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. When a Demand Draft is deposited, what is the bank’s role?
[A] Creditor of the customer
[B] Debtor of the customer
[C] Agent of the customer
[D] Trustee of the customer’s funds
Show Answer
Correct Answer: B [Debtor of the customer]
Notes:
When a customer deposits a Demand Draft, the bank becomes a debtor. The relationship is that the bank owes the equivalent amount to the customer and must repay on demand. This debtor-creditor relationship is regulated by the Indian Contract Act, 1872 and the Banking Regulation Act, 1949. The bank has no trustee obligations in such straightforward deposit transactions.
12. Which state is the largest silk producer in India?
[A] Karnataka
[B] Assam
[C] Kerala
[D] Andhra Pradesh
Show Answer
Correct Answer: A [Karnataka]
Notes:
Karnataka produced 13,278 tonnes of raw silk in 2024-25, the highest in India. The state has consistently led silk production, accounting for around one-third of the country’s total output annually. Major silk-producing districts in Karnataka include Mandya, Kolar, Chikkaballapur, and Ramanagara. The Central Silk Board reports Karnataka’s dominance in mulberry silk production nationwide for several years.
13. Which of the following countries doesn’t matches to its famous tourist place?
[A] China – Great Wall of China
[B] Bhutan – Paro Taktsang
[C] Nepal – Pashupatinath Temple
[D] Sri Lanka – Padmanabhaswamy Temple
Show Answer
Correct Answer: D [Sri Lanka – Padmanabhaswamy Temple]
Notes:
Padmanabhaswamy Temple is located in Thiruvananthapuram, Kerala, India. The temple is built in an intricate fusion of the indigenous Kerala style and the Tamil style of architecture.
14. Which among the following is/are correct regarding Call Money?
[A] No Collateral is required in Call Money transaction
[B] It is the money lent/borrowed for maximum period of 30 days
[C] It is the money lent/borrowed for maximum period of 45 days
[D] Banks borrow primarily from customers
Show Answer
Correct Answer: A [ No Collateral is required in Call Money transaction ]
Notes:
Call money is the money lent/borrowed for maximum period of 14 days. No Collateral is required in Call Money transaction. Banks borrow primarily from the inter-bank (call money) market.
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. Which of the following countries follow a Socialist Economic model?
[A] India and China
[B] China and Russia
[C] Japan and Russia
[D] India and Japan
Show Answer
Correct Answer: B [China and Russia]
Notes:
In China and Russia, most decisions were made by the central government. This type of economy was the core of the communist philosophy. So both these economies are based on the socialist model. (Note: As of 2026, China maintains its socialist market economy under the Communist Party, while Russia retains centralized state control in key sectors despite market reforms.)
17. What was the first five-year plan known as?
[A] Mahalonibis Model
[B] Bombay Plan
[C] Harrod Domar plan
[D] None of these
Show Answer
Correct Answer: C [Harrod Domar plan]
Notes:
India adopted five-year plans from 1950 after independence. The first five-year plan was based on the Harrod-Domar model which is based on steady-state growth.
18. Which of the following is correct about drip irrigation?
- It is a micro-irrigation system
- water is directly applied to roots
- It reduces leaching
- Field levelling is not necessary
Choose the correct option from the code given below:
[A] 1 & 2 Only
[B] 1, 2 & 3 Only
[C] 1, 3 & 4 Only
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [1, 2, 3 & 4]
Notes:
Drip irrigation is a micro-irrigation technique. It is applied near the roots directly and leaching is reduced. Fertilizer and nutrient loss is reduced.
19. Which among the following is the main feedstock of Urea?
[A] Petrol
[B] Natural gas
[C] Coal
[D] Diesel
Show Answer
Correct Answer: B [Natural gas]
Notes:
Urea is produced from natural gas. In a first step, nitrogen is bound as ammonia, and at the same time carbon dioxide is produced from the natural gas, while in a second method step the ammonia and the carbon dioxide are converted to urea
20. Which crop has a variety called Arabica?
[A] Tea
[B] Coffee
[C] Maize
[D] Cotton
Show Answer
Correct Answer: B [Coffee]
Notes:
Coffea arabica is a species of coffee. Around 70% of global coffee production is Arabica. India produces Arabica coffee mainly in Karnataka, Kerala, and Tamil Nadu. The Coffee Board of India was established in 1942. Indian Arabica is known for its mild flavor and aroma. Arabica coffee plants grow best at elevations between 600 and 2000 meters above sea level.
