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. The basic WTO principle with reference to trade barriers is that:
[A] Trade barriers can be imposed by any country that believes it will benefit from such trade barriers
[B] Trade Barriers should be lowered equally and without discrimination for all member countries
[C] Trade Barriers can be imposed if a majority of the members of the WTO agree
[D] Trade Barriers should be the same in all member countries so that the result is equivalent to free trade
Show Answer
Correct Answer: B [ Trade Barriers should be lowered equally and without discrimination for all member countries ]
Notes:
The correct answer is that trade barriers should be lowered equally and without discrimination for all member countries. This principle is rooted in the Most-Favored-Nation (MFN) clause of the World Trade Organization (WTO), which mandates that any favorable trading terms offered to one member must be extended to all members. This aims to promote fair competition and prevent trade discrimination, fostering a more open and equitable global trading system. The WTO, established in 1995, has 164 member countries, emphasizing the importance of non-discriminatory trade practices.
12. What does Revenue Neutral Rate (RNR) mean?
[A] A policy where revenue receipts equal revenue expenditures
[B] A tax rate to ensure income tax equity
[C] A property tax rate generating same revenue as previous year
[D] A tax policy increasing revenue without hearings
Show Answer
Correct Answer: C [A property tax rate generating same revenue as previous year]
Notes:
The Revenue Neutral Rate is a property tax rate calculated so total tax revenue equals the previous year’s amount, based on current assessed property valuations. The formula is previous year’s tax revenue divided by current year’s assessed valuation, multiplied by 1,000. If property values increase, the RNR decreases to keep tax revenue flat.
13. Which Fundamental Right in the Indian Constitution prohibits trafficking, forced labour, and children working under 14 years of age?
[A] Right to Equality
[B] Right to Freedom
[C] Right against Exploitation
[D] Right to Freedom of Religion
Show Answer
Correct Answer: C [Right against Exploitation]
Notes:
The right against exploitation prohibits all forms of forced labour, child labour and trafficking of human beings. The Right against Exploitation enshrined in the Indian Constitution guarantees dignity of the individual.
14. Which approach involves managing crises to impact brand reputation?
[A] Public Relations Issues Management
[B] Brand Advertising Management
[C] Private Equity Issues Management
[D] None of the above
Show Answer
Correct Answer: A [Public Relations Issues Management]
Notes:
Public Relations Issues Management is a PR strategy that addresses emerging issues and crises. It guides company communication and action during critical situations. This approach maintains brand reputation and public trust by controlling information and providing timely responses during incidents. The process follows established crisis management frameworks used by organizations worldwide.
15. Why did famine intensity rise in India under British rule? (UPSC Prelims 1991)
[A] The failure of monsoons became frequent
[B] The drain of wealth from India was uncontrolled
[C] Poor distribution of food grains
[D] Discriminatory protection to food processing industries
Show Answer
Correct Answer: B [The drain of wealth from India was uncontrolled]
Notes:
The uncontrolled drain of wealth by the British depleted resources, worsening famines. From 1763–1856, over 40 major rebellions followed such crises. The Sanyasi Rebellion post-1770 Bengal famine exemplifies the link between exploitation and food crises during British rule.
16. What is Market equilibrium?
[A] Quantity demanded greater than quantity supplied
[B] Quantity demanded less than quantity supplied
[C] Quantity demanded equal to quantity supplied
[D] Quantity demanded is same as quantity produced
Show Answer
Correct Answer: C [Quantity demanded equal to quantity supplied]
Notes:
Market equilibrium is defined by equality between quantity demanded and quantity supplied in the market. The equilibrium price is the price of a good or service when the supply of it is equal to the demand for it in the market.
17. Which of the following is correct for economic efficiency?
[A] Increase in economic acitivty in an economy
[B] Use of resources to maximize the production of goods and services
[C] Distribution of economic resources in fair and equitable manner
[D] Maximum usage of resources for maximum production of goods
Show Answer
Correct Answer: B [Use of resources to maximize the production of goods and services]
Notes:
Economic Efficiency is the use of resources so as to maximize the production of goods and services. Resources are scarce and there are unlimited wants so economic efficiency is key in development.
18. Which is the first organic state in India?
[A] Kerala
[B] Sikkim
[C] Assam
[D] Arunachal Pradesh
Show Answer
Correct Answer: B [Sikkim]
Notes:
Sikkim was recognized as the country’s first organic state in 2018. Uttarakhand is the second organic sate in India.
19. Which country is the world’s largest importer of edible oil?
[A] China
[B] India
[C] USA
[D] Pakistan
Show Answer
Correct Answer: B [India]
Notes:
India is the world’s largest importer of edible oil. In 2025, India’s edible oil imports were valued at 21.8 billion, accounting for 18.9% of global imports. India imports about 16.7 million tonnes annually, with major suppliers being Indonesia and Malaysia for palm oil, and Argentina and Brazil for soybean oil. China is the second-largest importer, with 14.6 billion in imports.
20. Which state leads India in shrimp production?
[A] West Bengal
[B] Andhra Pradesh
[C] Tamil Nadu
[D] Kerala
Show Answer
Correct Answer: B [Andhra Pradesh]
Notes:
Andhra Pradesh accounted for nearly 78% of India’s total shrimp production in 2025. The state has a 974-kilometer coastline and extensive aquaculture infrastructure, including districts like East Godavari, Krishna, and Nellore. Major farmed species include Litopenaeus vannamei and scampi. State policy supports aquaculture expansion, with plans to increase the area under cultivation to one million acres by 2030.
