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. Cultural command area calculations are used in which of the following?
[A] Preparation of a Land Development Plan
[B] Designing an Irrigation Plan
[C] Prepare a plan for new crops introduction
[D] Design the agricultural policy
Show Answer
Correct Answer: B [Designing an Irrigation Plan]
Notes:
Cultural command area refers to the area that can be irrigated and cultivated after suitable preparation. It is a key parameter in designing irrigation plans to determine the extent of land that irrigation projects can serve effectively. Calculation of cultural command area is a standard part of planning for canal and irrigation networks in Indian agriculture and water resource engineering.
12. What is IPO in context to a company?
[A] The first sale of stock by a private company to the public
[B] Upgradation of shares from primary to secondary market
[C] Selling of shares at premium by a company
[D] Convert of a private limited company to public limited Company
Show Answer
Correct Answer: A [ The first sale of stock by a private company to the public ]
Notes:
When an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public, it is called Initial Public Offering or IPO. In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), the best offering price and the time to bring it to market.
13. Which type of foreign exchange rate system does India follow?
[A] Fixed
[B] Free float
[C] Managed float
[D] Fixed target band
Show Answer
Correct Answer: C [Managed float]
Notes:
India has a managed floating exchange rate system since 1994. The Reserve Bank of India intervenes in the foreign exchange market to reduce excessive volatility. The rupee exchange rate is mainly determined by market demand and supply. The system allows daily fluctuations, with the RBI entering the market when necessary to maintain orderly conditions.
14. Which statement about indirect taxes in India is correct?
[A] They decrease as value of goods increases
[B] They are not part of Consolidated Fund of India
[C] They apply same tax rate to all income groups
[D] Most governments avoid indirect taxes
Show Answer
Correct Answer: C [They apply same tax rate to all income groups]
Notes:
Indirect taxes such as GST and excise duties are levied at uniform rates regardless of the income level of the consumer. This results in all consumers, irrespective of their earning capacity, paying the same rate on goods and services. Indirect taxes are considered regressive for this reason. The tax rate is not linked to income or earning ability.
15. Natural Gas is one of the materials used in making of Fertilizers. Which among the following is the function of Natural gas in production of Fertilizers?
[A] As a fuel, to supply heat
[B] As a Reducing agent
[C] As a catalyst to produce complex fertilizers
[D] As a feedstock for the production of ammonia
Show Answer
Correct Answer: D [As a feedstock for the production of ammonia]
Notes:
Natural gas, essentially methane, is upgraded by combination with nitrogen from the air to form nitrogen fertilizer. 80% of the gas is used as feedstock for fertilizer while 20% is used for heating the process and producing electricity.
16. Which of the following organisations collects data for the unorganised sector in India?
[A] CSO
[B] NSO
[C] ASI
[D] RBI
Show Answer
Correct Answer: B [NSO]
Notes:
The National Statistics Office (NSO), under the Ministry of Statistics and Programme Implementation, conducts large-scale sample surveys and collects data on various sectors, including the unorganised sector. It is the present institutional name used for this function. CSO mainly handles statistical coordination, ASI relates to industrial statistics, and RBI is India’s central bank. Hence, NSO is the correct answer.
17. Which goods do Middle East arid nations export to India in FY 2024-25?
[A] Precious stones and pearls
[B] Perfume and coffee
[C] Raw wool and carpets
[D] Fruits and palm oil
Show Answer
Correct Answer: D [Fruits and palm oil]
Notes:
Arid Middle Eastern countries, like Bahrain and UAE, export fruits (notably dates, dry fruits) and edible oils (notably palm oil) to India. These are key exports due to the region’s suitable climate and agriculture, supporting India’s food security needs. FY 2024-25 trade data affirms the trend.
18. What is the recent average gross domestic savings rate for India?
[A] 15 to 20 per cent
[B] 20 to 25 per cent
[C] 25 to 30 per cent
[D] 30 to 35 per cent
Show Answer
Correct Answer: C [25 to 30 per cent]
Notes:
India’s gross domestic savings rate was 28.37% in 2024. It was 30.7% for FY2024 as per CEIC and ICRA data. The savings rate in 2023 and 2024 has remained consistently within the 25 to 30 per cent range. No official data places the recent rate below or above this range as of June 2024.
19. What is Market equilibrium?
[A] Quantity demanded greater than quantity supplied
[B] Quantity demanded less than quantity supplied
[C] Quantity demanded equal to quantity supplied
[D] Quantity demanded is same as quantity produced
Show Answer
Correct Answer: C [Quantity demanded equal to quantity supplied]
Notes:
Market equilibrium is defined by equality between quantity demanded and quantity supplied in the market. The equilibrium price is the price of a good or service when the supply of it is equal to the demand for it in the market.
20. Which of the following correctly defines economic profit?
[A] Total revenue – Total explicit and implicit costs
[B] Total revenue – Total cost
[C] Total cost – Total revenue
[D] Total revenue – Total sold
Show Answer
Correct Answer: A [Total revenue – Total explicit and implicit costs]
Notes:
Economic profit is the surplus left after subtracting both explicit and implicit costs from total revenue. This is different from accounting profit, which usually subtracts only explicit costs. Hence, the correct definition is total revenue minus total explicit and implicit costs.
