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 the chief characteristic of the primary industry of the developed countries?
[A] Larger farm size and increasing corporate ownership of farms
[B] Larger farm size and more government ownership of farms
[C] Smaller farm size and a diversity of crops on each farm
[D] Smaller farm size and fewer family-owned farms
Show Answer
Correct Answer: A [Larger farm size and increasing corporate ownership of farms]
Notes:
Consider agriculture in the developed countries such as United States and Canada. There, the small family farms are not able to earn a profit and are being replaced by large corporate farms.
12. Which of the following is the least preferred option by government for deficit financing?
[A] Printing of currency notes
[B] Loans from World bank and IMF
[C] Disinvestment of government holdings
[D] Open sale of government securities and bonds in market
Show Answer
Correct Answer: A [ Printing of currency notes ]
Notes:
Printing of currency creates a situation where too much money chases few goods and thus leads to condition of inflation. So; it is the last preferred option for government.
13. Which term represents government’s total borrowing needs from all sources?
[A] Revenue Deficit
[B] Fiscal Deficit
[C] Primary Deficit
[D] Effective Revenue Deficit
Show Answer
Correct Answer: B [Fiscal Deficit]
Notes:
Fiscal deficit is calculated as total expenditure minus the sum of revenue receipts and non-debt capital receipts. Fiscal deficit data is published annually in the Union Budget. It shows the full amount the government must borrow in a financial year. The government’s fiscal deficit for 2023-24 was targeted at 5.9% of GDP.
14. Who published the Global Competitiveness Report?
[A] World Bank
[B] International Monetary Fund
[C] World Economic Forum
[D] World Trade Organization
Show Answer
Correct Answer: C [World Economic Forum]
Notes:
The Global Competitiveness Report was published by the World Economic Forum. The series began in 1979, and the report evolved over time to present the Global Competitiveness Index and country rankings. Its 2020 edition was issued as a special edition focused on recovery and transformation, and it remained part of the World Economic Forum’s publications. Hence, the correct answer is World Economic Forum.
15. Which tool involves central banks signaling future interest rate intentions?
[A] Forward guidance
[B] Quantitative easing
[C] Open market operations
[D] Reserve requirements
Show Answer
Correct Answer: A [Forward guidance]
Notes:
Forward guidance was widely adopted after the 2008 global financial crisis. The Federal Reserve began explicit forward guidance in 2011. The European Central Bank used this tool in 2013. The Bank of Japan started using forward guidance in 2013. Forward guidance aims to influence market expectations about future monetary policy. It became prominent when policy rates approached zero, limiting conventional monetary tools.
16. Consider the following statement about India’s child welfare programme:
The scheme now subsumed under Mission Saksham Anganwadi & Poshan 2.0 focuses on improving the nutritional and health status of children in the age group of _?
[A] 0-6 years
[B] 0-10 years
[C] 0-14 years
[D] 6-14 years
Show Answer
Correct Answer: A [0-6 years]
Notes:
Mission Saksham Anganwadi & Poshan 2.0 continues the Anganwadi-based nutrition and early childhood care framework for young children. Its services are meant for children from birth to 6 years of age, along with pregnant women and lactating mothers. The child-focused component covers growth monitoring, supplementary nutrition, preschool activities, health referral and related support, so the correct age group remains 0-6 years.
17. What do we call the funds that the banks keep with RBI as a portion of their Net Demand and Time Liabilities?
[A] Statutory Liquidity Ratio
[B] Cash Reserve Ratio
[C] Bank Rate
[D] Reverse Repo Rate
Show Answer
Correct Answer: B [Cash Reserve Ratio]
Notes:
The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve bank of India as a portion of their Net Demand and Time Liabilities (NDTL).
18. Which economist is associated with Arrow’s impossibility theorem?
[A] Kenneth Rogoff
[B] Kenneth Arrow
[C] Gary Becker
[D] Mark Skousen
Show Answer
Correct Answer: B [Kenneth Arrow]
Notes:
Kenneth Arrow is associated with Arrow’s impossibility theorem, which states that no voting system can convert individual preference rankings into a single collective ranking while satisfying all of the specified fairness conditions at once. Arrow shared the 1972 Nobel Prize in Economic Sciences for his contributions to general equilibrium theory and welfare theory.
19. Which of the following is not an example of the secondary sector?
[A] Artisan production
[B] Textile Mills
[C] Food production
[D] Nurse
Show Answer
Correct Answer: D [Nurse]
Notes:
The secondary sector includes industries where finished products are made from natural materials produced in the primary sector. Industrial production, cotton fabric, sugar cane production artisan production, Mills producing textiles, Factories producing steel, chemicals, plastic, car activities come under this sector.
20. During which five-year plan the Private sector was given priority over the public sector?
[A] 5th
[B] 7th
[C] 6th
[D] 8th
Show Answer
Correct Answer: B [7th]
Notes:
Seventh Five Year Plan from 1985 to 1990 had the objective to establish a self-sufficient economy, opportunities for productive employment. For the first time, the private sector got priority over the public sector. Socialist India started moving away from it.
