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. An investor or speculator who subscribes to a new issue with the intention of selling them soon after allotment to realize a quick profit is called?
[A] Stag
[B] Tall
[C] Bull
[D] Bear
Show Answer
Correct Answer: A [Stag]
Notes:
The term stag means a speculator who buys and sells stocks in short timeframes to make quick profits. The motove of stag is to make profit quickly on a fast moving trend, rather than buying and holding for the long run.
3. Which of the following statements best describes a progressive tax system?
[A] The tax rate decreases as the taxable amount increases
[B] The tax rate stays the same regardless of the taxable amount
[C] The tax rate increases as the taxable amount increases
[D] The tax rate is randomly determined
Show Answer
Correct Answer: C [The tax rate increases as the taxable amount increases]
Notes:
In a progressive tax system, higher income earners pay a higher tax rate compared to those who earn less. This is based on the assumption that individuals who earn more have the ability and the capacity to pay more taxes. Most income tax systems in the world are progressive, including the United States, Canada, and the United Kingdom.
4. The “Service area Approach” was an strategy launched to improve which of the following?
[A] Micro, Small and medium Enterprising
[B] Unorganized Sector
[C] Rural lending
[D] Urban Industrial Lending
Show Answer
Correct Answer: C [Rural lending]
Notes:
The “Service Area Approach” was introduced in 1989 by the Reserve Bank of India to enhance rural lending. It aimed to allocate specific geographical areas to banks, ensuring that credit and financial services reached underserved rural populations. This strategy was part of broader efforts to promote financial inclusion and support rural development, addressing the needs of agriculture and small enterprises.
5. Which among the following finds highest weight age in the Index of Industrial Production?
[A] Electricity
[B] Steel Industry
[C] Refinery Products
[D] Coal
Show Answer
Correct Answer: C [Refinery Products]
Notes:
The Refinery products industry has the highest weight of 28.04% in the IIP. Steel industry has the second highest weightage of 17.92%. Electricity has a weight of 19.85%, which is the third highest.
6. The concept of “Cartelization” is predominantly associated with which of the following?
[A] Small Traders
[B] Big Traders
[C] Small Investors
[D] Big Investors
Show Answer
Correct Answer: B [Big Traders]
Notes:
Cartelization primarily refers to a practice where large traders collude to control prices, limit production or hinder competition. It’s considered an illegal act in numerous countries as it fundamentally undermines free market principles. A well-known instance of a cartel is the Organization of the Petroleum Exporting Countries (OPEC), which dictates oil production among its members to sway prices. The existence of cartels often leads to inflated prices for consumers and diminishes overall market efficiency.
7. The negotiable instruments are passed freely from one party to another almost in the same way as money. To be negotiable, the letter of credit 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 a indefinite time
Show Answer
Correct Answer: A [ conditional promise to pay on demand or at a definite time ]
Notes:
To be negotiable, the letter of credit must include an unconditional promise to pay on demand or at a definite time. The LC is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met. In it all parties deal in documents.
8. The Unified Package Insurance Scheme aims at providing:
[A] government-backed Life insurance cover
[B] financial protection to citizens associated in agriculture sector
[C] government-backed accidental insurance cover
[D] credit linked subsidy for first-time home buyers
Show Answer
Correct Answer: B [financial protection to citizens associated in agriculture sector]
Notes:
Unified Package Insurance Scheme aims at providing financial protection to citizens associated in agriculture sector, thereby ensuring food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from financial risks. The cover will be for one full year except for Crop Insurance (which will be bi-annual separately for Kharif and Rabi seasons) renewable from year to year.
9. Natural Gas is one of the materials used in making of Fertilizers. Which among the following is the function of Natural gas in production of Fertilizers?
[A] As a fuel, to supply heat
[B] As a Reducing agent
[C] As a catalyst to produce complex fertilizers
[D] As a feedstock for the production of ammonia
Show Answer
Correct Answer: D [As a feedstock for the production of ammonia]
Notes:
Natural gas, essentially methane, is upgraded by combination with nitrogen from the air to form nitrogen fertilizer. 80% of the gas is used as feedstock for fertilizer while 20% is used for heating the process and producing electricity.
10. Which of the following banks is also known as I.B.R.D.?
[A] International Bank
[B] Asian Development Bank
[C] Bank of America
[D] World Bank
Show Answer
Correct Answer: D [World Bank]
Notes:
The International Bank for Reconstruction and Development is an international financial institution that offers loans to middle-income developing countries. The IBRD is the first of five member institutions that compose the World Bank Group.
