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. What is India’s rank in the Travel and Tourism Development Index 2024?
[A] 34th
[B] 54th
[C] 38th
[D] 39th
Show Answer
Correct Answer: D [39th]
Notes:
The World Economic Forum published the Travel and Tourism Development Index 2024. India was ranked 39th among 119 countries in this index. The index measures factors supporting tourism development globally. India’s position improved over previous years. The Travel and Tourism Development Index is released every two years.
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. 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.
4. In the abbreviation APEDA, what does P stand for ?
[A] Pisciculture
[B] Products
[C] Processed Food Products
[D] Promotion
Show Answer
Correct Answer: C [Processed Food Products]
Notes:
Agricultural and Processed Food Products Export Development Authority (APEDA) is an apex body under the Ministry of Commerce and Industry, Government of India, responsible for the export promotion of agricultural products. Its headquarters are located in New Delhi. It is a statutory body established under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December, 1985.
5. Which tactic artificially inflates trading volumes to deceive retail investors in India?
[A] Dividend Stripping
[B] Intra-Day Trading
[C] Forward Trading
[D] Circular Trading
Show Answer
Correct Answer: D [Circular Trading]
Notes:
Circular trading involves participants repeatedly buying and selling the same securities within a group. This creates fake market activity without changing ownership. Circular trading is banned under SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. SEBI monitors for such patterns using price bands and volume filters. The practice is classified as market manipulation under Indian securities law.
6. What is the main difference between FDI and FII?
[A] FII is more stable than FDI
[B] FDI targets only infrastructure sectors
[C] FII needs stricter regulatory approval
[D] FDI is long-term in assets; FII is short-term in securities
Show Answer
Correct Answer: D [FDI is long-term in assets; FII is short-term in securities]
Notes:
Foreign Direct Investment (FDI) involves long-term investment in a business’s physical assets, often bringing technology and management expertise. Foreign Institutional Investment (FII) involves short-term capital investment in financial securities like stocks and bonds without management control. FDI investors establish a lasting presence, while FIIs are passive shareholders without operational involvement. FDI is typically more stable compared to FII, which can exit markets quickly.
7. Round-tripping refers to which of the following practices?
[A] Policy to boost FDI
[B] Means of tax evasion
[C] Policy of export promotion
[D] Calculation of National Income
Show Answer
Correct Answer: B [Means of tax evasion]
Notes:
Round-tripping is the practice of moving domestic funds to foreign jurisdictions and then reinvesting them in the original country to evade taxes or regulatory restrictions. Round-tripping is commonly linked to misuse of tax havens. In 2008, round-tripping was estimated to cause a global tax revenue loss of 8 billion to 27 billion. This practice is illegal in several countries, including India.
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 are used as tool for the Liquidity adjustment facility (LAF)?
- Repo Rate
- Reverse Repo Rate
- Cash Reserve Ratio
- Statutory liquidity ratio
Select the correct option from codes given below:
[A] 1 & 2 Only
[B] 3 & 4 Only
[C] 1, 2 & 3 Only
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: A [ 1 & 2 Only ]
Notes:
Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks to borrow money through repurchase agreements. It consists of Rep and Reverse Repo Rate.
10. Which of the following is / are correct statements about “Adopt a Heritage Scheme”?
- It is an initiative under Ministry of Culture
- Under this scheme, government has appointed private as well as public companies as “Monument Mitras” to boost heritage tourism in the country
Select the correct option from the codes given below:
[A] Only 1
[B] Only 2
[C] Both 1 & 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: B [Only 2 ]
Notes:
First statement is incorrect. The “Adopt a Heritage Scheme” is an initiative under Ministry of Tourism. Second statement is correct. Under this scheme, the government has appointed private as well as public companies as “Monument Mitras” for making heritage tourism more sustainable through conservation and development. The short-listed companies, to be called Monument Mitras, are from various sectors such as hospitality, travel, and banking.
