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. Who among the following is called father of Economics?
[A] David Hume
[B] Lamarck
[C] Adam Smith
[D] John Stuart Mill
Show Answer
Correct Answer: C [Adam Smith]
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.
2. Ad valorem tax is levied on which of the following?
[A] The price of a commodity
[B] The value added to a product
[C] The assessed value of property or transaction
[D] The unit of the commodity
Show Answer
Correct Answer: C [The assessed value of property or transaction]
Notes:
Ad valorem tax is calculated as a percentage of the assessed value of property or transaction. Sales tax, property tax, and import duties are common examples. This tax is proportional to the value, not a fixed amount per unit. The term originates from Latin meaning “according to value.” The assessed value is used to determine the actual tax liability.
3. Consider the following statements regarding Cash Management Bills (CMBs):
- Cash Management Bills are short-term money market instruments with maturity less than 91 days.
- Cash Management Bills are issued at a discount to face value and redeemed at face value upon maturity.
- Cash Management Bills are issued by the Reserve Bank of India on behalf of the Central Government.
- Cash Management Bills follow a fixed, pre-determined issuance schedule like Treasury Bills.
Which of the above statements is / are correct?
[A] Only 1 and 2 are correct
[B] Only 1, 2, and 3 are correct
[C] All are correct
[D] Only 2 and 3 are correct
Show Answer
Correct Answer: B [Only 1, 2, and 3 are correct]
Notes:
Statements 1, 2, and 3 are correct. Cash Management Bills (CMBs) are short-term securities with maturities less than 91 days, issued at a discount and redeemed at face value, by the RBI on behalf of the Central Government. Statement 4 is incorrect; unlike Treasury Bills, CMBs are issued as per requirement, not on a fixed schedule, enabling flexible management of government cash flows.
4. The negotiable instruments are passed freely from one party to another almost in the same way as money. To be negotiable, a promissory note must include a / an:
[A] conditional promise to pay on demand or at a definite time
[B] unconditional promise to pay on demand or at an indefinite time
[C] unconditional promise to pay on demand or at a definite time
[D] conditional promise to pay on demand or at an indefinite time
Show Answer
Correct Answer: C [unconditional promise to pay on demand or at a definite time]
Notes:
A promissory note is a negotiable instrument only when it contains an unconditional promise to pay a certain sum of money. The payment may be made on demand or at a definite time, but it cannot depend on any condition. This is a basic requirement under negotiable instruments law. Therefore, option 3 correctly states the essential feature of negotiability in a promissory note.
5. Imposing an Import quota helps in__:
- correcting unfavourable balance of payments
- improving balance of trade
- protecting domestic industries
- promoting exports
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 1 & 3
[C] Only 1, 2 & 3
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: C [ Only 1, 2 & 3 ]
Notes:
An import restriction imposed on imported goods, to reduce the quantity of certain goods allowed into a country from a particular exporting country, in a stated period. The purpose may be to conserve foreign currency, if there is an unfavourable balance of payments, or to protect the home market against foreign competition (see protective duty). Quotas are usually enforced by means of import licenses.
6. World Economic Outlook is a survey conducted and published by the________?
[A] World Economic Forum
[B] World Bank
[C] World Trade Organization
[D] International Monetary Fund
Show Answer
Correct Answer: D [ International Monetary Fund ]
Notes:
World Economic Outlook is a survey conducted and published by the International Monetary Fund.
7. Which of the following is / are correct statements about “Adopt a Heritage Scheme”?
- It is an initiative under Ministry of Culture
- Under this scheme, government has appointed private as well as public companies as “Monument Mitras” to boost heritage tourism in the country
Select the correct option from the codes given below:
[A] Only 1
[B] Only 2
[C] Both 1 & 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: B [Only 2 ]
Notes:
First statement is incorrect. The “Adopt a Heritage Scheme” is an initiative under Ministry of Tourism. Second statement is correct. Under this scheme, the government has appointed private as well as public companies as “Monument Mitras” for making heritage tourism more sustainable through conservation and development. The short-listed companies, to be called Monument Mitras, are from various sectors such as hospitality, travel, and banking.
8. Which country is the main competitor of the Indian jute industry?
[A] Japan
[B] China
[C] Sri Lanka
[D] Bangladesh
Show Answer
Correct Answer: D [Bangladesh]
Notes:
Bangladesh ranks as the world’s second-largest jute producer after India. Bangladesh is the leading global exporter of raw jute and jute products. In 2023, Bangladesh exported about $162 million worth of jute, with India as the primary market. The jute industries of Bangladesh and India dominate global jute supply, with Bangladesh’s exports competing directly with Indian products in international markets.
9. Which of the economic system have the shortcoming of overproduction and over-exploitation of workers?
[A] Socialist system
[B] Mixed system
[C] Market system
[D] Traditional system
Show Answer
Correct Answer: C [Market system]
Notes:
In the market system or the capitalist system, there is always a risk of overexploitation of workers for the profits of the companies. A profit is the main motive of this type of economy. It also may lead to the overproduction of goods since there are no regulations. This can also be attributed to the fact that the workers have low wages and hence cannot afford to consume all the products that are being manufactured.
10. Who among the following prepared the first national income estimate in India?
[A] Lord Rippon
[B] Dadabhai Naoroji
[C] Lord Macaulay
[D] C.R. Das
Show Answer
Correct Answer: B [Dadabhai Naoroji]
Notes:
Dadabhai Naoroji is credited with preparing the first national income estimate in India in 1876. His early work on India’s income and poverty became important in the study of Indian economics and nationalist thought. The other options are not associated with this estimate.
