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. Which of the following bodies issues white-colour and blue-colour forms to investors?
[A] SEBI
[B] IrDA
[C] RBI
[D] NSE
Show Answer
Correct Answer: A [ SEBI ]
Notes:
White colour forms are for Resident Indian, and blue colour forms are for NRIs, Foreign Venture Capital, Investor, and Foreign Institutional Investors. These forms are issued by SEBI for investment in capital market.
12. Which tool involves central banks signaling future interest rate intentions?
[A] Forward guidance
[B] Quantitative easing
[C] Open market operations
[D] Reserve requirements
Show Answer
Correct Answer: A [Forward guidance]
Notes:
Forward guidance was widely adopted after the 2008 global financial crisis. The Federal Reserve began explicit forward guidance in 2011. The European Central Bank used this tool in 2013. The Bank of Japan started using forward guidance in 2013. Forward guidance aims to influence market expectations about future monetary policy. It became prominent when policy rates approached zero, limiting conventional monetary tools.
13. What is a golden share in share market parlance?
[A] Share with highest profit from price rise
[B] Share with special voting and veto rights
[C] Share sold before market crash
[D] First share subscribed in an IPO
Show Answer
Correct Answer: B [Share with special voting and veto rights]
Notes:
A golden share grants special voting rights and veto power over company decisions. The share is often held by the government or promoters during privatization or restructuring. The golden share can block major corporate actions regardless of the actual shareholding percentage. Golden shares have been used in countries like India and the UK for strategic interests. They are typically non-transferable and limited in duration or scope.
14. In which of the following case, law of demand fails?
[A] Giffen goods
[B] Normal goods
[C] Inferior goods
[D] Both Giffen and Inferior goods
Show Answer
Correct Answer: A [Giffen goods]
Notes:
A Giffen good, in economic theory, is a good that is in greater demand as its price increases. For example, if the price of an essential food staple, such as rice, rises it may mean that consumers have less money to buy more expensive foods, so they will actually be forced to buy more rice.
15. Which of the following is also regarded as Disguised unemployment?
[A] Under employment
[B] Frictional unemployment
[C] Seasonal unemployment
[D] Cyclical unemployment
Show Answer
Correct Answer: A [Under employment]
Notes:
Under employment is a condition in which people in labor force are employed at less than full time or require regular job or at jobs inadequate with respect to training or economic need.
16. Which focus marked the Seventh Five-Year Plan’s long-term fiscal policy?
[A] Capital formation by increasing money income
[B] Reforming the taxing system
[C] Making tax laws easily comprehensible
[D] Tackling deep-seated poverty and unemployment
Show Answer
Correct Answer: D [Tackling deep-seated poverty and unemployment]
Notes:
The Seventh Five-Year Plan emphasized reducing poverty and unemployment, aiming to improve quality of life and create productive rural employment opportunities. The policy focused on social objectives alongside economic growth, prioritizing poverty alleviation over tax reforms or comprehension.
17. Which economist publicly opposed Keynes and supported private spending during a recession?
[A] Thomas Malthus
[B] Friedrich Hayek
[C] Arthur Pigou
[D] Gary Becker
Show Answer
Correct Answer: B [Friedrich Hayek]
Notes:
Friedrich Hayek might be considered the poster boy for the Austrian School of Economics. Influenced and mentored by Ludwig von Mises, a prominent figure in the Libertarian movement, Hayek was awarded the Nobel Prize for Economics in 1974. While working at the London School of Economics he publicly opposed Keynes and his theories of government spending as the solution to the Great Depression, arguing instead that private investment was the path to prosperity and development.
18. Which Indian Economist created Dui-doku?
[A] Raghuram Rajan
[B] I.G.Patel
[C] Jayanti Gosh
[D] Kaushik Basu
Show Answer
Correct Answer: D [Kaushik Basu]
Notes:
Kaushik Basu created Dui-doku, a competitive two-player version of Sudoku. He is an Indian economist who previously worked as a chief economic advisor to Manmohan Singh govt.
19. Which is the first organic state in India?
[A] Kerala
[B] Sikkim
[C] Assam
[D] Arunachal Pradesh
Show Answer
Correct Answer: B [Sikkim]
Notes:
Sikkim was recognized as the country’s first organic state in 2018. Uttarakhand is the second organic sate in India.
20. Which among the following is caused by a lack of proper infrastructure?
[A] Low Export cost
[B] Less devlopment of interior region
[C] More imports
[D] High Cost of goods
Show Answer
Correct Answer: B [Less devlopment of interior region]
Notes:
The lack of infrastructure creates a lot of problems mainly regarding the development of interior regions. The two most vital sectors i.e. agriculture and industry could not make much headway in the absence of proper infrastructural facilities in the country. Moreover, due to the absence of proper infrastructural facilities, the development potential of different regions of the country largely remains under-utilized.
