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. With reference to the World Trade Organization, the principle of reciprocity within WTO framework envisages?
[A] Lowering of trade barriers by a State to be matched in return.
[B] Creation of trade barriers on uniform basis
[C] Protection of intellectual property rights.
[D] Enhanced role for State controls on trade
Show Answer
Correct Answer: A [ Lowering of trade barriers by a State to be matched in return. ]
Notes:
The principle of reciprocity in the WTO framework means that when one member lowers trade barriers, other members are expected to do the same in return. This mutual concession promotes fair trade practices and encourages countries to engage in negotiations. Reciprocity is fundamental to the WTO’s goal of reducing trade barriers globally, fostering a more open and equitable trading system.
12. A tool used by a central bank of a country as its monetary policy to influence public with their own forecasts, market expectations of future levels of interest rates is called _?
[A] Forward guidance
[B] Derivative
[C] Futures contract
[D] Accrual Accounting
Show Answer
Correct Answer: A [ Forward guidance ]
Notes:
Forward guidance can be defined as a promise or future declaration of monetary policy by the central bank of the country. The bank forecasts its own market speculations and its own future monetary policies. This is done to influence the financial decisions of households, businesses and investors by letting them know what to expect from interest rates.
13. Which state has been placed at top spot by World Bank for ease of doing business in India?
[A] Gujarat
[B] Andhra Pradesh
[C] Maharashtra
[D] Tamil Nadu
Show Answer
Correct Answer: A [ Gujarat ]
Notes:
Gujarat ranked first among Indian states in ease of doing business rankings by World Bank. Andhra Pradesh ranked second.
14. Consider the following statements about Global Hunger Index (GHI):
- The report is published annually by the World Health Organization (WHO)
- As per the report, child stunting is the major reason behind India’s poor rank in GHI report
Which of the above statements is/are correct?
[A] 1 Only
[B] 2 Only
[C] Both 1 & 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: B [ 2 Only ]
Notes:
First statement is incorrect because the report is published annually by the International Food Policy Research Institute (IFPRI). The GHI is calculated by taking into account four key parameters: shares of undernourished population, wasted and stunted children aged fewer than 5, and infant mortality rate of the same age group. As per the report, child stunting in India is the major reason behind India’s worse ranking in the report.
15. On which of the following the definition of a small-scale industry is based?
[A] The market outreach of a unit
[B] The size of the sales of a unit
[C] The fact whether the products manufactured fall in a list drawn up by the Ministry of Industry
[D] The value of the plant and machinery investment in a unit
Show Answer
Correct Answer: D [The value of the plant and machinery investment in a unit]
Notes:
The definition of a small-scale industry is based on the value of the plant and machinery investment in a unit. Small scale industries (SSI) are those industries in which manufacturing, providing services, productions are done on a small scale or micro scale. These industries do a one-time investment in machinery, plants, and industries which could be on an ownership basis, hire purchase or lease basis.
16. Which was the largest part of non-plan expenditure in 1991-92?
[A] Subsidies on fertilizer
[B] Compensation to banks for loan waiving
[C] Interest payment
[D] Compensation for PSU losses
Show Answer
Correct Answer: C [Interest payment]
Notes:
In 1991-92, interest payments were the largest non-plan expenditure, estimated at Rs. 27,450 crores, surpassing other items like subsidies and compensations. This reflected the high fiscal burden due to accumulated government debt and was a key reason for economic reforms initiated that year.
17. Who is the author “The Theory of Economic Growth”?
[A] Gary Becker
[B] Mark Skousen
[C] Israel Kirzner
[D] W Arthur Lewis
Show Answer
Correct Answer: D [W Arthur Lewis]
Notes:
Sir William Arthur Lewis (23 January 1915 – 15 June 1991) was an economist well known for his contributions in the field of economic development. In 1979 he was awarded the Nobel Memorial Prize in Economic Science . He had dual Saint Lucian and British citizenships. Lewis published The Theory of Economic Growth in 1955 in which he sought to “provide an appropriate framework for studying economic development,” driven by a combination of “curiosity and of practical need.”
18. 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.
19. In which type of economy is government interference is limited?
[A] Socialist economy
[B] Market Economy
[C] Mixed Economy
[D] None of the above
Show Answer
Correct Answer: B [Market Economy]
Notes:
Market economy or capitalist economy works on the laissez-faire principle where there is limited gov and market forces of demand and supply plays a key role in its functioning.
20. Who gives approval for the usage of GM crops for cultivation?
[A] Ministry of Environment,forst and climate change
[B] Ministry of Agriculture
[C] Indian council for agriculture and research
[D] None of the above
Show Answer
Correct Answer: A [Ministry of Environment,forst and climate change]
Notes:
Ministry of Environment, forest and climate change gives approval for the usage of GM crops in cultivation. They do the assessment and check impact of GM crops on nature and give permissions.
