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 among the following is the highest credit risk rating that can be awarded to any company by CRISIL?
[A] AAA
[B] AAA+
[C] AA+
[D] A++
Show Answer
Correct Answer: A [AAA]
Notes:
CRISIL was the first credit rating agency in India, formed in the year1988. In 2005, it became a subsidiary of American company S&P Global. The highest credit risk rating awarded to any company is ‘AAA’ and the lowest is ‘D’.
2. If the demand and supply of a commodity increase by an equal absolute amount, what will be the effect on market price?
[A] Increase
[B] Decrease
[C] Remain Stable
[D] First decrease then increase
Show Answer
Correct Answer: C [Remain Stable]
Notes:
When the market is in equilibrium, and when the demand and supply of a commodity increase by an equal absolute amount, the market price will not increase, rather it will remain stable.
3. A systematic record of all economic transactions completed between residents of a country and the rest of the world in a year is known as..?
[A] Net Capital Flow
[B] Balance of Payment
[C] Balance of Trade
[D] Absolute Flow
Show Answer
Correct Answer: B [Balance of Payment]
Notes:
The Balance of International payments or Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
The three main components of BoP are Current Account, Capital Account and Official Reserve Transactions
4. Which among the following bodies estimates the national income of India?
[A] Office of the Economic Advisor
[B] Ministry of Statistics
[C] Central Statistical Office
[D] Ministry of Finance
Show Answer
Correct Answer: C [Central Statistical Office]
Notes:
The Central Statistics Office (CSO) is a governmental agency in India under the Ministry of Statistics and Programme Implementation. It is responsible for estimating National Income, Index of Industrial Production and Consumer Price Indices.
5. Which among the following defines ‘currency depreciation” of a currency?
[A] Fall in the exchange rate of one currency in terms of other currencies
[B] Fall in the exchange rate of other currencies in terms of one currencies
[C] Decrease in the volume of a particular currency
[D] Increase in the exchange rate of a currency
Show Answer
Correct Answer: A [Fall in the exchange rate of one currency in terms of other currencies]
Notes:
Currency depreciation is the loss of value of a country’s currency with respect to one or more foreign reference currencies. This is a term used in floating exchange rate system, where the exchange rates of a currency are market driven and not fixed by the country’s central bank.
6. When a person has a saving account in the bank , the bank assumes the position of ___?
[A] Debtor
[B] Creditor
[C] Agency
[D] Depositor
Show Answer
Correct Answer: A [Debtor]
Notes:
please note bank functions as an agent or agency when it buys or sells securities on behalf of the customer or collects and makes payment on behalf of the customer
7. 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.
8. Who among the following was the architect of second five year plan ?
[A] Jawahar Lal Nehru
[B] C D Deshmukh
[C] P C Mahalanobis
[D] Subimal Datt
Show Answer
Correct Answer: C [P C Mahalanobis]
Notes:
Prasantha Chandra Mahalanobis or P. C. Mahalanobis (1893-1972) was the first Indian statistician to receive world recognition. In 1933, Mahalanobis founded the first Indian statistical journal Sankhya, along the lines of Biometrika, which had inspired him greatly. He was architect of India’s second five year plan and due to this second plan is known as Mahalanobis model.
9. Consider the following:
- Minor Irrigation Scheme: CCA less than 2000 Hectares
- Medium Irrigation Scheme : CCA more than 2000 Hectares but less than 10000 Hectares
- Major Irrigation Scheme : CCA more than 10000 Hectares
Which among the above statements is / are correct?
[A] Only 1 and 2 are correct
[B] Only 2 and 3 are correct
[C] all are correct
[D] all are incorrect
Show Answer
Correct Answer: C [all are correct]
Notes:
Various irrigation schemes in India were classified by the erstwhile planning commission into three parts viz. Minor, Medium and Major Irrigation schemes.
- Major irrigation Scheme: Major irrigation schemes are those schemes which have a Culturable Command Areas of More than 10,000 hectares.
- Medium irrigation Schemes: The Medium Irrigation Schemes have a CCA of 2,000-10,000 hectares.
- Minor Schemes: Those with Culturable command areas up to 2000 hectares.
Cultural command area is the basis for the design of water course and basis for the design of an irrigation project. It is the proportion of the Gross Command Area which is Culturable and cultivable.
10. 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.
