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 country is the main competitor of the Indian jute industry?
[A] Japan
[B] China
[C] Sri Lanka
[D] Bangladesh
Show Answer
Correct Answer: D [Bangladesh]
Notes:
Bangladesh ranks as the world’s second-largest jute producer after India. Bangladesh is the leading global exporter of raw jute and jute products. In 2023, Bangladesh exported about $162 million worth of jute, with India as the primary market. The jute industries of Bangladesh and India dominate global jute supply, with Bangladesh’s exports competing directly with Indian products in international markets.
12. Which actions would tighten banks’ liquidity position?
[A] Only selling government securities
[B] Only stricter liquidity regulations
[C] All of the above actions
[D] Only central bank quantitative tightening
Show Answer
Correct Answer: C [All of the above actions]
Notes:
Increased sales of government securities withdraw funds from banks, reducing reserves. Regulations mandating positive end-of-day central bank balances restrict available liquidity for lending or investment. Quantitative tightening by central banks reduces overall bank reserves as securities mature and are not reinvested. All these actions decrease liquidity in the banking system by shrinking available reserves.
13. Which of the following is the management of securities of the corporate sector offered to the public on a regular basis?
[A] Corporate Issues Management
[B] Public Issues Management
[C] Securities Issues Management
[D] Private Issues Management
Show Answer
Correct Answer: B [Public Issues Management]
Notes:
Public Issue Management is the management of securities of the corporate sector offered to the public on a regular basis, and existing shareholders on a rights basis, is known as public issue management.
14. Which is a primary cause of inflation? (UPSC Prelims 1979).
[A] Increase in money supply
[B] Fall in production
[C] Increase in money supply and fall in production
[D] Decrease in money supply and rise in production
Show Answer
Correct Answer: C [Increase in money supply and fall in production]
Notes:
Inflation is caused by an increase in the money supply and a decrease in production. Demand-pull inflation arises when the growth in money supply surpasses economic output. Cost-push inflation occurs with supply shocks or reduced production. Both factors together can increase the general price level. India has experienced inflation due to these sources in multiple years.
15. When does a monopoly by a specific business entity occur in the market?
[A] When there are numerous buyers and sellers
[B] When homogeneous products flood the market
[C] When a distinctive product is exclusively sold by a single seller
[D] When firms are merely price takers
Show Answer
Correct Answer: C [When a distinctive product is exclusively sold by a single seller]
Notes:
A monopoly exists when a specific entity is the sole supplier of a particular commodity. This market condition can only occur if the unique product is exclusively sold by one seller, eliminating any form of direct competition. It is regulated by certain laws to prevent marketplace inefficiency. However, a monopoly can lead to innovation as other companies strive to create an alternative or similar product.
16. Who is the author of “Volatility and Growth”?
[A] Esther Duflo
[B] Amartya Sen
[C] Abhijit Banerjee
[D] Jagadish Bhagwati
Show Answer
Correct Answer: C [Abhijit Banerjee]
Notes:
Abhijit Banerjee is the author of “Volatility and Growth”. It has long been recognized that productivity growth and the business cycle are closely interrelated.
17. Which sector contributed the maximum to GDP at the time of Independence?
[A] Agriculture
[B] Services
[C] Manufacturing
[D] None of the above
Show Answer
Correct Answer: A [Agriculture]
Notes:
Agriculture contributed the maximum to GDP at the time of independence. But after the liberalization India moved towards the services and currently, the service sector contributed about 55% to GDP.
18. Which Five-year plan was also known as “Gadgil Yojna”?
[A] Second
[B] Third
[C] Fourth
[D] Fifth
Show Answer
Correct Answer: B [Third]
Notes:
The third Five-year plan was made for the duration of 1961 to 1966. This plan is called ‘Gadgil Yojna’ also. The main target of this plan was to make the country economically independent.
19. Which advancement most reduced agricultural emissions while boosting productivity?
[A] Labor-saving machinery and mechanization
[B] Land productivity improvements like better seeds and precision fertilizer use
[C] Increased irrigation systems
[D] Expansion of agricultural land area
Show Answer
Correct Answer: B [Land productivity improvements like better seeds and precision fertilizer use]
Notes:
A 2026 Cornell study of 1961-2021 data reported global agricultural productivity increased by 270% while emissions increased by 45%. Land productivity innovations, such as improved seeds and precision fertilizers, played a greater role in reducing emissions than mechanization. These improvements led to more output per acre, preventing expansion of cultivated land and helping limit overall emissions growth.
20. Where is the headquarters of the Tobacco Board of India?
[A] Guntur
[B] Vellore
[C] Chennai
[D] Kochi
Show Answer
Correct Answer: A [Guntur]
Notes:
The Tobacco Board of India is a facilitator for tobacco growers, traders, and exporters. Its headquarters is at Guntur, Andhra Pradesh.
