Indian Economy MCQs

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The Index of Eight Core Industries includes Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. Pharmaceuticals are not included in this index. The Index serves as an indicator for measuring the industrial performance in India, and is released monthly by the Ministry of Commerce and Industry since 2004.

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Ad valorem tariff is calculated on the basis of the value of the imported good, expressed as a percentage of such value. For example, an ad valorem tariff of 10% on an imported car worth US 10000 would lead to a requirement to pay US 1000 as customs duty.

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Stagflation refers to an economic situation where high inflation, stagnant economic growth, and elevated unemployment occur simultaneously. The term was coined in the 1960s. A notable period of stagflation happened during the 1970s oil crisis when global oil prices rose sharply. Policymakers find stagflation challenging because inflation and unemployment move in opposite directions to typical business cycles.

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In India, bank deposits that remain unclaimed or are not operated for 10 years or more are transferred by banks to the Depositor Education and Awareness Fund. The Reserve Bank of India framework requires banks to identify such inactive or unclaimed balances and follow the prescribed transfer process. This helps protect depositors’ money while keeping the funds traceable and available for lawful claims by the account holder or eligible claimant.

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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.

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Sikkim produces about 80% of India’s large cardamom. It is grown mainly in the Himalayan region of Sikkim due to the favorable climate and altitude. Sikkim’s production reached approximately 5.591 thousand tonnes in 2025. The government initiative “Mero Alaichi, Mero Dhan” supports cardamom cultivation in Sikkim. Assam, Gujarat, and Kerala do not match Sikkim’s output in this crop.

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Fiscal policy uses government taxation and spending to affect economic growth, employment, and inflation. Main tools are tax adjustments and expenditure management. These decisions are made through the government’s annual budget process. Fiscal policy is distinguished from monetary policy, which is implemented by central banks using instruments such as interest rates, reserve requirements, and open market operations.

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The Integrated Action Plan (IAP) is aimed at bridging the development deficit in the extremely backward areas that are affected by Left Wing Extremism.

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Economic growth results in higher disposable income available with the consumers which increases the overall demand along with the supply available for the consumers. This increase in demand spurs inflation, which eventually becomes a necessary evil for a growing economy.

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An open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks. The central bank can either buy or sell government bonds in the open market.