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. A rise in SENSEX in India indicates which of the following?
[A] There is a rise in the prices of shares of all companies registered with Bombay Stock exchange
[B] There is a rise in the prices of shares of all companies registered with National Stock Exchange
[C] There is an overall rise in the prices of a group of shares in BSE
[D] There is an overall rise in the prices of a group of shares in NSE
Show Answer
Correct Answer: C [ There is an overall rise in the prices of a group of shares in BSE ]
Notes:
A share market Index shows how a specified portfolio of share prices is moving in order to give an indication of market trends. The BSE SENSEX is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on Bombay Stock Exchange.
12. The payment and settlement system in India is managed by_?
[A] SEBI
[B] RBI
[C] National Payments Corporation of India
[D] Ministry of Finance
Show Answer
Correct Answer: B [ RBI ]
Notes:
RBI manages the payment and settlement system in India.
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 trade agreement has India finalized with the European Union recently? (UPSC Prelims 1984)
[A] Rupee trade
[B] Free Trade Agreement (FTA)
[C] Barter trade
[D] Unilateral trade
Show Answer
Correct Answer: B [Free Trade Agreement (FTA)]
Notes:
India and the European Union concluded a Free Trade Agreement in 2024. The agreement includes gradual reduction of tariffs and covers approximately 33 billion of Indian exports. The FTA provides deeper access to 144 EU services sub-sectors. The EU is India’s largest trading partner, with bilateral trade reaching 136 billion in 2024-25. The EU represents around 25% of global GDP.
15. Which factor limits tourism growth in India despite its vast attractions? (UPSC Prelims 1999)
[A] Distances between attractions are too large
[B] India is too hot for tourists
[C] Picturesque resorts are inaccessible
[D] Tourism infrastructure is inadequate
Show Answer
Correct Answer: D [Tourism infrastructure is inadequate]
Notes:
The Ministry of Tourism recognizes infrastructure inadequacy as a major barrier to tourist arrivals. India’s tourist accommodation density and quality lag behind global averages. Major cities and remote tourist destinations face deficits in hotels, transportation, and sanitation. Government schemes like Swadesh Darshan and PRASHAD launched in 2014 and 2015 target these infrastructural gaps. Despite natural and cultural attractions, visitor growth remains below international benchmarks due to these limitations.
16. Which of the following is not an essential condition for perfect competition?
[A] Homogeneous products
[B] Many sellers and buyers
[C] Freedom of entry and exit
[D] None of the above
Show Answer
Correct Answer: D [None of the above]
Notes:
The essential conditions for perfect competition in a market are :
1. homogeneous products
2. many sellers and buyers
3. freedom of entry and exit
4. firms are price takers and not price makers
17. Which of the following is important for a traditional economic system?
[A] History
[B] social welfare
[C] profit
[D] trade
Show Answer
Correct Answer: A [History]
Notes:
A traditional economy is based on a traditional approach. These economies are based on ancient rules and are the most basic type of economy. The focus in a traditional economy is only on the goods and services that match their customs, beliefs, and history.
18. Which country is the largest seafood exporter globally?
[A] Vietnam
[B] Norway
[C] China
[D] Ecuador
Show Answer
Correct Answer: C [China]
Notes:
China leads the world in seafood exports with an estimated $24.8 billion USD in 2025. China has the largest aquaculture production worldwide, including major species like tilapia, carp, and shrimp. China also processes seafood for re-export in global markets. Norway, Vietnam, and Ecuador follow China in global seafood export rankings based on recent international trade data.
19. Which Indian state has the largest bamboo bearing area?
[A] Assam
[B] Madhya Pradesh
[C] Arunachal Pradesh
[D] Chhattisgarh
Show Answer
Correct Answer: B [Madhya Pradesh]
Notes:
According to India State of Forest Report 2023, Madhya Pradesh has the largest bamboo bearing area in India, covering approximately 20,421 square kilometers. The state leads ahead of Arunachal Pradesh, Maharashtra, and Odisha in bamboo bearing area. Total bamboo bearing area in India is reported as 1,54,670 square kilometers. Data is based on forest survey as of 2023.
20. Which state government introduced direct marketing Krushak Bazar?
[A] Odisha
[B] Haryana
[C] Karnataka
[D] None of the above
Show Answer
Correct Answer: A [Odisha]
Notes:
States have introduced direct marketing of farm produce, examples being the Uzhavar Sandhai (Tamil Nadu), the Rythu Bazaar (Andhra Pradesh and Telangana), the Raitha Santhe (Karnataka), the Apni Mandi (Punjab) and the Krushak Bazaar – (Odisha).
