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 First Indian Special Economic Zone(SEZ)?
[A] Visakhapatnam SEZ
[B] Kandla SEZ
[C] Noida Special Economic Zone
[D] Cochin SEZ
Show Answer
Correct Answer: B [Kandla SEZ]
Notes:
The Kandla Special Economic Zone (KASEZ) was established in the year 1965 as the first Export Processing Zone in India. It is also the first special economic zone in India and in Asia. It is located in Kutch District of Gujarat.
2. The headquarters of the World Bank is located in:
[A] Switzerland
[B] Washington DC
[C] New York
[D] Paris
Show Answer
Correct Answer: B [Washington DC]
Notes:
The World Bank’s headquarters are in Washington, D.C. It is the largest development bank in the world and works through the World Bank Group, whose original institution, the IBRD, was established at the 1944 Bretton Woods Conference. The institution is closely associated with global development finance, but its main office has remained in Washington, D.C.
3. In which of the following countries, International Rice Research center is Located?
[A] Thailand
[B] Malaysia
[C] Philippines
[D] Indonesia
Show Answer
Correct Answer: C [Philippines]
Notes:
The International Rice Research Institute (IRRI) is headquartered in Philippines and has operating offices in seventeen countries. The Institute was originally established in the yeat 1960. It aims to reduce poverty and hunger, improve the health of rice farmers and consumers.
4. Which of the following Five year Plans set the lowest growth target?
[A] 1st
[B] 2nd
[C] 3rd
[D] 4th
Show Answer
Correct Answer: A [1st]
Notes:
The target annual GDP growth rate in the first five year plan was 2.1%, while the achieved growth rate was 3.6%.
5. Which statement defines RBI’s lender of last resort (LOLR) function?
[A] RBI meets all commercial bank demands, regardless of financial status
[B] RBI meets reasonable demands of solvent banks with temporary liquidity crises
[C] RBI lends exclusively to governments for budget deficits
[D] RBI offers LOLR facilities to all NBFCs without restrictions
Show Answer
Correct Answer: B [RBI meets reasonable demands of solvent banks with temporary liquidity crises]
Notes:
The Reserve Bank of India acts as lender of last resort by granting emergency funds to solvent commercial banks facing temporary liquidity shortages. RBI does not provide funds to insolvent banks. RBI charges a penal rate to discourage frequent usage. This function aims to avert bank runs and ensure overall banking system stability. RBI’s LOLR role traditionally applies to commercial banks, not all financial institutions.
6. In economy, which among the following can be measured by calculating concentration ratios?
[A] Devlopment
[B] Inflation
[C] Competition
[D] Social Security
Show Answer
Correct Answer: C [Competition]
Notes:
Competition is generally measured by calculating concentration ratios. Concentration ratios indicate whether an industry consists of a few large firms or many small firms. Two of the most commonly used metrics are the Herfindahl Hirschman Index (HHI) and the N-firm concentration ratio.
7. In the context of share markets in India, a public issue refers to which of the following?
[A] An offer of shares to the general public through a prospectus
[B] An issue of shares only to existing shareholders of the company
[C] An issue of shares to a select group of identified persons on a private basis
[D] A transfer of shares between two existing shareholders on the stock exchange
Show Answer
Correct Answer: A [An offer of shares to the general public through a prospectus]
Notes:
A public issue means an invitation to the public to subscribe to securities through a prospectus. In the Indian market, public issues are broadly classified into IPO and FPO. An IPO is the first public offer by an unlisted company, while an FPO is a later public offer by a listed company. Issues made only to existing shareholders are rights issues, and issues to selected persons on a private basis are private placements.
8. Which constitutional body recommends the distribution of tax proceeds between the Union and the States?
[A] Parliament
[B] Finance Commission
[C] Ministry of Finance
[D] Public Accounts Committee
Show Answer
Correct Answer: B [Finance Commission]
Notes:
Under Article 280 of the Constitution, the Finance Commission is constituted to make recommendations on the distribution of tax proceeds between the Union and the States, as well as the allocation among the States. It is a constitutional, advisory body and not a legislative authority. Parliament does not determine this vertical tax devolution directly; it acts through the constitutional framework and relevant budgetary and finance arrangements.
9. Kudremukh iron ore was historically exported from which port?
[A] Cochin
[B] Chennai
[C] Mangalore
[D] Karwar
Show Answer
Correct Answer: C [Mangalore]
Notes:
The Kudremukh Iron Ore Company Limited, formed in 1976 in Karnataka, transported mined ore via slurry pipeline to Panambur. Export operations used New Mangalore Port. Kudremukh mine ceased operations in 2006 after Supreme Court directive. KIOCL now exports pellets through Mangalore port. New Mangalore Port is a major port located in Karnataka on the Arabian Sea, operational since 1974.
10. Which is the largest oil refinery in India?
[A] Panipat Refinery
[B] Jamnagar Refinery
[C] Digboi Refinery
[D] Kochi Refinery
Show Answer
Correct Answer: B [Jamnagar Refinery]
Notes:
The Jamnagar Refinery is owned by Reliance Industries and is located in Jamnagar, Gujarat. Its crude oil processing capacity is 1.4 million barrels per day. Commissioned in 1999, the refinery complex includes both domestic and export-oriented refinery units. It has the highest Nelson Complexity Index in India, standing at 21.1.
