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 the relationship between ‘Dear money’ & ‘Cheap money’ in Economics Terminology?
[A] Both of the terms are synonyms
[B] Both of them are antonyms
[C] They are unrelated in terms of their meaning
[D] Dear Money is white Money , cheap money is black money
Show Answer
Correct Answer: B [Both of them are antonyms]
Notes:
Dear money is available at exceptionally high rate of interest and cheap money is available at very low rates
2. Which among the following is correct about Giffin Goods?
[A] They obey laws of demand
[B] They don’t obey laws of demand
[C] They follow elasticity of demand
[D] The demand supply curve of Giffin Goods is a parabola
Show Answer
Correct Answer: B [They don’t obey laws of demand]
Notes:
A Giffen good is a low income, non-luxury product for which demand increases as the price increases and vice versa. A Giffen good has an upward-sloping demand curve which is contrary to the fundamental laws of demand which are based on a downward sloping demand curve.
3. On which of the following Date a Bank publishes its balance sheet ?
[A] March 31
[B] April 1
[C] December 31
[D] January 1
Show Answer
Correct Answer: A [March 31]
Notes:
The financial year of India begins from April 1 of a calendar year and ends on March 31 of the next calendar year. This system has been into existence since the British Raj in India. Hence, Banks in India publish their financial statements / balance sheets for March 31st of every year.
4. How many banks are promoting the National Payments Corporation of India (NPCI)?
[A] 6
[B] 8
[C] 10
[D] 12
Show Answer
Correct Answer: C [10]
Notes:
The National Payments Corporation of India is an umbrella organisation for operating retail payments and settlement systems in India. It is promoted by 10 banks.
5. In India, which among the following decides the savings bank rate?
[A] Central Government
[B] Banks themselves
[C] Reserve Bank of India
[D] Commercial Banks
Show Answer
Correct Answer: B [Banks themselves]
Notes:
The banks themselves fix the interest rates on saving accounts.
6. Who among the following are the beneficiaries of the “Reverse Mortgage Scheme”?
[A] Government Employees
[B] Senior Citizens
[C] Unemployed Persons
[D] Unemployed Persons
Show Answer
Correct Answer: B [Senior Citizens]
Notes:
A reverse mortgage is a type of financial product that allows seniors to access the equity in their homes without having to sell their property or make monthly loan payments. In a reverse mortgage, the lender makes payments to the borrower based on a percentage of the value of their home. The borrower retains ownership of their home and can continue to live there for as long as they wish. However, the loan must be repaid when the borrower dies, sells the property, or moves out of the home. Reverse mortgages can be a useful financial tool for seniors who need additional income but want to remain in their homes. However, they can also be risky and may not be suitable for everyone.
7. Economic growth is normally coupled with?
[A] Inflation
[B] Hyper Inflation
[C] Deflation
[D] Stagflation
Show Answer
Correct Answer: A [Inflation]
Notes:
Economic growth results in higher disposable income available with the consumers which increases the overall demand along with the supply available for the consumers. This increase in demand spurs inflation, which eventually becomes a necessary evil for a growing economy.
8. The core work of MUDRA (SIDBI) Bank is to:
[A] act as a direct financing channel to MSMEs
[B] undertake refinance operations
[C] help increase high capital intensive start ups in India
[D] facilitate increase in FDI into the Indian MSMEs
Show Answer
Correct Answer: B [ undertake refinance operations ]
Notes:
Micro Units Development and Refinance Agency Bank renamed as MUDRA (SIDBI) Bank to undertake refinance operations refinance all banks, Micro-finance Institutions (MFIs) and Non-Banking Financial Company which then provide credit to MSMEs. The MUDRA aims to give loans below Rs 10 lakh.
9. Chit funds in India are governed and regulated by _?
[A] SEBI
[B] RBI
[C] State governments
[D] Central government
Show Answer
Correct Answer: C [ State governments ]
Notes:
Chit funds in India are governed by the Chit Funds Act, 1982. Under this Act, the chit fund businesses can be registered and regulated only by the respective State Governments. Regulator of chit funds is the Registrar of Chits appointed by respective state governments under Section 61 of Chit Funds Act.
10.
Which among the following method can be used by the Central Banks to directly pump-in money in economy specially in a case when interest rates are low?
[A]
Open Market Operation
[B]
Reverse Repo
[C]
Qunatitative Easing
[D]
Repo
Show Answer
Correct Answer: C [
Qunatitative Easing
]
Notes:
We all know that the central banks of the countries usually stimulate a slowing economy by cutting interest rates. When interest rates are cut, people are encouraged to spend by borrowing more or discouraging them to save. But when there is a consistent cut in the interest rates and they become almost zero, then this option can be no longer used. Now, what to do in such circumstances? In such a situation, the central banks resort to pumping money directly into the economy. This “direct pumping of money into economy” is called quantitative easing. Money is directly pumped in the economy by buying bonds, which are usually Government and occasionally Private bonds from banks and financial institutions. In the aftermath of the financial crisis of 2008, the developed countries used quantitative easing to spur growth.
