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 imposes a greater burden (relative to resources) on the poor than on the rich ?
[A] Progressive tax
[B] Regressive Tax
[C] Lump Sum tax
[D] Proportional tax
Show Answer
Correct Answer: B [Regressive Tax]
Notes:
A regressive tax is the one in which tax rate decreases as the amount subject to taxation increases; and the tax rate progresses from high to low. The lowest amount is subject to higher taxation and this leads to individuals with low income bear the highest burden of regressive taxes. Such tax does not take into account the ability to pay.
2. From the following bring out the one which 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:
The correct answer is “Security Holdings.” Security holdings refer to investments in stocks, bonds, or other financial instruments, which are assets for a bank. In contrast, time deposits, borrowing from savings banks, and demand deposits are liabilities, as they represent money the bank owes to depositors. Commercial banks typically hold a diverse portfolio of securities to manage risk and generate income.
3. The SPS Agreement under the WTO is most concerned with which among the following?
[A] Trade of plant genetic materials
[B] Phytosanitary Measures
[C] Technical Barriers to Trade
[D] Trade in Fertilizers
Show Answer
Correct Answer: B [ Phytosanitary Measures ]
Notes:
The Agreement on the Application of Sanitary and Phytosanitary Measures – also known as the SPS Agreement is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the beginning of 1995. Under the SPS agreement, the WTO sets constraints on member-states’ policies relating to food safety (bacterial contaminants, pesticides, inspection and labeling) as well as animal and plant health (phytosanitation) with respect to imported pests and diseases. The SPS agreement is closely linked to the Agreement on Technical Barriers to Trade, which was signed in the same year and has similar goals.
4. Consider the following:
- Subsidies come under plan expenditures of the government
- Interest Payments and debt servicing come under plan expenditures of the government
- Defence comes under plan expenditures of the government
Select the correct option from codes given below:
[A] 3 only
[B] 2 and 3
[C] 1,2 and 3
[D] None of the above are correct
Show Answer
Correct Answer: D [None of the above are correct]
Notes:
None of the above statements is correct as all the given options come under non plan expenditure of the government.
5. Which of the following statements is correct about the Countervailing duty?
[A] It is the tariff levied on imported goods to offset subsidies offered by the exporting country to its producers
[B] It is the tariff imposed on exported goods to reduce exports and increase the domestic supply
[C] It is the tax levied on revenues received by a corporation, even if it does not make any profit
[D] It is the tax levied on purchase or sale of various financial products like stocks, derivatives, mutual funds etc
Show Answer
Correct Answer: A [ It is the tariff levied on imported goods to offset subsidies offered by the exporting country to its producers ]
Notes:
First option is the correct answer
Countervailing duty is a tariff imposed on imported goods to offset the subsidies offered by the exporting country to its producers. It is imposed to provide level playing field to domestic producers and foreign producers.
6. Which state in India is the largest producer of salt?
[A] Kerala
[B] Andhra Pradesh
[C] Gujarat
[D] Maharashtra
Show Answer
Correct Answer: C [Gujarat]
Notes:
Gujarat is the largest producer of salt in India because of its extensive dry coast. Gujarat accounts for 77% of the salt produced in our country. Salt industries of Gujarat are thriving in Surat, Kutch, Bhavnagar, Rajkot, Anand, etc.
7. Which among the following is a direct tax?
[A] Corporate tax
[B] Wealth tax
[C] Income tax
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Direct tax is a government levy on the income, property, or wealth of people or companies. A direct tax is borne entirely by the entity that pays it, and cannot be passed on to another entity. Examples include corporation tax, income tax, and social security contributions.
8. Which of the following is related to the rupee exchange rate?
[A] Pound Sterling
[B] Dollar
[C] Franc
[D] Basket of currencies
Show Answer
Correct Answer: D [Basket of currencies]
Notes:
The rupee exchange rate is related to the basket of currencies. Basket of currencies for international currency exchange rates includes five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
9. Which among the following is part of Macroeconomics?
[A] Investment of households
[B] Wages of a person
[C] How to produce good
[D] Aggregate economic activity
Show Answer
Correct Answer: D [Aggregate economic activity]
Notes:
Macroeconomics is a branch of economics that studies how an overall economy the market systems that operate on a large scale behaves. It deals with the performance, structure, behavior, and decision-making of an economy as a whole. Its features are Employment, national income, poverty etc.
10. Which economist made a lasting impact on Japan following the 1868 Meiji revolution?
[A] Francis Fukuyama
[B] Fukuzawa Yukichi
[C] Takero Doi
[D] None of the above
Show Answer
Correct Answer: B [Fukuzawa Yukichi]
Notes:
FUKUZAWA YUKICHI (1834-1901) was an author, entrepreneur, and political theorist. Yukichi’s ideas made a lasting impact on Japan following the 1868 Meiji Revolution, which saw the restoration of imperial rule in Japan and set in train its economic modernization.
