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 various types of Banking, what is “Mixed Banking”?
[A] when banks undertake the activities of commercial and investment banking together
[B] when banks undertake the activities of wholesale and retail banking together
[C] when banks undertake the activities of offline and online banking together
[D] when banks undertake the activities of commercial and cooperative banking together
Show Answer
Correct Answer: A [when banks undertake the activities of commercial and investment banking together]
Notes:Mixed Banking is the system in which banks undertake activities of commercial and investment banking together.
- These banks give short-term and long-term loans to industrial concerns.
- The banks appoint experts which give valuable advice on various financial issues and also help gauge the financial health of companies.
- Industries don’t have to run to different places for differential financial needs.
- They thus promote rapid industrialization.
- They may however pose a grave threat to liquidity of a bank and lead to bad debts.
12. Which of the following correctly define India’s Foreign Exchange rate system?
[A] Fixed
[B] Free float
[C] Managed float
[D] Fixed target of band
Show Answer
Correct Answer: C [Managed float]
Notes:
In India, the exchange rate system is managed floating from 1994 onwards and hence the relevant currency movements are appreciation and depreciation. Managed float regime is the environment in which exchange rates fluctuate from day to day.
13. In which of the following cities Diesel Locomotive Works of the Indian Railways located?
[A] Varanasi
[B] Chennai
[C] Mumbai
[D] Jhansi
Show Answer
Correct Answer: A [Varanasi]
Notes:
The Diesel Locomotive Works (DLW) in Varanasi, India, is a production unit owned by Indian Railways, that manufactures diesel-electric locomotives and its spare parts. It is the largest diesel electric locomotive manufacturer in India. It is located on DLW to BHU road of the metropolitan city of Varanasi.
14. Which of the following is the cause of inflation?
[A] Increase in money supply
[B] Fall in production
[C] Increase in money supply and fall in production
[D] Decrease in money supply and fall in production
Show Answer
Correct Answer: C [Increase in money supply and fall in production]
Notes:
Inflation is a situation of a sustained increase in the general price level in an economy.
There are two main causes of inflation: Demand-pull and Cost-push. Both are responsible for a general rise in prices in an economy.
Cost-push occurs when supply cost force prices higher. If the inflation in an economy is of the cost-push type, then the inflationary situation usually leads to a fall in production.
Demand-pull inflation is used by Keynesian economics to describe the price levels rise because of an imbalance in the aggregate supply and demand. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices go up.
15. Which among the following is correct regarding the supply curve?
[A] It is relation between price of good and quantity produced
[B] It is a negatively sloped curve
[C] It is relation between price and quantity supplied
[D] None of the above
Show Answer
Correct Answer: C [It is relation between price and quantity supplied ]
Notes:
The supply curve reflects the relationship between the price and quantity supplied graphically. It is a positively sloped curve. It becomes flatter in the long run as price becomes constant after a certain time.
16. Which economist was the first to go against the view free markets would automatically provide full employment?
[A] John Maynard Keynes
[B] J S Mill
[C] Milton Friedman
[D] Adam Smith
Show Answer
Correct Answer: A [John Maynard Keynes]
Notes:
British economist, John Maynard Keynes, argued against the long-held view that free markets would automatically provide full employment, spearheading a revolution in economic thinking. He proposed that state intervention is required during boom and bust cycles of the economy, a policy adopted by most western economies during the thirties. This went out of fashion by the seventies, but the world still looks to the Keynesian policy during economic crises.
17. 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.
18. Which of the following conditions are expected in an Unorganised sector?
- Paid Holidays
- Lack of proper working conditions
- Social security from employers
- Lack of protection from legislations
Choose the correct option from the codes given below:
[A] 1 and 2 only
[B] 3 and 4 only
[C] 1, 2 and 4 only
[D] 2 and 4 only
Show Answer
Correct Answer: D [2 and 4 only]
Notes:
The Unorganised sector is marked by low incomes, unstable and irregular employment, and lack of protection either from legislation or trade unions. They use mainly labor-intensive technology. The workers in the unorganized sector, are so scattered that the implementation of the Legislation is very inadequate and ineffective.
19. Which sector has gained maximum from the 1991 LPG reforms?
[A] Primary
[B] Secondary
[C] Tertiary
[D] Unorganised
Show Answer
Correct Answer: C [Tertiary]
Notes:
Post-1991 LPG reforms the tertiary sector has grown more than others. It contributes about 54% to GDP employing 31% workforce. The highly educated English speaking labour in the country has taken advantage of this growth.
20. How many SDG’s are selected by NITI Aayog for the SDG index?
[A] 14
[B] 13
[C] 15
[D] 12
Show Answer
Correct Answer: B [13]
Notes:
The SDG index by NITI Aayog has been constructed spanning across 13 out of 17 SDGs (leaving out Goals 12, 13, 14, and 17). It tracks the progress of all the States and Union Territories (UTs) on a set of 62 National Indicators, measuring their progress on the outcomes of interventions and schemes of the Government of India.