Indian Economy MCQs

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Money market securities are debt issues with maturities of one year or less. Treasury Bills, Certificate of Deposit as well as Commercial papers are money market instruments.

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The Planning Commission was set up by a Cabinet Resolution of the Government of India in March 1950. Jawaharlal Nehru was the first Chairman of the Planning Commission. It had the responsibility to formulate plans to utilize the available resources.

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Inflation reduces currency purchasing power and drives general price increases. Banks respond by raising loan prices due to higher costs, including increased wages and operational expenditures. Central banks often hike interest rates during inflation to control rising prices. Higher interest rates result in increased loan pricing by banks to maintain profit margins.

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Sikkim produces about 80% of India’s large cardamom. It is grown mainly in the Himalayan region of Sikkim due to the favorable climate and altitude. Sikkim’s production reached approximately 5.591 thousand tonnes in 2025. The government initiative “Mero Alaichi, Mero Dhan” supports cardamom cultivation in Sikkim. Assam, Gujarat, and Kerala do not match Sikkim’s output in this crop.

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Credit index derivatives have not been formally permitted for trading in India. The Reserve Bank of India released draft revised Master Directions on Credit Derivatives in 2022, proposing a regulatory framework for these products. Public consultation for these directions closed in February 2023, and final approval is pending. Only credit default swaps are currently permitted for eligible participants.

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The Gender Development Index was introduced by UNDP in 1995. It assesses gender gaps in health (life expectancy at birth), education (years of schooling), and income (estimated earned income). GDI uses the ratio of female to male Human Development Index values. A value of 1 indicates gender parity. It was released with the Gender Empowerment Measure. The Gender Inequality Index was introduced in 2010 and includes reproductive health and labour market participation.

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The Trade and Economic Relations Committee (TERC) in India is headed by the Prime Minister. This committee was established to enhance India’s trade relations and economic policies, reflecting the government’s focus on international trade as a key driver of economic growth. The Prime Minister’s leadership underscores the importance of trade in India’s economic strategy.

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Vertical farming uses multi-storey buildings to grow crops in urban environments. The method utilizes hydroponics or aeroponics. This allows for agriculture independent from soil and weather conditions. The technique optimizes space and supports year-round production. Commercial vertical farms have been established in countries such as Japan, Singapore, and the United States since the early 2000s.

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The Delhi Mumbai Industrial Corridor Project is funded mainly by the Indian government and Japanese agencies JBIC and JICA. The project’s primary investment does not come from the World Bank. National Rural Livelihoods Project, PMGSY, and National Vector Borne Disease Control receive direct World Bank assistance. DMIC was launched in 2006 as a partnership between India and Japan.

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Inflation Indexed Bonds (IIBs) are pegged to the Consumer Price Index (CPI). This means their interest payments and principal value adjust based on changes in the CPI, which measures the average change over time in the prices paid by consumers for goods and services. IIBs aim to protect investors from inflation, ensuring that the purchasing power of their returns is maintained. In India, the CPI is the primary measure for these bonds, while the Wholesale Price Index (WPI) measures price changes at the wholesale level and is not used for IIBs.