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 is used by RBI for sterilization of the Capital Inflows?
[A] Base Rate System
[B] CRAR Obligations
[C] Open Market Operations
[D] Credit Authorization Scheme
Show Answer
Correct Answer: C [ Open Market Operations ]
Notes:
An open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks. The central bank can either buy or sell government bonds in the open market.
12. The Financial Action Task Force (FATF) mainly combats which activity?
[A] Climate change financing
[B] Money laundering and terrorist financing
[C] Development aid management
[D] Quantum computing in finance
Show Answer
Correct Answer: B [Money laundering and terrorist financing]
Notes:
The Financial Action Task Force is an intergovernmental body established in 1989 at the G7 Summit in Paris. FATF sets international standards to prevent money laundering and terrorist financing. The organization developed 40 Recommendations as technical standards. It conducts mutual evaluations of members. FATF monitors risks and trends in global money laundering and terrorist financing.
13. What is the minimum CRR rate that the RBI can prescribe for scheduled commercial banks under Section 42(1) of the RBI Act, 1934?
[A] No Limit
[B] 3%
[C] 4%
[D] 6%
Show Answer
Correct Answer: A [No Limit]
Notes:
Under Section 42(1) of the RBI Act, 1934, the Reserve Bank of India may prescribe the Cash Reserve Ratio for scheduled commercial banks without any statutory floor or ceiling. In other words, the law does not fix a minimum or maximum CRR rate. The actual CRR notified by RBI can change from time to time through its circulars and directions, but the enabling provision itself leaves the rate open-ended.
14. Which of the following define Deficit Financing? (UPSC Prelims 1987)
[A] Difference of total expenditure and income by revenue from all sources
[B] Financing expenditure exceeding government receipts through borrowing or monetary financing
[C] Difference in borrowing and external and internal resources
[D] Capital expenditure on items of public construction, public enterprises and public borrowings
Show Answer
Correct Answer: B [Financing expenditure exceeding government receipts through borrowing or monetary financing]
Notes:
In the broad sense used here, deficit financing means funding government expenditure that exceeds receipts through borrowing or monetary financing. In narrower historical Indian usage, the term often referred specifically to creation of money to meet the deficit.
15. Which factor limits tourism growth in India despite its vast attractions?
[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 five year plan highlighted the modernization of Industries?
[A] 5th
[B] 8th
[C] 7th
[D] 6th
Show Answer
Correct Answer: B [8th]
Notes:
Modernization of industries was a major highlight of the Eighth Plan. It is also known as Rao-Manmohan plan as economic liberalization was the highlight of this plan. Under this plan, the gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and foreign debt. The plan was launched with twin objectives of alleviation of poverty and unemployment.
17. How many nutrients information is printed on the soil health card?
[A] 12
[B] 13
[C] 11
[D] 16
Show Answer
Correct Answer: A [12]
Notes:
Soil health card is a printed report which contains the nutrient status of soil with respect to 12 nutrients: pH, Electrical Conductivity (EC), Organic Carbon (OC), Nitrogen (N), Phosphorus (P), Potassium (K), Sulphur (S), Zinc (Zn), Boron (B), Iron (Fe), Manganese (Mn), Copper (Cu) of farm holdings. It will be provided for every 3 years.
18. Which of the below is / are used as Biofertilizer(s)?
- Agaricus
- Nostoc
- Spirogyra
- Azospirillum
Select the correct option from the codes given below:
[A] 1 and 2 only
[B] 3 and 4 only
[C] 2 and 4 only
[D] 1,2 and 3 only
Show Answer
Correct Answer: C [2 and 4 only ]
Notes:
Nostoc and Azospirillium are the organisms that are used as bio fertilizers. Nostoc is a blue green algae while Azospirillium is aerobic free-living nitrogen fixers which live in associative symbiosis.
19. Consider the following entities associated with the Public Distribution System (PDS) in India:
- Fair Price Shops
- Cooperative Stores
- Military Canteens
- Food Corporation of India (FCI) depots
Which of the above are actual parts of the Public Distribution System?
[A] Only 1 and 4
[B] Only 2 and 3
[C] All of the above
[D] Only 1
Show Answer
Correct Answer: A [Only 1 and 4]
Notes:
The Public Distribution System (PDS) in India primarily includes Fair Price Shops—the retail outlets where food grains are distributed to beneficiaries—and Food Corporation of India (FCI) depots, which manage the storage and movement of grains. Cooperative Stores and Military Canteens operate outside the PDS framework and are not involved in its distribution network.
20. Which is the largest fish producing state in India?
[A] West Bengal
[B] Andhra Pradesh
[C] Gujarat
[D] Kerala
Show Answer
Correct Answer: B [Andhra Pradesh]
Notes:
Andhra Pradesh produced approximately 50 lakh metric tonnes of fish in 2023. The state contributed about 22% of India’s total fish production. Andhra Pradesh leads in aquaculture, especially shrimp farming. Marine and inland fisheries are the primary sources. The state surpassed West Bengal in fish production figures after 2021. West Bengal and Gujarat hold second and third positions respectively in recent years.
