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 among the following is a qualitative tool of monetary policy? 
[A] Bank Rate
[B] Credit Ceiling
[C] Credit rationing
[D] Cash Reserve Ratio

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12. What is the correct definition of an inflationary gap?
[A] The difference between the price of a product at two times
[B] The difference between actual GDP and potential GDP when actual GDP exceeds potential GDP
[C] The difference between national expenditure and total expenditure
[D] The difference between estimated fiscal deficit and actual fiscal deficit

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13. Which among the following is the primary difference between a free trade area and a customs union?
[A] members of a free trade area adopt a common set of barriers for trade between the members
[B] a free trade area is considered a trade bloc and a customs union is not
[C] members of a customs union adopt a common set of external trade barriers
[D] a free trade area can include parts of a country and a customs union includes entire countries

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14. What is the primary operational role of MUDRA (SIDBI) Bank?
[A] Provide direct loans to micro enterprises up to ₹10 lakh
[B] Undertake refinance and support services like portal management and data analysis
[C] Establish foreign direct investment channels for Indian MSMEs
[D] Finance only high-growth manufacturing startups

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15. Bangladesh is India’s main competitor in the export of which product? (UPSC Prelims 1991)
[A] Cotton garments
[B] Jute
[C] Cement
[D] Pharmaceuticals

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16. In which of the following circumstances, the total utility is maximum?
[A] Marginal utility is maximum
[B] Marginal utility = 0
[C] Marginal utility is minimum
[D] None of the above

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17. Which among the following best describes scarcity in economics?
[A] Low demand for good
[B] High demand and less supply of good
[C] Low demand as people don’t want to consume it
[D] Goods available are not free

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18. Which sector contributed most to India’s National Income in 2025-26?
[A] Unorganised
[B] Public
[C] Organised
[D] None of the above

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19. What is growing of 2 crops in alternate rows known as?
[A] Relay cropping
[B] Row cropping
[C] Mixed cropping
[D] None of the above

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20. Which Northeastern state has the highest forest cover by percentage of area?
[A] Mizoram
[B] Arunachal Pradesh
[C] Assam
[D] Meghalaya

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