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. In an inflationary trend, the pricing of the bank products are:
[A] At increasing trend
[B] At decreasing trend
[C] No relevance of Inflation
[D] Constant
Show Answer
Correct Answer: A [At increasing trend]
Notes:
Inflation is the decline of purchasing power of a particular currency over time. It is reflected as an increase in general prices. As the demand for credit increases, the pricing of bank products also increases.
2. Which among the following is the branch of economics that deals with the performance, structure, and behavior of the economy of the entire community, either a nation, a region, or the entire world?
[A] Heterodox approaches
[B] Micro Economics
[C] Macro Economics
[D] All of the above
Show Answer
Correct Answer: C [Macro Economics]
Notes:
Macroeconomics is a branch of economics, which deals with how an economy functions on a large scale. It deals with the structure, and behavior of the economy of either a region, country or the whole world.
3. In which of the following situations the “Investment” will increase?
[A] Increase in output and decrease in capital stock
[B] decrease in output and increase in capital stock
[C] Increase in output and increase in capital stock
[D] decrease in output and decrease in capital stock
Show Answer
Correct Answer: C [Increase in output and increase in capital stock]
Notes:
If the capital stock rises, the real interest rate falls. The fall in real interest rate will make the people to start saving more. It will also increase the investment. Increase in output by increasing productivity will also increase the capital and increase investment.
4. Which among the following ratios correctly denotes Money Multiplier?
[A] M3: M0
[B] M1: M3
[C] M3: M1
[D] M1: M0
Show Answer
Correct Answer: A [M3: M0]
Notes:
Money multiplier is expressed as a ratio between broad money (M3) and Reserve money (M0). It refers to how an initial deposit can lead to a bigger final increase in the total money supply.
5. With which of the following WIPO is related to ?
[A] Investment
[B] Intellectual property
[C] International trade
[D] Indigenous people
Show Answer
Correct Answer: B [Intellectual property]
Notes:
WIPO-World Intellectual Property Organization
6. Which among the following plan document has a subtitle ” Inclusive growth” ?
[A] 10th Five year Plan
[B] 11th Five year Plan
[C] National Solar Mission
[D] Bhart Nirman
Show Answer
Correct Answer: B [11th Five year Plan]
Notes:
The correct answer is the 11th Five Year Plan. Launched in 2007, it emphasized “Inclusive Growth” to address poverty and inequality in India. This plan aimed to enhance social and economic development, focusing on sectors like education, health, and rural development. The 11th Plan set a target of 9% GDP growth, which indicates the importance of inclusive policies for sustainable development.
7. The name of Sir Chintaman Dwarkanath Deshmukh is special in the Indian Banking Sector. He was __________?
[A] First Indian to establish a Bank in India
[B] First Indian to be chairman of State Bank of India
[C] First Indian to be governor of the Reserve Bank of India (RBI),
[D] Pioneer in Indian Commercial Banking
Show Answer
Correct Answer: C [First Indian to be governor of the Reserve Bank of India (RBI),]
Notes:
Sir Chintaman Dwarkanath Deshmukh was the first Indian to be the governor of the Reserve Bank of India (RBI), serving from 1943 to 1949. He played a crucial role in shaping India’s monetary policy post-independence and was instrumental in establishing the RBI as a key institution in the Indian economy. Deshmukh was also a prominent figure in the Indian banking sector, contributing to various financial reforms.
8. Bombay Plan was presented in which year?
[A] 1934
[B] 1940
[C] 1942
[D] 1944
Show Answer
Correct Answer: D [1944]
Notes:
In 1944 Eight Industrialists of Bombay including Mr. JRD Tata, GD Birla, Purshottamdas Thakurdas , Lala Shriram, kasturbhai lalbhai, AD Shroff , Ardeshir Dalal, & John Mathai working together prepared “A Brief Memorandum Outlining a Plan of Economic Development for India” which was popularly known as Bombay Plan. This plan envisaged doubling the per capita income in 15 years and tripling the national income during this period.
9. Which among the following will not be an entry in the Profit and Loss account of a bank ?
[A] Interest expense on deposits
[B] Interest earned on advances.
[C] Profit/loss on sale of assets
[D] Income from investment banking related activities
Show Answer
Correct Answer: C [Profit/loss on sale of assets]
Notes:
Profit/loss on sale of assets is an entry in the manufacturing company` s P & L account under the heading other income. In banks the other income includes income from distribution of financial products, income from investment banking related activities, treasury gains and other fee incomes
10. Which among the following group best fits in a definition of a ‘shadow banking system’?
[A] Scheduled Commercial Banks, Non Banking Finance Companies, Hedge Funds
[B] Non banking Finance Companies, Investment banks, Hedge funds
[C] Scheduled Commercial Banks, Private Banks and NBFC’s
[D] Scheduled Commercial banks, Cooperative Banks and Investment Banks
Show Answer
Correct Answer: B [Non banking Finance Companies, Investment banks, Hedge funds]
Notes:
The correct answer is “Non Banking Finance Companies, Investment banks, Hedge Funds.” Shadow banking refers to financial intermediaries that operate outside traditional banking regulations. Non-Banking Finance Companies (NBFCs) provide credit and financial services without being classified as banks. Investment banks engage in activities like underwriting and trading, while hedge funds pool capital to invest in various assets, often using leverage. Together, they form a system that can create credit and liquidity similar to traditional banks but without the same regulatory oversight, which can lead to systemic risks.
