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. In context with the share markets in India, public issue refers to which of the following?
[A] first time issuance of shares of a company via stock exchange
[B] first time issuance of shares of a public company via stock exchange
[C] allotment of shares to 50 or more investors
[D] allotment of shares to public by 50% or more fraction of the total equity
Show Answer
Correct Answer: C [ allotment of shares to 50 or more investors ]
Notes:
The primary market issuance is done either through public issues or private placement. Under Companies Act, 1956, an issue is referred as public if it results in allotment of securities to 50 investors or more. However, when the issuer makes an issue of securities to a select group of persons not exceeding 49 and which is neither a rights issue nor a public issue it is called a private placement.
12. Which among the following is used by the Government as a last resort in Deficit Financing?
[A] Borrowing from Foreign Sources
[B] Borrowing from Domestic Sources
[C] External Grants
[D] Printing of Currency
Show Answer
Correct Answer: D [ Printing of Currency ]
Notes:
The correct answer is “Printing of Currency.” In deficit financing, when a government faces a budget shortfall, it may resort to printing more money as a last resort. This method can lead to inflation if not managed properly. Historically, countries like Zimbabwe and Germany in the 1920s experienced hyperinflation due to excessive money printing. This approach is typically avoided until other options, such as borrowing, are exhausted.
13. In context with Banking, which among the following is the nearest meaning of Amortization?
[A] Repayment of Principal and Interest
[B] Repayment of Principal
[C] Repayment of loan in one lump sum
[D] None of the above is a correct answer
Show Answer
Correct Answer: A [ Repayment of Principal and Interest ]
Notes:
Amortization refers to the gradual repayment of a loan over time through regular payments that cover both principal and interest. This process allows borrowers to pay off their debt in manageable installments rather than in a single lump sum. The term originates from the Latin “amortire,” meaning “to kill off,” reflecting the idea of reducing debt. In finance, amortization schedules detail each payment’s allocation towards interest and principal, providing clarity on the loan’s repayment structure.
14. The basic WTO principle with reference to trade barriers is that:
[A] Trade barriers can be imposed by any country that believes it will benefit from such trade barriers
[B] Trade Barriers should be lowered equally and without discrimination for all member countries
[C] Trade Barriers can be imposed if a majority of the members of the WTO agree
[D] Trade Barriers should be the same in all member countries so that the result is equivalent to free trade
Show Answer
Correct Answer: B [ Trade Barriers should be lowered equally and without discrimination for all member countries ]
Notes:
The correct answer is that trade barriers should be lowered equally and without discrimination for all member countries. This principle is rooted in the Most-Favored-Nation (MFN) clause of the World Trade Organization (WTO), which mandates that any favorable trading terms offered to one member must be extended to all members. This aims to promote fair competition and prevent trade discrimination, fostering a more open and equitable global trading system. The WTO, established in 1995, has 164 member countries, emphasizing the importance of non-discriminatory trade practices.
15. Which of the following is India’s first payments bank?
[A] Jio Payments Bank Ltd
[B] Paytm Payments Bank
[C] India Post Payments Bank
[D] Airtel Payments Bank
Show Answer
Correct Answer: D [ Airtel Payments Bank ]
Notes:
Fourth option is the correct answer. Airtel Payments Bank is India’s first payments bank.
16. While discussing the pros and cons of the Foreign Direct Investments, a situation called ‘Expropriation’ is discussed. What is ‘Expropriation’?
[A] Expropriation is a situation where government can take control of a firm’s property and assets, if it feels
[B] Expropriation is one of the fundamental means by which one can invest in property
[C] Expropriation is one of the aspects of FDI planning closely related to potential profits and return on
[D] Expropriation is a ban by the Government on firm’s repatriation of profits to its home country
Show Answer
Correct Answer: A [Expropriation is a situation where government can take control of a firm’s property and assets, if it feels]
Notes:
Expropriation is motivated and forceful confiscation and redistribution of private property, where government can take control of a firm’s property and assets, if it feels that the enterprise is a threat to national security
17. Which is the leading state in India in ship breaking industry?
[A] Gujarat
[B] West Bengal
[C] Andhra Pradesh
[D] Jharkhand
Show Answer
Correct Answer: A [Gujarat ]
Notes:
Alang is a census town in Bhavnagar district in the Indian state of Gujarat. In the past three decades, its beaches have become a major worldwide centre for ship breaking. The longest ship ever built, Seawise Giant, was sailed to and beached here for demolition in December 2009.
18. Rolling plan was designed for which of the following periods?
[A] 1974-79
[B] 1978-83
[C] 1980-85
[D] 1985-90
Show Answer
Correct Answer: B [1978-83]
Notes:
The Janta Government terminated the fifth five year plan in 1977-78 and launched its own sixth five year plan for period 1978-83 and called it a Rolling Plan. This second plan is kept changing as per the requirements of the economy (and politics).
19. Which tax causes a burden on the poorer section of the society?
[A] Indirect Tax
[B] Direct Tax
[C] Both Direct and Indirect Tax
[D] None of these
Show Answer
Correct Answer: A [Indirect Tax]
Notes:
Indirect taxes make the distribution of income more unequal because of their regressive effects. The poor will get taxed a higher proportion of their income than the rich, making it a regressive tax.
20. Who among the following regulates the NBFCs in India?
[A] Reserve Bank of India
[B] SEBI
[C] Government of India
[D] None of the above
Show Answer
Correct Answer: A [Reserve Bank of India]
Notes:
The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the [[Reserve Bank of India Act, 1934]] (Chapter III-B) and the directions issued by it.
