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. With reference to the business, what is working capital?
[A] The investment made in the business
[B] Fixed assets
[C] Circulating assets- stocks, cash and debts owed to the business
[D] Amount spent on machinery or for building up stock
Show Answer
Correct Answer: C [ Circulating assets- stocks, cash and debts owed to the business ]
Notes:
Current Assets minus Current Liabilities is known as working capital.
12. If interest payments are subtracted from gross fiscal deficit, the remainder will be__:
[A] Revenue deficit
[B] Gross primary deficit
[C] Capital deficit
[D] Budgetary deficit
Show Answer
Correct Answer: B [ Gross primary deficit ]
Notes:
Primary deficit is the gross deficit which is obtained by subtracting interest payments from budget deficit of any country of a particular year. We need to know the value of primary deficit, while calculating the fiscal deficit. Alternative Definition of Primary Deficit Primary deficit corresponds to the net borrowing, which is required to meet the expenditure excluding the interest payment. Primary Deficit = (Fiscal Deficit – Interest Payment)
13. At which rate does RBI borrow funds from commercial banks?
[A] Bank Rate
[B] Repo Rate
[C] Reverse Repo Rate
[D] Statutory Liquidity Ratio
Show Answer
Correct Answer: C [Reverse Repo Rate]
Notes:
The reverse repo rate is the rate at which the Reserve Bank of India borrows money from commercial banks. It is used to absorb liquidity from the banking system. RBI conducts reverse repo operations as part of its monetary policy framework. As of June 2024, the reverse repo rate is 3.35%. Reverse repo was introduced in 1996 under Section 17(4B) of the RBI Act, 1934.
14. Which among the following is/are correct regarding Call Money?
[A] No Collateral is required in Call Money transaction
[B] It is the money lent/borrowed for maximum period of 30 days
[C] It is the money lent/borrowed for maximum period of 45 days
[D] Banks borrow primarily from customers
Show Answer
Correct Answer: A [ No Collateral is required in Call Money transaction ]
Notes:
Call money is the money lent/borrowed for maximum period of 14 days. No Collateral is required in Call Money transaction. Banks borrow primarily from the inter-bank (call money) market.
15. Which Mumbai market is famous for antiques and vintage items? (UPSC Prelims 1983)
[A] Chor Bazaar
[B] Ima Keithel
[C] Laad Bazaar
[D] Attar Bazaar
Show Answer
Correct Answer: A [Chor Bazaar]
Notes:
Chor Bazaar, located in South Mumbai, is over 150 years old and renowned for antiques, vintage collectibles, old clocks, Victorian furniture, and rare items. It is one of India’s most historic secondhand markets, attracting antique enthusiasts and tourists alike.
16. Which of the following statements is not correct for economically underdeveloped countries? (UPSC Prelims 1987)
[A] Involvement of a very little proportion of labour in primary occupations
[B] Lower percentage of literacy
[C] Mass unemployment
[D] High birth rate
Show Answer
Correct Answer: A [Involvement of a very little proportion of labour in primary occupations]
Notes:
Primary jobs involve getting raw materials from the natural environment e.g. Mining, farming and fishing. There are a lot of people who are engaged in primary occupations in an economically underdeveloped country.
17. What is India’s current share of world tea exports? (UPSC Prelims 1990)
[A] More than 40%
[B] Between 20% and 30%
[C] About 10%
[D] Less than 5%
Show Answer
Correct Answer: C [About 10%]
Notes:
India accounted for approximately 10% of global tea exports as of 2025. India exported 280.40 million kilograms of tea in 2025 according to the Tea Board of India. China remains the largest producer and exporter of tea worldwide, producing about 3 million tons annually. Sri Lanka and Kenya are also major exporters, but India’s share stays around one-tenth of world exports.
18. Which among the following best describes scarcity in economics?
[A] Low demand for good
[B] High demand and less supply of good
[C] Low demand as people don’t want to consume it
[D] Goods available are not free
Show Answer
Correct Answer: D [Goods available are not free]
Notes:
Scarcity means limited goods are for more number of people. In an Economy the resources are scarce and the wants are unlimited.
19. 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.
20. Which of the following statements is true regarding a mixed economy?
[A] Private property is not encouraged
[B] Monopoly doesn’t exist in market
[C] The government play a role in the production and distribution of resources
[D] Consumers choice is limited
Show Answer
Correct Answer: C [The government play a role in the production and distribution of resources]
Notes:
In a mixed economic system, there is a cross between a market economy and the Socialist economy. In the most common types of mixed economies, the market is more or less free of government ownership except for a few key areas like transportation or sensitive industries like defense and railroad.
