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. Who is the ex-officio Chairperson of the Monetary Policy Committee (MPC)?
[A] The Finance Minister of India
[B] The Deputy Governor of RBI
[C] Secretary, Department of Economic Affairs
[D] Governor of Reserve Bank of India
Show Answer
Correct Answer: D [Governor of Reserve Bank of India]
Notes:
The Monetary Policy Committee was formed in 2016 after an amendment to the RBI Act, 1934. The Committee consists of six members: three from the Reserve Bank of India and three nominated by the Central Government. The Governor of the Reserve Bank of India is designated as the ex-officio Chairperson of the Monetary Policy Committee.
2. Which is NOT a core WTO agreement or mechanism?
[A] Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
[B] General Agreement on Trade in Services (GATS)
[C] Plurilateral Agreement on Government Procurement
[D] Multilateral Agreement on Investment (MAI)
Show Answer
Correct Answer: D [Multilateral Agreement on Investment (MAI)]
Notes:
The Multilateral Agreement on Investment (MAI) was negotiated by OECD countries in the 1990s. MAI was not concluded and is not part of the World Trade Organization framework. WTO core agreements include GATS, TRIPS, and GATT. The Plurilateral Agreement on Government Procurement functions within the WTO through voluntary acceptance by signatory members only. MAI remains outside the WTO system and was never implemented.
3. Which among the following is considered to be the best measure of an increase in a country’s economic efficiency?
[A] Increase in annual private investment
[B] Increase in real national income
[C] Increase in real per capita income
[D] Increase in net annual investment
Show Answer
Correct Answer: C [Increase in real per capita income]
Notes:
Per capita income is a measure of the average income earned per person in a given area (usually in a country) in a particular year. When this figure is adjusted for inflation, the real per capita income is obtained, which gives the best measure of an increase in a country’s economic efficiency.
4. Which among the following is a term for which alternate word “Buyer’s Monopoly” is used?
[A] Oligopoly
[B] Inverse monopoly
[C] Monopsony
[D] Duopoly
Show Answer
Correct Answer: C [Monopsony]
Notes:
Monopsony refers to a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many sellers.
5. In which of the five year plan in India, the concept of Financial Inclusion was included for the first time?
[A] 8th Five Year Plan
[B] 9th Five Year Plan
[C] 10th Five Year Plan
[D] 11th Five Year Plan
Show Answer
Correct Answer: D [11th Five Year Plan]
Notes:
The 11th Five Year Plan was implemented from 2007-2012, when Manmohan Sigh was India’s Prime Minster. The main slogan for the 11th FYP was “Faster and more inclusive growth”. The 11th FYP made special emphasis on Financial Inclusion, poverty reduction, empowerment through education and skill development etc.
6. Which among the following is the main purpose of the Reserve Bank of India’s mechanism known as Devolvement?
[A] To counter the problem of low capital in the scheduled banks
[B] To ensure subscription/successful completion of Government Securities auctions by devolving unsubscribed securities on Primary Dealers
[C] To handle the problem of discrepancy in accounting systems in banks
[D] To control the scheduled banks’ assets and liabilities
Show Answer
Correct Answer: B [To ensure subscription/successful completion of Government Securities auctions by devolving unsubscribed securities on Primary Dealers]
Notes:
Devolvement is linked to the underwriting of Government Securities by Primary Dealers. If the auction is not fully subscribed, the unsubscribed portion can be devolved on the Primary Dealers according to their underwriting commitments. This mechanism helps ensure that the issue is successfully completed and that the government borrowing programme is not disrupted. It is therefore a primary market support tool for Government Securities auctions, not a banking-accounting or capital adequacy measure.
7. Which statement is true about an equity fund?
[A] It guarantees fixed returns to investors
[B] It invests equally in debt and equity securities
[C] It invests mainly in stocks for long-term capital growth
[D] It assures predictable growth regardless of markets
Show Answer
Correct Answer: C [It invests mainly in stocks for long-term capital growth]
Notes:
An equity fund is a pooled investment scheme that invests predominantly in shares of companies. SEBI regulations in India require at least 65% of total assets in equities or equity-related instruments for classification as an equity fund. These funds seek long-term capital appreciation by investing in listed companies. Returns depend on market performance and Net Asset Value. Equity funds do not offer guaranteed or fixed returns.
8. Who is the Appellate Authority under RBI's Integrated Ombudsman Scheme?
[A] Managing Director of the Concerned Bank
[B] Governor of Reserve Bank of India
[C] Deputy Governor of Reserve Bank of India
[D] Executive Director-in-charge of Consumer Education and Protection Department of RBI
Show Answer
Correct Answer: D [Executive Director-in-charge of Consumer Education and Protection Department of RBI]
Notes:
Under the RBI’s Integrated Ombudsman Scheme, an appeal against the Ombudsman’s decision lies to the Appellate Authority designated by the Reserve Bank. This authority is the Executive Director in charge of the Consumer Education and Protection Department (CEPD) of RBI. The scheme provides a consumer grievance redressal framework for regulated entities covered by RBI, and the appellate mechanism is handled within RBI through this designated senior official.
9. Which monetary aggregate is defined as broad money in India?
[A] M1
[B] M2
[C] M3
[D] M4
Show Answer
Correct Answer: C [M3]
Notes:
M3 consists of currency with the public, demand deposits, and time deposits with banks. The Reserve Bank of India identifies M3 as broad money. Since 1977, the RBI uses M3 as the main monetary aggregate. The RBI publishes weekly data on M3 in its statistical supplements as of 2023.
10. The terms IBAN, BBAN, SEPA and SWIFT are associated with:
[A] International Banking
[B] Disaster Management
[C] Nuclear Waste Management
[D] International Maritime Boundaries
Show Answer
Correct Answer: A [International Banking]
Notes:
IBAN, BBAN, SEPA and SWIFT are all terms used in international banking and payment systems. SWIFT is the global messaging network used by banks, SEPA refers to the Single Euro Payments Area, and IBAN is the International Bank Account Number used for identifying bank accounts in cross-border payments. BBAN stands for Basic Bank Account Number and forms the country-specific part of the account identifier. These terms are widely used in international fund transfers.
