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.
11. Which tool involves central banks signaling future interest rate intentions?
[A] Forward guidance
[B] Quantitative easing
[C] Open market operations
[D] Reserve requirements
Show Answer
Correct Answer: A [Forward guidance]
Notes:
Forward guidance was widely adopted after the 2008 global financial crisis. The Federal Reserve began explicit forward guidance in 2011. The European Central Bank used this tool in 2013. The Bank of Japan started using forward guidance in 2013. Forward guidance aims to influence market expectations about future monetary policy. It became prominent when policy rates approached zero, limiting conventional monetary tools.
12. Which committee is responsible for identifying out the criteria for the urban poor or urban BPL families?
[A] Hashim Committee
[B] Naresh Chandra Committee
[C] Sachar Committee
[D] Bhure Lal Committee
Show Answer
Correct Answer: A [ Hashim Committee ]
Notes:
Hashim Committee gave the criteria for identifying the urban poor or urban BPL families. The committee based its identification criteria on the parameters that were mapped by the Socio-Economic Caste Census (SECC).
13. Which institution currently owns National Housing Bank?
[A] RBI
[B] Ministry of Finance
[C] Government of India
[D] SEBI
Show Answer
Correct Answer: C [Government of India]
Notes:
The National Housing Bank was established in 1988 under the National Housing Bank Act, 1987. It was initially a subsidiary of the Reserve Bank of India. In March 2019, RBI transferred its entire stake to the Government of India. NHB operates under the Ministry of Finance. NHB’s head office is located in New Delhi.
14. Which industries mainly benefit from Mumbai Port in Maharashtra?
[A] Iron and Steel industry
[B] Sugar and Cotton textile industry
[C] Cotton textile and Petrochemical industry
[D] Engineering and Fertilizer industry
Show Answer
Correct Answer: C [Cotton textile and Petrochemical industry]
Notes:
Mumbai Port in Maharashtra is a major center for handling cotton, petroleum, oil, and petrochemical shipments. It serves as a key import point for long staple cotton and machinery for the cotton textile sector. The port’s specialized terminals handle large volumes of petrochemical products. Cotton textile and petrochemical industries have longstanding reliance on Mumbai Port for raw material and export requirements.
15. Which among the following is India’s first Oil refinery?
[A] Guwahati Refinery
[B] Vishakhapatnam Refinery
[C] Digboi Refinery
[D] Barauni Refinery
Show Answer
Correct Answer: C [ Digboi Refinery ]
Notes:
Crude oil was discovered here in late 19th century. Digboi is known as the Oil City of Assam where the first oil well in Asia was drilled. The first refinery was started here as early as 1901. Digboi has the oldest oil Refinery in operation.
16. Which of the following is the distribution of the burden of paying a tax?
[A] Sharing of tax burden
[B] Shifting of the tax
[C] Incidence of a tax
[D] Tax capitalization
Show Answer
Correct Answer: C [Incidence of a tax]
Notes:
In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. The introduction of a tax drives a wedge between the price consumers pay and the price producers receive for a product, which typically imposes an economic burden on both producers and consumers.
17. Which of the following is represented by ‘Lorenz Curve’?
[A] Inflation
[B] Income Distribution
[C] Employment
[D] Deflation
Show Answer
Correct Answer: B [Income Distribution]
Notes:
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution.
18. Which of the following are money markets instruments?
[A] A 14-day repurchase agreement of Treasury 8% 2007
[B] A treasury bill with 7 days to maturity
[C] A 3-month certificate of deposit
[D] All of the above
Show Answer
Correct Answer: D [ All of the above ]
Notes:
The short-term debts and securities sold on the money markets—which are known as money market instruments—have maturities ranging from one day to more.
19. Which among the following is not a part of factor of production?
[A] Land
[B] Labour
[C] Capital
[D] Wages
Show Answer
Correct Answer: D [Wages]
Notes:
The Factors of production are the inputs available to supply goods and services in an economy.
They are Land, Labour, Capital and Enterprise.
20. Which of the following is not the advantage of the Socialist Economy?
[A] Equitable distribution of resources
[B] Social development is possible
[C] Government can take steps to focus on important sectors
[D] There is Lack of Innovation.
Show Answer
Correct Answer: D [There is Lack of Innovation.]
Notes:
There is a lack of innovation is the disadvantage of Socialist form of Economy. Since there is no need to take any risk as all the jobs are protected innovation doesn’t take place. Workers are also forced to pursue jobs the government deems fit.
