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 term “Open Unemployment” is used when:
[A] people are not willing to work
[B] people are willing but not get work
[C] people leave their jobs in search of better ones
[D] people get the jobs but no regular payments
Show Answer
Correct Answer: B [ people are willing but not get work ]
Notes:
Open unemployment is a condition in which people have no work to do. They are able to work and are also willing to work but there is no work for them. They are found partly in villages, but very largely in cities. Most of them come from villages in search of jobs, many originate in cities themselves. Such employment can be seen and counted in terms of the number of such persons. Hence it is called open unemployment.
12. What does the greenshoe option allow underwriters to do during an IPO?
[A] Sell up to 15% additional shares beyond the original offering
[B] Record investor demands and change IPO pricing
[C] Purchase shares back from investors at a discount
[D] None of the above
Show Answer
Correct Answer: A [Sell up to 15% additional shares beyond the original offering]
Notes:
The greenshoe option is an IPO underwriting clause first used by Green Shoe Manufacturing Company. It allows underwriters to sell up to 15% extra shares above the original IPO amount to support share price stability and meet demand. The Securities and Exchange Commission permits this clause. The option helps underwriters stabilize prices by covering over-allotted shares in the aftermarket.
13. The payment and settlement system in India is managed by_?
[A] SEBI
[B] RBI
[C] National Payments Corporation of India
[D] Ministry of Finance
Show Answer
Correct Answer: B [ RBI ]
Notes:
RBI manages the payment and settlement system in India.
14. Which of the following industries is considered as “Mother of all industries”?
[A] Textile industry
[B] Coal industry
[C] Iron and steel industry
[D] Jute industry
Show Answer
Correct Answer: C [Iron and steel industry]
Notes:
The finished products of Iron and steel industries are used as raw material for other industries such as automobile and manufacturing industries. Iron and steel industry is called the mother of all industries because they need steel and iron for production, for machinery and for infrastructure.
15. Which among the following is an example of micro-economic variable?
[A] National Income
[B] Consumer’s Equilibrium
[C] Aggregate Supply
[D] Employment
Show Answer
Correct Answer: B [Consumer’s Equilibrium]
Notes:
Microeconomic variables are those patterns or elements that can be used to describe the behavior of a person or an individual economic unit, like a business. Eg. Consumer’s Equilibrium.
16. Who among the following is a banking corresponding agent?
[A] An authorized representative of bank who offer banking services in unbanked areas
[B] Any person who offer banking services in unbanked areas
[C] An authorized representative of bank who makes profits for banks
[D] None of the above
Show Answer
Correct Answer: A [An authorized representative of bank who offer banking services in unbanked areas]
Notes:
Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. BCs enable a bank to provide its limited range of banking services at low cost.
17. Which of the following are money markets instruments?
[A] A 14-day repurchase agreement of Treasury 8% 2007
[B] A treasury bill with 7 days to maturity
[C] A 3-month certificate of deposit
[D] All of the above
Show Answer
Correct Answer: D [ All of the above ]
Notes:
The short-term debts and securities sold on the money markets—which are known as money market instruments—have maturities ranging from one day to more.
18. Which of the following is a balanced fertilizer for plants?
[A] Urea
[B] Ammonia sulphate
[C] Nitrates
[D] Compost
Show Answer
Correct Answer: D [Compost]
Notes:
Fertilizers are used by farmers for the better crop growth. Normally compost is considered as the balanced fertilizer as it does not harm plants and increase the productivity. But considering artificial fertilizers a balanced fertilizer is chosen which have balanced amount of NPK. Generally, nitrogen is used by plants to produce green growth and potassium for flower and fruit development. A balanced fertilizer such as 10-10-10 of NPK is a good choice for vegetables and other high-nutrient plants.
19. Which economist proved the impossibility theorem?
[A] Kenneth Rogoff
[B] Kenneth Arrow
[C] Gary Becker
[D] Mark Skousen
Show Answer
Correct Answer: B [Kenneth Arrow]
Notes:
Kenneth Arrow proved the impossibility theorem, which shows the limitations underlying predicting people’s preferences between options. His groundbreaking work in these fields as well as broader topics in general equilibrium theory and welfare theory led to him acquiring the Noble Prize in 1972.
20. Which of the following are the reasons for India to shift from the primary sector to the tertiary sector and not the secondary sector?
[A] Restriction of FDI
[B] Availability of skilled labour
[C] Well developed and educated human resource
[D] Liberal labour laws
Show Answer
Correct Answer: C [Well developed and educated human resource]
Notes:
Well educated and immense human resources, Fluency in English and availability of cheap labour are other reasons for rapid growth of service sector in the country. On the other hand low growth in Secondary sector can be attributed to various reasons like rigid laws, restriction of FDI etc.
