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. Who can sponsor Infrastructure Debt Funds (IDFs) in India under the RBI framework?
[A] SEBI
[B] NBFCs
[C] Cooperative societies
[D] No sponsor is required
Show Answer
Correct Answer: D [No sponsor is required]
Notes:
The Reserve Bank of India revised the framework for IDF-NBFCs on 18 August 2023 and withdrew the requirement of a sponsor. Under the present rules, an IDF-NBFC does not need to be sponsored by a bank or any other entity. This change was made to simplify regulation and allow IDF-NBFCs greater flexibility in financing infrastructure projects. Therefore, the correct answer is that no sponsor is required.
12. Which of the following clearly define mixed economy?
[A] Co-existence of private and public sectors
[B] Co-existence of small and large scale industries
[C] Industries completely owned by the Government
[D] Control of means of production by the Government
Show Answer
Correct Answer: A [Co-existence of private and public sectors]
Notes:
A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.
13. What was the prime concern of the Uruguay Round negotiations? (UPSC Prelims 1990)
[A] The debt burden of developing countries.
[B] Restrictions on flexible exchange rate systems.
[C] Restrictions on fishing rights on the high seas.
[D] Barriers to market access, domestic support, and export subsidies in agriculture.
Show Answer
Correct Answer: D [Barriers to market access, domestic support, and export subsidies in agriculture.]
Notes:
The Uruguay Round of negotiations ran from 1986 to 1994 under GATT. Its Agreement on Agriculture targeted market access, domestic support, and export subsidies as three core areas for agricultural reform. The round resulted in the Uruguay Round Agreement on Agriculture (URAA), which mandated reductions in these barriers. The Agreement was signed in Marrakesh in April 1994, leading to the establishment of the WTO in 1995.
14. What is the name given to the unemployment which occurs when workers move from one job to another job? (UPSC Prelims 1992)
[A] Seasonal unemployment
[B] Frictional unemployment
[C] Technological unemployment
[D] Cyclical unemployment
Show Answer
Correct Answer: B [Frictional unemployment]
Notes:
Frictional unemployment is a type of unemployment. It is sometimes called search unemployment and can be based on the circumstances of the individual. It is time spent between jobs when a worker is searching for a job or transitioning from one job to another.
15. What is the MSMEs’ share in India’s total manufacturing sector output? (UPSC Prelims 1992)
[A] 48.58%
[B] 35.4%
[C] 31.1%
[D] 24.63%
Show Answer
Correct Answer: B [35.4%]
Notes:
As per data from Union Budget 2026-27 and Ministry notifications, Micro, Small and Medium Enterprises account for about 35.4% of total manufacturing sector output in India. There are 7.47 crore MSME units in India. MSMEs also contribute 48.58% to exports and 31.1% to GDP. Earlier, MSMEs’ share in output was 40% in 1998-99.
16. Which among the following best describes scarcity in economics?
[A] Low demand for a good
[B] High demand and less supply of a good
[C] Low demand as people do not want to consume it
[D] Resources are limited relative to unlimited wants
Show Answer
Correct Answer: D [Resources are limited relative to unlimited wants]
Notes:
Scarcity in economics means that resources are limited, while human wants are unlimited. It is not the same as low demand or a temporary shortage. Because of scarcity, people and economies must make choices about how to allocate scarce resources among competing uses.
17. Who among the following receives subsidies from the government?
[A] Sellers
[B] Buyers
[C] Manufacturers
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Subsidy a negative tax when the government gives money to reduce the price. A seller receives a subsidy to reduce the price for consumers. A manufacturer receives a subsidy for inputs incurred by them. A buyer sometimes receives a direct subsidy on important essentials like gas.
18. Who wrote “The Theory of Interest as Determined by Impatience to Spend Income and Opportunity to Invest It”?
[A] Alfred Marshall
[B] Milton Friedman
[C] J S Mill
[D] Irving Fisher
Show Answer
Correct Answer: D [Irving Fisher]
Notes:
Irving Fisher, a leading American neoclassical economist, published “The Theory of Interest as Determined by Impatience to Spend Income and Opportunity to Invest It” in 1930. His pioneering work analyzed interest rates, relating them to savings impatience and investment opportunities, influencing modern interest theory and macroeconomics.
19. Which is not an advantage of the organised sector?
[A] Job security
[B] Fixed working hours
[C] Absence of trade unions
[D] Better working conditions
Show Answer
Correct Answer: C [Absence of trade unions]
Notes:
Trade unions are a key feature of the organised sector, providing collective bargaining, better wages, and improved benefits. Their absence would be a disadvantage, not an advantage. Organised sector workers also enjoy fixed working hours, job security, and safer working conditions.
20. In which year were ₹10,000 notes demonetized in India?
[A] 1975
[B] 2016
[C] 2015
[D] 1978
Show Answer
Correct Answer: D [1978]
Notes:
In 1978, under Prime Minister Morarji Desai, ₹1,000, ₹5,000, and ₹10,000 notes were demonetized to combat black money. The Reserve Bank of India executed this demonetization, removing high-value currency to curb illegal wealth and unaccounted cash circulation in the Indian economy.
