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 of the following pairings does not represent a set of complementary goods?
[A] Printers and Ink Cartridges
[B] Tea and Sugar
[C] Mobile Phones and SIM cards
[D] Tea and Coffee
Show Answer
Correct Answer: D [Tea and Coffee]
Notes:
Complementary goods, defined by their negative cross elasticity of demand, are products whose demand is influenced by one another. When the price of a good declines, the demand for its complementary good rises. Printers need ink cartridges, tea is often consumed with sugar, and mobile phones require SIM cards for operation. However, tea and coffee are substitutes, not complements, as they are consumed separately and often in place of one another, hence they are not complementary goods.
2. Tea, Coffee, Spices, Coconut, Rubber, Cardamom, Tobacco all together can be kept in which of the following group or groups?
[A] Food Crop
[B] Cash Crops
[C] Food & Cash Crops
[D] Plantation Crops
Show Answer
Correct Answer: D [Plantation Crops]
Notes:Plantation crops are crops that are grown on large farms, called plantations, and are typically grown for commercial purposes. These crops are often grown on a large scale using specialized techniques and equipment, and are typically exported to other countries for sale. Some examples of plantation crops include:
- Sugar cane: This is a tropical grass that is grown for its sweet, juicy stalks, which are used to make sugar.
- Rubber: This is a tree that is grown for its latex, which is used to make rubber.
- Tea: This is a bush that is grown for its leaves, which are used to make tea.
- Coffee: This is a shrub that is grown for its beans, which are used to make coffee.
- Coconut: This is a tree that is grown for its fruit, which is used to make coconut milk and oil.
- Banana: This is a tree that is grown for its fruit, which is a popular food around the world.
- Palm oil: This is a tree that is grown for its fruit, which is used to make palm oil.
- Tobacco: This is a plant that is grown for its leaves, which are used to make tobacco products such as cigarettes.
- Cotton: This is a plant that is grown for its fibers, which are used to make textiles and other products.
Plantation crops are an important source of income and employment for many countries, and they contribute significantly to the global economy.
3. Who was the first Deputy Chairman of India’s Planning Commission?
[A] V.T. Krishnamachari
[B] C.M. Trivedi
[C] Gulzari Lal Nanda
[D] Ashok Mehta
Show Answer
Correct Answer: C [Gulzari Lal Nanda]
Notes:
Gulzari Lal Nanda was the first Deputy Chairman of the Planning Commission and later served twice as interim Prime Minister of India. He played a key role in planning policy after independence.
4. Which currency did Keynes propose for global trade from 1940 to 1942?
[A] The Whuffie system managed by the International Trade Organization
[B] The Unitas managed by the World Monetary Authority
[C] The Bancor managed by the International Clearing Union
[D] The Terra managed by the Global Central Bank
Show Answer
Correct Answer: C [The Bancor managed by the International Clearing Union]
Notes:
Keynes and E. F. Schumacher proposed the Bancor as a supranational currency between 1940–1942. The International Clearing Union was suggested to manage its use in global trade. The Bancor proposal was presented by the United Kingdom at the Bretton Woods Conference in 1944. The concept was intended to prevent persistent surpluses or deficits among countries. The Bancor was not adopted; instead, the U.S. dollar was chosen as the main reserve currency.
5. Accession Tax is imposed on which type of receipt?
[A] New property acquired through purchase
[B] Gifts and bequests received over a lifetime
[C] Rented property income
[D] Business assets held by the deceased
Show Answer
Correct Answer: B [Gifts and bequests received over a lifetime]
Notes:
An accession tax is levied on individuals based on all gifts and inheritances received during their lifetime. The tax applies to the cumulative total rather than to the estate of the deceased. Accession tax rates generally increase as the total value of received gifts and bequests rises. This system differs from estate tax or inheritance tax models.
6. The minimum interest rate of a bank below which it is generally not viable to lend was known as ____ under India’s former internal benchmark lending-rate framework:
[A] Reserved Rate
[B] Base Rate
[C] Marginal Rate
[D] Prime Lending Rate
Show Answer
Correct Answer: B [Base Rate]
Notes:
In India’s former internal benchmark lending-rate system, the Base Rate was the minimum rate below which banks generally did not lend. It was introduced to bring greater transparency in loan pricing and served as the reference rate for many advances. Later, the Reserve Bank of India shifted new rupee loans to the MCLR framework from April 1, 2016, but the term Base Rate remains the correct answer for the former regime.
7. What does the greenshoe option allow underwriters to do during an IPO?
[A] Sell up to 15% additional shares beyond the original offering
[B] Record investor demands and change IPO pricing
[C] Purchase shares back from investors at a discount
[D] None of the above
Show Answer
Correct Answer: A [Sell up to 15% additional shares beyond the original offering]
Notes:
The greenshoe option is an IPO underwriting clause first used by Green Shoe Manufacturing Company. It allows underwriters to sell up to 15% extra shares above the original IPO amount to support share price stability and meet demand. The Securities and Exchange Commission permits this clause. The option helps underwriters stabilize prices by covering over-allotted shares in the aftermarket.
8. Imposing an Import quota helps in__:
- correcting unfavourable balance of payments
- improving balance of trade
- protecting domestic industries
- promoting exports
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 1 & 3
[C] Only 1, 2 & 3
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: C [ Only 1, 2 & 3 ]
Notes:
An import restriction imposed on imported goods, to reduce the quantity of certain goods allowed into a country from a particular exporting country, in a stated period. The purpose may be to conserve foreign currency, if there is an unfavourable balance of payments, or to protect the home market against foreign competition (see protective duty). Quotas are usually enforced by means of import licenses.
9. Which of the following is India’s first payments bank?
[A] Jio Payments Bank Ltd
[B] Paytm Payments Bank
[C] India Post Payments Bank
[D] Airtel Payments Bank
Show Answer
Correct Answer: D [ Airtel Payments Bank ]
Notes:
Fourth option is the correct answer. Airtel Payments Bank is India’s first payments bank.
10. RBI’s intervention to influence the exchange rate is known as what in India?
[A] Dirty Floats
[B] Managed Floats
[C] Fixed Floats
[D] Market Stabilization Floats
Show Answer
Correct Answer: B [Managed Floats]
Notes:
India has used a managed floating exchange rate regime since 1993. The Reserve Bank of India intervenes in the foreign exchange market to reduce excessive volatility. The exchange rate is mainly market-determined but subject to RBI intervention. The International Monetary Fund describes India’s regime as a managed float. RBI does not follow a fully fixed or fully floating rate policy.
