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. In the context of share markets in India, a public issue refers to which of the following?
[A] An offer of shares to the general public through a prospectus
[B] An issue of shares only to existing shareholders of the company
[C] An issue of shares to a select group of identified persons on a private basis
[D] A transfer of shares between two existing shareholders on the stock exchange
Show Answer
Correct Answer: A [An offer of shares to the general public through a prospectus]
Notes:
A public issue means an invitation to the public to subscribe to securities through a prospectus. In the Indian market, public issues are broadly classified into IPO and FPO. An IPO is the first public offer by an unlisted company, while an FPO is a later public offer by a listed company. Issues made only to existing shareholders are rights issues, and issues to selected persons on a private basis are private placements.
13. Where was India’s first successful iron and steel industry established?
[A] Parangipettai
[B] Jamshedpur
[C] Kulti
[D] Mumbai
Show Answer
Correct Answer: B [Jamshedpur]
Notes:
Tata Iron and Steel Company (TISCO) was established in Jamshedpur in 1907. Pig iron production began in 1911 and steel production started in 1912. Jamshedpur is located in present-day Jharkhand. TISCO became the first commercially successful iron and steel plant in India, whereas earlier plants in Parangipettai and Kulti eventually failed and did not operate at such a large scale.
14. Which industry is the largest water consumer in India?
[A] Textiles
[B] Thermal power
[C] Paper and pulp
[D] Engineering
Show Answer
Correct Answer: B [Thermal power]
Notes:
Thermal power plants in India use large volumes of water mainly for cooling and steam production. The Central Electricity Authority monitors water consumption by thermal power stations annually. Compared to paper, textiles, and engineering, thermal power contributes the highest industrial water use. India’s thermal electricity generation capacity exceeds 230 GW as of 2023, making it the major industrial water consumer.
15. Which of the following is an alternative way of representing the production function?
[A] Average Product
[B] The Long Run
[C] Isoquant
[D] The Short Run
Show Answer
Correct Answer: C [Isoquant]
Notes:
An isoquant is a firm’s counterpart of the consumer’s indifference curve. An isoquant is a curve that shows all the combinations of inputs that yield the same level of output. ‘Iso’ means equal and ‘quant’ means quantity.
16. 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.
17. When is the national Tourism day celebrated across the country?
[A] January 23
[B] January 24
[C] January 25
[D] January 26
Show Answer
Correct Answer: C [January 25]
Notes:
The national Tourism day is being celebrated in India on January 25 every year. The day is celebrated to raise awareness the global community about the importance of tourism for the country’s economy and its social, political, financial and cultural worth.
18. Which among the following best describes scarcity in economics?
[A] Low demand for a good
[B] High demand and less supply of a good
[C] Low demand as people do not want to consume it
[D] Resources are limited relative to unlimited wants
Show Answer
Correct Answer: D [Resources are limited relative to unlimited wants]
Notes:
Scarcity in economics means that resources are limited, while human wants are unlimited. It is not the same as low demand or a temporary shortage. Because of scarcity, people and economies must make choices about how to allocate scarce resources among competing uses.
19. Who was the first President of the New Development Bank?
[A] Arundhati Bhattacharya
[B] K V Kamath
[C] Arvind Subramanian
[D] Kaushik Basu
Show Answer
Correct Answer: B [K V Kamath]
Notes:
K. V. Kamath was the first President of the New Development Bank, the BRICS-led multilateral development bank. He served as the bank’s inaugural head before being succeeded by Marcos Prado Troyjo in July 2020.
20. 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.
