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 exchange rates is the relative price of foreign goods in terms of domestic goods?
[A] Nominal
[B] Real
[C] Artificial
[D] Fixed
Show Answer
Correct Answer: B [Real]
Notes:
The real exchange rate measures the price of foreign goods relative to the price of domestic goods. Mathematically, the real exchange rate is the ratio of a foreign price level and the domestic price level, multiplied by the nominal exchange rate.
12. Which crop has the lowest international trade compared to total global production? (UPSC Prelims 1995)
[A] Rice
[B] Coffee
[C] Rubber
[D] Wheat
Show Answer
Correct Answer: A [Rice]
Notes:
In 2023–2024, global rice production was about 520 million metric tons. International rice trade accounts for less than 10 percent of total production. Rice is mainly consumed domestically in producing countries such as China and India. The largest exporters export a small share of total production. Rice is a staple for over half the world’s population, contributing to low export volumes.
13. Capitalist economic system is the feature of which of these countries?
[A] USA
[B] China
[C] Russia
[D] India
Show Answer
Correct Answer: A [USA]
Notes:
USA has a capitalist system followed in its economy. The prices are controlled by the market forces of demand and supply.
14. Which of the below statements is incorrect regarding Market Economy?
[A] Government doesn’t control the factors of production
[B] Government decides which goods to produce and how much
[C] Consumers and producers choice plays a key role in economy
[D] The profit motive is the main reason for increased efficiency
Show Answer
Correct Answer: B [Government decides which goods to produce and how much]
Notes:
Capitalist economy is also known as free market economy. It is based on the private sector and the market forces . The demand supply forces drive the market. Profit motive is the main reason for increased efficiency in private sector.
15. The classification of Sectors in an economy into the public and privates sector is on the basis of which of the following?
[A] On the basis of activity
[B] On the basis of work condition
[C] On the basis of Ownership
[D] None of the above
Show Answer
Correct Answer: C [On the basis of Ownership]
Notes:
On the basis of ownership, the economy is divided into public and private sectors. The public sector is owned by the government whereas the private sector is owned by Private individuals.
16. How much FDI is permitted in e-commerce in India?
[A] 75% in marketplace; 0% in inventory-based
[B] 100% in B2B and marketplace; 0% inventory-based
[C] 100% in all e-commerce models
[D] 51% in marketplace; 100% in B2B
Show Answer
Correct Answer: B [100% in B2B and marketplace; 0% inventory-based]
Notes:
India allows 100% FDI under the automatic route in B2B e-commerce and marketplace model since Press Note 3 (2016). FDI is not permitted in the inventory-based model. The marketplace model connects buyers and sellers without holding inventory. The restrictions were reiterated in Press Note 2 (2018). The Department for Promotion of Industry and Internal Trade regulates these FDI norms.
17. When did the first recorded stock market scam occur in India?
[A] 1865
[B] 1992
[C] 1998
[D] 1988
Show Answer
Correct Answer: A [1865]
Notes:
The first stock market scam in India occurred in 1865 during the American Civil War when bear cartels manipulated prices. The most famous scam was the Harshad Mehta scam in 1992, leading to major regulatory reforms through the SEBI Act, 1992.
18. Which five-year plan has the objective of “Faster and more inclusive growth”?
[A] 10th
[B] 11th
[C] 9th
[D] 12th
Show Answer
Correct Answer: B [11th]
Notes:
The 11th Five-year plan was from 2007-12. It was prepared by the C. Rangarajan. Its main theme was “faster and more inclusive growth”.
19. What is growing of trees or shrubs around or among crops known as?
[A] Agro forestry
[B] Ally cropping
[C] Forestry
[D] Multi cropping
Show Answer
Correct Answer: A [Agro forestry]
Notes:
Agroforestry is a land use management system in which trees or shrubs are grown around or among crops or pastureland. This intentional combination of agriculture and forestry has varied benefits, including increased biodiversity and reduced erosion.
20. Which is the largest meat-producing state in India?
[A] Bihar
[B] Uttar Pradesh
[C] West Bengal
[D] Maharashtra
Show Answer
Correct Answer: C [West Bengal]
Notes:
India’s global rank in meat production is 4th. The total Meat production in the country is estimated as 10.50 million tonnes during 2024-25. The meat production from poultry is 5.18 million tonnes, contributing about half of total meat production.The top five meat producing States are West Bengal (12.46%), Uttar Pradesh (12.20%), Maharashtra (11.57%), Andhra Pradesh (10.84%) and Telangana (10.49%). They together contribute 57.55% of total meat production in the country.
