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. Rs. 100 notes are printed at which locations in India?
[A] Only Nashik and Dewas
[B] Mysore and Salboni only
[C] Noida and Hoshangabad
[D] All of the above locations
Show Answer
Correct Answer: D [All of the above locations]
Notes:
Currency notes of Rs. 100 are printed at four locations in India: Currency Note Press in Nashik (Maharashtra), Bank Note Press in Dewas (Madhya Pradesh), and Bharatiya Reserve Bank Note Mudran Ltd. presses in Mysore (Karnataka) and Salboni (West Bengal). Nashik and Dewas presses are operated by Security Printing and Minting Corporation of India Ltd. Mysore and Salboni presses are managed by BRBNMPL.
2. Which statement defines a balanced budget?
[A] Total expenditure exceeds total revenue
[B] Total revenue equals total expenditure
[C] Total revenue exceeds total expenditure
[D] Total revenue equals or exceeds expenditure
Show Answer
Correct Answer: B [Total revenue equals total expenditure]
Notes:
A balanced budget occurs when a government’s total revenue matches its total expenditure within a fiscal year. The concept is found in public finance literature and is used by various countries’ budgets. The Government of India’s budgets list balanced budgets when revenue and expenditure are equal with no deficit or surplus.
3. Unclaimed deposits are those not operated for how many years?
[A] 5 years or more
[B] 3 years or more
[C] 7 years or more
[D] 10 years or more
Show Answer
Correct Answer: A [5 years or more]
Notes:
Under the Banking Regulation Act, 1949, unclaimed deposits are defined as funds not operated for 10 years in India but commonly considered 5 years under US state dormancy laws. Indian Reserve Bank amendments in 2014 require banks to transfer such amounts to the Depositor Education and Awareness Fund after 10 years.
4. Who among the following declared the First Industrial Policy in the Post Independence Period?
[A] Jawahar lal Nehru
[B] Syama Prasad Mookerjee
[C] Bayya Suryanarayana Murthy
[D] Rafi Ahmed Kidwai
Show Answer
Correct Answer: B [Syama Prasad Mookerjee]
Notes:
In the year 1948, India’s first Industrial Policy Resolution was adopted. This resolution defined the roles of government in development of industries in independent India. This policy determined that India would follow a mixed economy model having both public and private enterprises.
5. Which of these is NOT an anti-inflationary monetary measure?
[A] Increasing central bank discount rate
[B] Raising Cash Reserve Ratio
[C] Implementing credit rationing policies
[D] Open market purchase of government securities
Show Answer
Correct Answer: D [Open market purchase of government securities]
Notes:
Open market purchase of government securities injects liquidity into the banking system. The Reserve Bank of India buys government securities to increase money supply. This is an expansionary policy used to stimulate economic growth. Anti-inflationary measures contract money supply. RBI uses open market sales, not purchases, to control inflation. Open market operations are conducted under Section 17 of the Reserve Bank of India Act, 1934.
6. Which monetary aggregate is defined as broad money in India?
[A] M1
[B] M2
[C] M3
[D] M4
Show Answer
Correct Answer: C [M3]
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.
7. If interest payments are subtracted from gross fiscal deficit, the remainder will be__:
[A] Revenue deficit
[B] Gross primary deficit
[C] Capital deficit
[D] Budgetary deficit
Show Answer
Correct Answer: B [ Gross primary deficit ]
Notes:
Primary deficit is the gross deficit which is obtained by subtracting interest payments from budget deficit of any country of a particular year. We need to know the value of primary deficit, while calculating the fiscal deficit. Alternative Definition of Primary Deficit Primary deficit corresponds to the net borrowing, which is required to meet the expenditure excluding the interest payment. Primary Deficit = (Fiscal Deficit – Interest Payment)
8. Which body maintains the International Harmonized System (HS) of goods?
[A] World Trade Organization (WTO)
[B] United Nations Conference on Trade and Development (UNCTAD)
[C] World Customs Organization (WCO)
[D] United Nations Statistics Division (UNSD)
Show Answer
Correct Answer: C [World Customs Organization (WCO)]
Notes:
The World Customs Organization (WCO), established in 1952 and headquartered in Brussels, Belgium, maintains and updates the Harmonized System (HS) of goods. The WCO has 185 member countries as of 2024. The Harmonized System Committee under WCO carries out revisions, usually every five years, to reflect changes in world trade, technology, and goods classification.
9. Who among the following is a banking corresponding agent?
[A] An authorized representative of bank who offer banking services in unbanked areas
[B] Any person who offer banking services in unbanked areas
[C] An authorized representative of bank who makes profits for banks
[D] None of the above
Show Answer
Correct Answer: A [An authorized representative of bank who offer banking services in unbanked areas]
Notes:
Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. BCs enable a bank to provide its limited range of banking services at low cost.
10. Which of the following is an alternative way of representing the production function?
[A] Average Product
[B] The Long Run
[C] Isoquant
[D] The Short Run
Show Answer
Correct Answer: C [Isoquant]
Notes:
An isoquant is a firm’s counterpart of the consumer’s indifference curve. An isoquant is a curve that shows all the combinations of inputs that yield the same level of output. ‘Iso’ means equal and ‘quant’ means quantity.
