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. What is the main goal of Antyodaya Anna Yojana (AAY) scheme?
[A] Provide employment to urban workers
[B] Ensure food security for the poorest
[C] Subsidize inputs for marginal farmers
[D] Distribute cash to BPL households
Show Answer
Correct Answer: B [Ensure food security for the poorest]
Notes:
The Antyodaya Anna Yojana was launched in December 2000 by the Government of India. Its objective is to provide food security to the poorest of the poor identified under the Targeted Public Distribution System. Eligible families receive 35 kg of food grains per month at highly subsidized prices—rice at ₹3/kg and wheat at ₹2/kg. This scheme operates nationwide.
12. Which of the following define Deficit Financing? (UPSC Prelims 1987)
[A] Difference of total expenditure and income by revenue from all sources
[B] Government spends in excess of revenues so that a budget deficit is incurred which is financed by the borrowings
[C] Difference in borrowing and external and internal resources
[D] Capital expenditure on items of public construction, public enterprises and public borrowings
Show Answer
Correct Answer: B [Government spends in excess of revenues so that a budget deficit is incurred which is financed by the borrowings]
Notes:
Deficit financing is the budgetary situation where expenditure is higher than the revenue. It is a practice adopted for financing the excess expenditure with outside resources. The expenditure revenue gap is financed by either printing of currency or through borrowing.
13. Which crop has the highest production in India? (UPSC Prelims 1988)
[A] Rice
[B] Wheat
[C] Tobacco
[D] Gram
Show Answer
Correct Answer: A [Rice]
Notes:
India’s rice production is projected at 152 million tonnes for the 2025-26 crop season. Wheat output is estimated at 117.9 million tonnes in the same period. India accounts for 30.3% of global rice exports. Rice production in India consistently surpasses other major crops, making it the leading agricultural commodity in the country by volume.
14. Which are major environmental causes of death in developing countries? (UPSC Prelims 1993)
[A] Lack of safe water, pesticide use, ozone thinning
[B] Contaminated food, global warming, CFCs
[C] Polluted air, greenhouse effect, soil erosion
[D] Unsafe water, contaminated food, polluted air
Show Answer
Correct Answer: D [Unsafe water, contaminated food, polluted air]
Notes:
Unsafe water, contaminated food, and polluted air are linked to around 40% of global deaths caused by pollution in developing countries. Waterborne diseases like cholera and diarrhoea account for significant mortality, especially in children. Air pollution contributes to respiratory diseases, increasing mortality rates among children under age five. Contaminated food transmits diarrhoeal diseases and other infections, particularly in low-income regions.
15. Real National income increases in which of the following circumstances?
[A] When Prices of goods increases
[B] When saving of people increases
[C] When Inflation increases prices and taxes
[D] When the production of goods and services increases
Show Answer
Correct Answer: D [When the production of goods and services increases]
Notes:
As the calculation of national income is the total value of all goods and services in an economy the real increase happens when the output production increases. The rate change won’t affect because while calculating real national income we take into account the prices of base year. So even the inflation effect is also removed.
16. Who is the author of the book “The Black Swann”?
[A] Nassim Nicholas Taleb
[B] Paul Robin Krugman
[C] Millicent Fawcett
[D] Arthur Pigou
Show Answer
Correct Answer: A [Nassim Nicholas Taleb]
Notes:
Nassim Nicholas Taleb wrote the book “The Black swann”. This book describes the power of unforeseeable events, and the damage they can wreak on unsuspecting societies.
17. Which Indian Economist served as the Chief economic advisor as well as the Finance Minister of India before leading the government twice?
[A] Manmohan Singh
[B] Arvind Panagariya
[C] Pranab Mukherjee
[D] P. Chidambram
Show Answer
Correct Answer: A [Manmohan Singh]
Notes:
Manmohan Singh served as Chief Economist to PM VP Singh in 1989, Finance Minister in 1991, and later led the government as prime minister from 2004-14.
18. What was the second Five Year plan known as?
[A] Nehru-Mahalonibis
[B] Harrod-Domar
[C] Mountbatton-Nehru
[D] Nehru-Swami
Show Answer
Correct Answer: A [Nehru-Mahalonibis]
Notes:
The Second Plan was particularly in the development of the public sector and “rapid Industrialisation”. The plan followed the Mahalanobis model, an economic development model developed by the Indian statistician Prasanta Chandra Mahalanobis in 1953. The plan attempted to determine the optimal allocation of investment between productive sectors in order to maximize long-run economic growth.
19. Who suggested the rolling plan for backward countries?
[A] Gunnar Myrdal
[B] Amartya Sen
[C] R.Samuelson
[D] M.R.Lewis
Show Answer
Correct Answer: A [Gunnar Myrdal]
Notes:
The Rolling Plan for backward countries was suggested by Gunnar Myrdal. The rolling plan consists of three different steps, First, a plan for the current year which includes the annual budget. Second, a plan fixed for a fixed number of years, say three-four or five years. As per the requirement of the economy, it is revised every year. Third a perspective plan for 10, 15, or 20 years.
20. During which five-year plan the Private sector was given priority over the public sector?
[A] 5th
[B] 7th
[C] 6th
[D] 8th
Show Answer
Correct Answer: B [7th]
Notes:
Seventh Five Year Plan from 1985 to 1990 had the objective to establish a self-sufficient economy, opportunities for productive employment. For the first time, the private sector got priority over the public sector. Socialist India started moving away from it.
