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 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.
12. What are key outcomes of agricultural mechanization? (UPSC Prelims 1988)
[A] Lower cost, higher productivity, and timely operations
[B] Higher productivity and reduced employment
[C] Lower cost, higher productivity, reduced loss
[D] Lower cost, higher productivity, timely operations, reduced employment
Show Answer
Correct Answer: C [Lower cost, higher productivity, reduced loss]
Notes:
Mechanization in agriculture reduces per unit operational costs by increasing efficiency. It enhances per unit productivity and crop yields by improving timeliness of operations. Mechanization minimizes grain losses during harvesting due to precision of machines. Studies in India report that mechanized land preparation decreases labor requirement from 31 hours to around 3 hours per hectare. Improved technical efficiency and better management practices are documented benefits of agricultural mechanization.
13. Which tax contributes most to India's central revenue in Budget 2026-27 estimates?
[A] Goods and Services Tax (GST)
[B] Income Tax
[C] Customs Duty
[D] Corporate Tax
Show Answer
Correct Answer: B [Income Tax]
Notes:
In the Union Budget 2026-27, taxes on income are estimated at ₹14.56 lakh crore, which is higher than corporate tax at ₹12.31 lakh crore and GST at ₹10.19 lakh crore. Customs duty is much lower at ₹2.71 lakh crore. Hence, income tax remains the biggest single contributor among these central tax heads. This makes option 2 the correct answer.
14. Which of the following best defines national income?
[A] Value of final goods and services produced in a financial year
[B] Value of all goods and services produced in a financial year, including intermediate goods
[C] Value of reused goods sold in that financial year
[D] Service rendered by housewife
Show Answer
Correct Answer: A [Value of final goods and services produced in a financial year]
Notes:
National income refers to the value of final goods and services produced in a year. Intermediate goods are excluded to avoid double counting, and reused goods are not counted as current production. Unpaid household services, such as those performed by a housewife, are also generally not included in national income accounting.
15. Which Japanese educator and thinker made a lasting impact on Japan following the 1868 Meiji Restoration?
[A] Francis Fukuyama
[B] Fukuzawa Yukichi
[C] Takero Doi
[D] None of the above
Show Answer
Correct Answer: B [Fukuzawa Yukichi]
Notes:
Fukuzawa Yukichi (1835–1901) was a Japanese educator, writer, and political thinker whose ideas strongly influenced Japan’s modernization after the Meiji Restoration of 1868. He advocated practical learning, independence, and Western-style education, making him one of the most important intellectual figures of modern Japan.
16. Which economist is the brainchild behind the 1991 LPG reforms in India?
[A] P.C.Mehalonibis
[B] Manmohan Singh
[C] Amartya Sen
[D] None of the above
Show Answer
Correct Answer: B [Manmohan Singh]
Notes:
Former Prime Minister Dr. Manmohan Singh is one of India’s leading economists and is known to have been the brain behind India’s socio-economic reforms and economic liberalization.
17. Who among the following economist was awarded the ‘Order of the Rising Sun’ by the Japanese government?
[A] Amartya Sen
[B] Jagadish Banerjee
[C] Amit Mitra
[D] None of the above
Show Answer
Correct Answer: C [Amit Mitra]
Notes:
Amit Mitra was conferred the Order of the Rising Sun by the Government of Japan for his contribution to strengthening India-Japan relations. The honour was announced on April 29, 2006.
18. Which among the following is a guiding force for the capitalist economy?
[A] Social service
[B] Private property
[C] Competition
[D] Profit motive
Show Answer
Correct Answer: D [Profit motive]
Notes:
Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.
19. Which of the following are part of the Quaternary sector?
[A] Banking
[B] Agriculture
[C] Restaurant
[D] Information technology
Show Answer
Correct Answer: D [Information technology]
Notes:
The quaternary sector consists of intellectual activities often associated with technological innovation. It is sometimes called the knowledge economy.
20. Which is not a cause for underutilization of natural resources in India?
[A] Primitive techniques
[B] Shortage of capital
[C] Lack of manpower
[D] Underutilization due to price sensitivities and demand barriers
Show Answer
Correct Answer: C [Lack of manpower]
Notes:
India faces underutilization of resources due to primitive techniques, capital shortage, and infrastructure issues. Manpower is generally adequate, but price sensitivities and demand barriers more directly impact utilization, especially in sectors like LNG and renewables. Manpower is not a primary limiting factor for resource utilization.
