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 organizations calculates and publishes LIBOR (London Interbank Offered Rate)?
[A] Bank of England
[B] Thomson Reuters
[C] European Banking Federation
[D] European Central Bank
Show Answer
Correct Answer: B [Thomson Reuters]
Notes:
The London Inter-bank Offered Rate (LIBOR) is the average interest-rate calculated from estimates submitted by the leading banks in London. The rates are calculated and published by Thomson Reuters Corporation.
2. Which among the following is a correct definition of Dollarization?
[A] when the inhabitants of a country use US dollars in parallel to or instead of the domestic currency
[B] when the inhabitants of a country use only US Dollars instead of a domestic currency
[C] when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency
[D] None of the above
Show Answer
Correct Answer: C [when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency]
Notes:
when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency, The term is not only applied to usage of the United States dollar, but generally to the use of any foreign currency as the national currency.
3. National Rural Credit Stabilization Fund is a Institution of purpose-specific funds in which of the following?
[A] IDBI
[B] SIDBI
[C] IFCI
[D] NABARD
Show Answer
Correct Answer: D [NABARD]
Notes:
The National Rural Credit stabilization fund is a sector specific finds maintained with National Bank for Agriculture and Rural Development. This fund includes contributions from Central and State Governments, sums contributed by RBI and the sums contributed by NABARD’s board every year.
4. Approximately, what fraction of market capitalization of the Bombay Stock Exchange is accounted by the 30 stocks of the BSE SENSEX?
[A] 10%
[B] 20%
[C] 30%
[D] 40%
Show Answer
Correct Answer: B [20%]
Notes:
The correct answer is 30%. The BSE SENSEX, comprising 30 of the largest and most actively traded stocks on the Bombay Stock Exchange, represents a important portion of the market capitalization. As of recent data, these 30 stocks account for approximately 30% of the total market capitalization of the BSE, reflecting their importance in the Indian equity market. The SENSEX is one of the oldest stock market indices in Asia, established in 1986.
5. In Financial Language, Fixed to Floating and Floating to Floating are used in context with which among the following?
[A] Interest rates
[B] Swaps
[C] Foreign Exchange Rates
[D] None of them
Show Answer
Correct Answer: B [Swaps]
Notes:
The terms “Fixed to Floating” and “Floating to Floating” refer to types of interest rate swaps. In a Fixed to Floating swap, one party pays a fixed interest rate while receiving a floating rate, typically linked to a benchmark like LIBOR. In a Floating to Floating swap, both parties exchange floating rates, often based on different benchmarks. Interest rate swaps are commonly used for hedging against interest rate risk and managing cash flow. The global market for interest rate swaps is substantial, with trillions of dollars in notional amounts traded annually.
6. Which among the following was the main objective of the Fiscal Responsibility and Budget Management Act, 2003?
[A] Achieve Fiscal Surplus
[B] Eliminate Revenue deficit
[C] Eliminate Fiscal Deficit
[D] Stop Money Laundering
Show Answer
Correct Answer: B [Eliminate Revenue deficit]
Notes:
The main objective of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, was to eliminate the revenue deficit. This act aimed to ensure fiscal discipline by setting targets for the government to reduce its fiscal deficit and improve the overall financial health of the economy. The act mandates the government to present a medium-term fiscal policy and aims to enhance transparency in fiscal operations. It was introduced in response to rising fiscal deficits in the late 1990s and early 2000s, which posed risks to economic stability.
7. Which among the following Indian states is the leading producer of raw silk?
[A] Bihar
[B] West Bengal
[C] Assam
[D] Karnataka
Show Answer
Correct Answer: D [Karnataka]
Notes:
Karnataka is the leading producer of raw silk in India, accounting for more than 40 percent of the total raw silk production. This is in large part due to the state’s favourable climate conditions for silk cultivation, as well as the degree of governmental support in the state for silk farmers.
8. Which of the following organizations has divided the countries into IDA, IBRD, and Blend countries for eligibility of loans?
[A] International Monetary Fund
[B] World Bank
[C] Asian Development Bank
[D] New Development Bank
Show Answer
Correct Answer: B [ World Bank ]
Notes:
Economies are divided into IDA, IBRD, and Blend countries based on the operational policies of the World Bank. International Development Association (IDA) countries are those with low per capita incomes that lack the financial ability to borrow from the International Bank for Reconstruction and Development (IBRD). Blend countries are eligible for IDA loans but are also eligible for IBRD loans because they are financially creditworthy.
9. Travel and Tourism Competitive Index (TTCI) is published by:
[A] World Economic Forum
[B] World Tourism Organization
[C] World Travel & Tourism Council
[D] Amnesty International
Show Answer
Correct Answer: A [World Economic Forum]
Notes:
The Travel and Tourism Competitiveness Report is published by the World Economic Forum.
10. Which state in India is the largest producer of salt?
[A] Kerala
[B] Andhra Pradesh
[C] Gujarat
[D] Maharashtra
Show Answer
Correct Answer: C [Gujarat]
Notes:
Gujarat is the largest producer of salt in India because of its extensive dry coast. Gujarat accounts for 77% of the salt produced in our country. Salt industries of Gujarat are thriving in Surat, Kutch, Bhavnagar, Rajkot, Anand, etc.