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 is India’s largest investor in the debt market?
[A] LIC of India
[B] ICICI Bank
[C] State Bank of India
[D] EPFO
Show Answer
Correct Answer: D [EPFO]
Notes:
EPFO, Employees’ Provident Fund Organisation, manages over Rs 28 lakh crore in assets as of 2023. EPFO allocates more than 89% of its portfolio to debt instruments. The organization invests in central and state government securities, State Development Loans, and corporate bonds. EPFO was established in 1952 under the Employees’ Provident Funds and Miscellaneous Provisions Act.
12. Which of the following is used by RBI for sterilization of the Capital Inflows?
[A] Base Rate System
[B] CRAR Obligations
[C] Open Market Operations
[D] Credit Authorization Scheme
Show Answer
Correct Answer: C [ Open Market Operations ]
Notes:
An open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks. The central bank can either buy or sell government bonds in the open market.
13. In which of the following market forms a firm does not exercise control over price?
[A] Monopoly
[B] Mixed Competition
[C] Perfect competition
[D] Oligopoly
Show Answer
Correct Answer: C [Perfect competition]
Notes:
In economics, specifically general equilibrium theory, a perfect market is defined by several idealizing conditions, collectively called perfect competition.
14. Which of the following is represented by ‘Lorenz Curve’?
[A] Inflation
[B] Income Distribution
[C] Employment
[D] Deflation
Show Answer
Correct Answer: B [Income Distribution]
Notes:
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution.
15. Which of the following is an alternative way of representing the production function?
[A] Average Product
[B] The Long Run
[C] Isoquant
[D] The Short Run
Show Answer
Correct Answer: C [Isoquant]
Notes:
An isoquant is a firm’s counterpart of the consumer’s indifference curve. An isoquant is a curve that shows all the combinations of inputs that yield the same level of output. ‘Iso’ means equal and ‘quant’ means quantity.
16. Which one of the following is not an instrument of selective credit control in India? (UPSC Prelims 1995)
[A] Regulation of consumer credit
[B] Rationing of credit
[C] Margin requirements
[D] Variable cost reserve ratios
Show Answer
Correct Answer: D [Variable cost reserve ratios]
Notes:
The variable reserve ratio device springs from the fact that the central bank, in its capacity as Bankers Bank, must hold a part of the cash reserves of commercial banks. The customary minimum cash reserve ratio is an important limitation on the lending capacity of banks.
17. Real National income increases in which of the following circumstances?
[A] When Prices of goods increases
[B] When saving of people increases
[C] When Inflation increases prices and taxes
[D] When the production of goods and services increases
Show Answer
Correct Answer: D [When the production of goods and services increases]
Notes:
As the calculation of national income is the total value of all goods and services in an economy the real increase happens when the output production increases. The rate change won’t affect because while calculating real national income we take into account the prices of base year. So even the inflation effect is also removed.
18. Who is the autor of the book “Utilitarianism”?
[A] Jermy bentham
[B] Immanuel Kant
[C] J S Mill
[D] David Ricardo
Show Answer
Correct Answer: C [J S Mill]
Notes:
JS mill’s book utilitarianism is a series of articles published in Frazer’s magazine. Mill’s aim in the book is to explain what utilitarianism is, to show why it is the best theory of ethics, and to defend it against a wide range of criticisms and misunderstandings.
19. Who among the following economists made a contribution to welfare economics?
[A] Abhijit Banerjee
[B] Amartya Sen
[C] Manmohan Singh
[D] Amit Mitra
Show Answer
Correct Answer: B [Amartya Sen]
Notes:
Amartya Sen has made contributions to welfare economics, social choice theory, economic and social justice, economic theories of famines, and indices of the measure of well-being of citizens of developing countries. His work on welfare economics got him Noble prize in economic in 1998.
20. Which factor is NOT a main reason India is a developing country in 2026?
[A] Rural population depends on agriculture
[B] Lack of rapid industrialization
[C] Scarcity of capital
[D] High per capita income
Show Answer
Correct Answer: D [High per capita income]
Notes:
India is still classified as developing due to low per capita income. Agriculture dependence, limited industrialization, and scarce capital are other reasons. Despite rapid growth, India’s per capita income remains well below high-income thresholds, keeping it in the developing country category per World Bank standards.
