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. In which of the following market forms a firm does not exercise control over price?
[A] Monopoly
[B] Mixed Competition
[C] Perfect competition
[D] Oligopoly
Show Answer
Correct Answer: C [Perfect competition]
Notes:
In economics, specifically general equilibrium theory, a perfect market is defined by several idealizing conditions, collectively called perfect competition.
12. Which among the following is not an instrument of fiscal policy?
[A] Taxation
[B] Public expenditure
[C] Public debt
[D] Credit Rationing
Show Answer
Correct Answer: D [Credit Rationing]
Notes:
The 3 main instruments of fiscal policy are government taxation and public expenditure and public debt. Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy.
13. Which of the following actions would tighten banks' liquidity position?
[A] Only the central bank selling government securities
[B] Only stricter liquidity regulations that limit deployable funds
[C] Both of the above actions
[D] Only central bank quantitative easing
Show Answer
Correct Answer: C [Both of the above actions]
Notes:
Both actions can tighten banks' liquidity position. When a central bank sells government securities, reserves are drained from the banking system, reducing immediately available funds. Stricter liquidity regulations can also force banks to hold more safe liquid assets or meet higher liquidity buffers, leaving less money available for lending and investment. Quantitative easing does the opposite, because it injects reserves into the system and eases liquidity conditions.
14. Which of the following statements about physical wellness and financial planning are correct?
[A] Preventive health spending can reduce future medical costs.
[B] Physical wellness is irrelevant to financial planning.
[C] A comprehensive financial plan should account for health-related expenses.
[D] Both A and C
Show Answer
Correct Answer: D [Both A and C]
Notes:
Statements 1 and 3 are correct. Preventive healthcare can help lower future medical expenses, and health-related costs should be included in a sound financial plan. Statements 2 is incorrect because physical wellness can affect financial security and expenses.
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 are the specialized wings of NITI Aayog?
1. Research Wing
2. Consultancy Wing
3. Team India Wing
Select the correct option from the codes given below:
[A] Only 1
[B] Only 2
[C] Only 2 & 3
[D] 1, 2 & 3
Show Answer
Correct Answer: D [1, 2 & 3]
Notes:
NITI Aayog consists of a number of specialized wings such as the research wing, the consultancy wing, the team India wing. NITI Aayog functions in close cooperation, consultation and coordination with the Ministries of the Central Government, and State Governments of India.
17. Which type of Economy is Indian Economy?
[A] Mixed
[B] Market
[C] Capitalist
[D] Socialist
Show Answer
Correct Answer: A [Mixed]
Notes:
Indian Economy is a mixed economy where both state and market play a key role in the management of economy. In India both the Public sector as well as the private sector coexist.
18. Who among the following prepared the first national income estimate in India?
[A] Lord Rippon
[B] Dadabhai Naoroji
[C] Lord Macaulay
[D] C.R. Das
Show Answer
Correct Answer: B [Dadabhai Naoroji]
Notes:
Dadabhai Naoroji is credited with preparing the first national income estimate in India in 1876. His early work on India’s income and poverty became important in the study of Indian economics and nationalist thought. The other options are not associated with this estimate.
19. Which country was the top paperboard importer in 2021?
[A] Germany
[B] United States
[C] China
[D] Italy
Show Answer
Correct Answer: C [China]
Notes:
China imported 12.7 million metric tons of paperboard in 2021. Germany was the second largest importer, followed by the United States and Italy. China surpassed other countries in paperboard imports according to 2021 international trade data.
20. What percentage of India’s total silk is produced by Northeast India?
[A] 12%
[B] 18%
[C] 25%
[D] 34%
Show Answer
Correct Answer: B [18%]
Notes:
The Northeast region contributes about 18% of India’s total silk production. Assam produced 5,721 metric tonnes of silk in 2022-23. The region produces all four types of natural silk: Mulberry, Muga, Eri, and Oak Tasar. Northeast India is the only area in the country that produces Oak Tasar silk. Muga silk is found exclusively in Assam.
