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 one out of the following is least liquid among the measures of money supply?
[A] M1
[B] M2
[C] M3
[D] M4
Show Answer
Correct Answer: D [M4]
Notes:
Liquidity order is M1>M2>M3>M4 i.e. M1 is most liquid and M4 is least liquid.
12. Which is a primary cause of inflation? (UPSC Prelims 1979).
[A] Increase in money supply
[B] Fall in production
[C] Increase in money supply and fall in production
[D] Decrease in money supply and rise in production
Show Answer
Correct Answer: C [Increase in money supply and fall in production]
Notes:
Inflation is caused by an increase in the money supply and a decrease in production. Demand-pull inflation arises when the growth in money supply surpasses economic output. Cost-push inflation occurs with supply shocks or reduced production. Both factors together can increase the general price level. India has experienced inflation due to these sources in multiple years.
13. Why was Indian cotton industry inferior to England’s during British rule? (UPSC Prelims 1983)
[A] Plenty of raw material was available
[B] Lack of skilled technicians and managers
[C] Large and increasing domestic market
[D] India was traditional home for textiles
Show Answer
Correct Answer: B [Lack of skilled technicians and managers]
Notes:
Indian cotton industry lagged due to absence of skilled technicians and managers, and lack of industrial revolution, unlike England, hindering technological advancement and efficient management in the textile sector during the British rule.
14. Consider the Climatic graph given below
The above climatic graph relates to (UPSC Prelims 1993)
[A] North-western region of India
[B] Southern region of India
[C] Mid-central region of India
[D] North-eastern region of India
Show Answer
Correct Answer: C [Mid-central region of India]
Notes:
Most of central India and much of North India are subject to a humid subtropical climate. Though they experience hot summers, temperatures during the coldest months may fall as low as 0 °C (32 °F). Due to ample monsoon rains, India has only one subtype of this climate under the Köppen system.
15. Which of the following type of economy has purely private ownership?
[A] Socialist economy
[B] Capitalist economy
[C] Mixed economy
[D] Traditional economy
Show Answer
Correct Answer: B [Capitalist economy]
Notes:
In a Capitalist economic system, the factors of production are owned by private companies and only private ownership exists.
16. Which type of unemployment is mostly seen in the Primary sector?
[A] Structural unemployment
[B] Disguised unemployment
[C] Cyclical unemployment
[D] Frictional unemployment
Show Answer
Correct Answer: B [Disguised unemployment]
Notes:
People working in the Primary sector remain unemployed most of the time in a year. This sector has more workers than required. This type of unemployment is known as disguised unemployment.
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. In which years were annual plans first implemented in India?
[A] 1966 to 1969
[B] 1971 to 1975
[C] 1988 to 1991
[D] 1969 to 1972
Show Answer
Correct Answer: A [1966 to 1969]
Notes:
India introduced annual plans during the Plan Holiday period from 1966 to 1969. The government opted for three consecutive annual plans in 1966–67, 1967–68, and 1968–69 after the failure of the Third Five-Year Plan. The annual plans bridged the gap until the Fourth Five-Year Plan began in 1969.
19. Which Five-year plan was also known as “Gadgil Yojna”?
[A] Second
[B] Third
[C] Fourth
[D] Fifth
Show Answer
Correct Answer: B [Third]
Notes:
The third Five-year plan was made for the duration of 1961 to 1966. This plan is called ‘Gadgil Yojna’ also. The main target of this plan was to make the country economically independent.
20. Which among the following is correct for a Registered seed?
[A] Genetic identitiy is not maintained
[B] Purity of genes is considered
[C] A Violet color certificate is issued
[D] It is breeded only by public sector
Show Answer
Correct Answer: B [Purity of genes is considered]
Notes:
A registered seed shall be the progeny of foundation seed that is so handled as to maintain its genetic identity and purity according to standard specified for the particular crop being certified. A purple color certificate is issued.
