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. Consider the following fiscal policy measures that a government might adopt to combat inflation:
- Decreasing public expenditure
- Reducing public debt
- Delaying the payment of old debts
- Increasing taxes
Which of the above are correct selective measures?
[A] Only 1, 2 and 3
[B] Only 2, 3 and 4
[C] Only 1, 2 and 4
[D] Only 1, 3 and 4
Show Answer
Correct Answer: D [Only 1, 3 and 4]
Notes:
Decreasing public expenditure and increasing taxes are classic contractionary fiscal measures to reduce demand and combat inflation. Delaying debt payments helps conserve resources for these fiscal actions. However, reducing public debt is not a direct anti-inflation measure, as it does not immediately affect aggregate demand. Thus, 1, 3 and 4 are correct selective anti-inflation fiscal measures.
12. Which authority regulates chit funds in India?
[A] SEBI
[B] RBI
[C] State governments
[D] Central government
Show Answer
Correct Answer: C [State governments]
Notes:
The Chit Funds Act, 1982 is a central law governing chit funds in India. Regulation, registration, and licensing are administered by the state governments. Each state appoints a Registrar of Chits to oversee chit fund activities. Central government sets the legislative framework, but daily regulation and enforcement are delegated to the respective states as per the Act.
13. Natural Gas is one of the materials used in making of Fertilizers. Which among the following is the function of Natural gas in production of Fertilizers?
[A] As a fuel, to supply heat
[B] As a Reducing agent
[C] As a catalyst to produce complex fertilizers
[D] As a feedstock for the production of ammonia
Show Answer
Correct Answer: D [As a feedstock for the production of ammonia]
Notes:
Natural gas, essentially methane, is upgraded by combination with nitrogen from the air to form nitrogen fertilizer. 80% of the gas is used as feedstock for fertilizer while 20% is used for heating the process and producing electricity.
14. Which of the following curves represents the demand of all consumers in the market taken together at different levels of the price of the good?
[A] Monotonic
[B] Indifferent
[C] Market demand
[D] Diminishing
Show Answer
Correct Answer: C [Market demand]
Notes:
The market demand curve is the summation of all the individual demand curves in a given market. It shows the quantity demanded of the good by all individuals at varying price points.
15. Which feature distinguished the Eighth Five-Year Plan (1992-97) from earlier plans? (UPSC Prelims 1996)
[A] It marked the first plan after India’s 1991 economic reforms
[B] It achieved the highest actual growth rate of 6.8%
[C] It introduced industrial delicensing and opening of economy
[D] It targeted creation of 80 million employment opportunities
Show Answer
Correct Answer: A [It marked the first plan after India’s 1991 economic reforms]
Notes:
The Eighth Five-Year Plan (1992-1997) was the first plan implemented after India introduced economic reforms in 1991. The plan focused on indicative planning, market-led economy, liberalization, privatization, and globalization. India’s membership in the World Trade Organization began in January 1995 during this plan. Previous plans were based on centralized state control and public sector dominance.
16. Which of the following conditions are expected in an Unorganised sector?
- Paid Holidays
- Lack of proper working conditions
- Social security from employers
- Lack of protection from legislations
Choose the correct option from the codes given below:
[A] 1 and 2 only
[B] 3 and 4 only
[C] 1, 2 and 4 only
[D] 2 and 4 only
Show Answer
Correct Answer: D [2 and 4 only]
Notes:
The Unorganised sector is marked by low incomes, unstable and irregular employment, and lack of protection either from legislation or trade unions. They use mainly labor-intensive technology. The workers in the unorganized sector, are so scattered that the implementation of the Legislation is very inadequate and ineffective.
17. Which sector was most affected due to the de-industrialization of the British?
[A] Jute
[B] Textile
[C] Ship building
[D] Banking
Show Answer
Correct Answer: B [Textile]
Notes:
The textile industry was the most affected due to the de-industrialization of the British. The British followed the systematic destruction of the Indian Industries. Indian textiles were banned in European markets and Indian markets were flooded with machine-made goods which destroyed the Indian industry.
18. What is re-harvesting known as?
[A] Ratooning
[B] Solid Planting
[C] Mulching
[D] None of the above
Show Answer
Correct Answer: A [Ratooning]
Notes:
Ratoon cropping is growing a fresh crop from the stubbles or suckers of the plant crop without replanting. It is also referred to as stubble cropping, re-harvesting. Sugarcane is cultivated by this method.
19. Which country is currently the world’s largest cotton exporter?
[A] India
[B] USA
[C] Brazil
[D] China
Show Answer
Correct Answer: C [Brazil]
Notes:
Brazil became the largest cotton exporter globally in 2023, surpassing the USA. Brazil’s high-yield production averages 1.8 times more than the USA. Brazil uses double-cropping of cotton following soybeans and has lower production costs. Brazil’s share of world cotton exports is projected to lead through the 2025/26 season. Its improved logistics also support this leading export position.
20. Which oilseeds are used in the Manufacturing of paints?
[A] Linseed
[B] Groundnut
[C] Castor
[D] None of the above
Show Answer
Correct Answer: A [Linseed]
Notes:
Linseed (Alsi in Hindi) has a unique drying property and is suitable for the manufacturing of paints, varnishes, printing ink etc. A small part is used as edible oil also.
