stock, not to whether it is listed on a particular exchange. Hence, penny stock is the correct answer.

Notes:
Economic growth results in higher disposable income available with the consumers which increases the overall demand along with the supply available for the consumers. This increase in demand spurs inflation, which eventually becomes a necessary evil for a growing economy.

Notes:
The FRBM Act, 2003 was designed to promote fiscal discipline by laying down targets such as eliminating revenue deficit, reducing fiscal deficit, and restricting direct borrowing from the RBI except in specified situations. It also provided for monitoring of contingent liabilities and related fiscal parameters. However, it did not prescribe elimination of the primary deficit as a statutory target. Therefore, option 2 is the correct answer.

Notes:
Coastal headlands and islands of Peru, especially the Chincha Islands, are known for rich guano deposits. By 1250 CE, the Chincha Kingdom harvested seabird guano from these islands for agricultural fertilizer. Guano collection continued as a major economic activity through the colonial era. The Humboldt Current supports abundant seabird populations that produce the guano deposits.

Notes:
M3 consists of currency with the public, demand deposits, and time deposits with banks. The Reserve Bank of India identifies M3 as broad money. Since 1977, the RBI uses M3 as the main monetary aggregate. The RBI publishes weekly data on M3 in its statistical supplements as of 2023.

Notes:
Shares outstanding equals total issued shares minus treasury shares. Treasury shares are shares repurchased by the company and held in its treasury. Shares outstanding are used in calculating market capitalization and earnings per share. Only shares held by external shareholders are considered outstanding. This figure changes when the company buys back or issues new shares.

Notes:
The guiding principle of the Most Favoured Nation (MFN) concept is “non-discrimination among trading partners.” This principle, established in international trade agreements, ensures that any favorable trading terms offered by one country to another must be extended to all other trading partners. This concept is a cornerstone of the World Trade Organization (WTO) framework, promoting equality and preventing trade discrimination. The MFN principle aims to create a level playing field in international trade, fostering global economic cooperation.

Notes:
The two presses of Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) are located at Mysore and Salboni.