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. Custom duty is mainly an instrument of which policy?
[A] Monetary Policy
[B] Industrial Policy
[C] Foreign Trade Policy
[D] Fiscal Policy
Show Answer
Correct Answer: C [Foreign Trade Policy]
Notes:
Customs duty is governed by the Customs Act, 1962. It is imposed to regulate import and export of goods. The Directorate General of Foreign Trade (DGFT) administers India’s foreign trade policies. The Foreign Trade Policy of India is updated every five years. Customs duties are revised to align with international agreements and World Trade Organization guidelines.
12. Which of these is used as promise from a bank to make a payment assuming certain conditions are met?
[A] Cash Credit
[B] Over Draft
[C] Letter of Credit
[D] Term Loan
Show Answer
Correct Answer: C [Letter of Credit]
Notes:
A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.
13. Which of the following is the situation, when there is only one buyer and one seller of product?
[A] Public monopoly
[B] Monopsony
[C] Franchised monopoly
[D] Bilateral monopoly
Show Answer
Correct Answer: D [Bilateral monopoly]
Notes:
A bilateral monopoly is a market structure consisting of both a monopoly (a single seller) and a monopsony (a single buyer).
14. Which of the following is an economic system combining private and state enterprise?
[A] Private economy
[B] Market economy
[C] Mixed economy
[D] Centrally planned economy
Show Answer
Correct Answer: C [Mixed economy]
Notes:
A mixed economy is variously defined as an economic system blending elements of market economies with elements of planned economies, free markets with state interventionism, or private enterprise with public enterprise.
15. What is marginal utilty in economics signify?
[A] Small utlity
[B] Additional utlity
[C] Minimum utility
[D] Satisfied utilty
Show Answer
Correct Answer: B [Additional utlity]
Notes:
Marginal Utility is the additional utility derived from the consumption of an additional unit of commodity. It quantifies the added satisfaction that a consumer garners from consuming additional units of goods or services.
16. Who among the following receives subsidies from the government?
[A] Sellers
[B] Buyers
[C] Manufacturers
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Subsidy a negative tax when the government gives money to reduce the price. A seller receives a subsidy to reduce the price for consumers. A manufacturer receives a subsidy for inputs incurred by them. A buyer sometimes receives a direct subsidy on important essentials like gas.
17. 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.
18. Which economy is based on the state ownership of resources and factors of production?
[A] Capitalist economy
[B] Mixed economy
[C] Socialist economy
[D] None of the above
Show Answer
Correct Answer: C [Socialist economy]
Notes:
In Socialist economy a large part of the economic system is controlled by a centralized power. Since the government is such a central feature of the economy, it is often involved in everything from planning to redistributing resources.
19. What is referred to as the “invisible hand” in a market economy?
[A] Trade
[B] Money
[C] Demand and supply
[D] Competition
Show Answer
Correct Answer: D [Competition]
Notes:
Adam Smith’s “invisible hand” describes competition, which guides market resources efficiently and benefits society even if individuals act in self-interest. This concept is foundational in classical economic theory and emphasizes the self-regulating nature of competitive markets.
20. Which of the following measures are not for the protection of workers in the unorganized sector?
[A] Government fixing minimum wages and minimmum working hours
[B] Government providing cheap loans to self employed people
[C] Government providing subsidised food and education
[D] None of the above
Show Answer
Correct Answer: D [None of the above]
Notes:
All the given options are the measures taken by the government for the protection of workers in unorganized workers. Because of the conditions in the unorganized sector, there is a need for the government to give protection to these workers.
