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. What is the short name of India’s top authority for Indirect Taxes?
[A] CBDT
[B] CBEC
[C] CBIT
[D] CBIC
Show Answer
Correct Answer: D [CBIC]
Notes:
The Central Board of Indirect Taxes and Customs (CBIC) was renamed in 2018 from CBEC. CBIC is a statutory body under the Department of Revenue, Ministry of Finance. It is responsible for administration of GST, customs, excise and service tax in India. The board was originally established in 1964 by the Central Boards of Revenue Act, 1963.
12. In context with the share markets in India, public issue refers to which of the following?
[A] first time issuance of shares of a company via stock exchange
[B] first time issuance of shares of a public company via stock exchange
[C] allotment of shares to 50 or more investors
[D] allotment of shares to public by 50% or more fraction of the total equity
Show Answer
Correct Answer: C [ allotment of shares to 50 or more investors ]
Notes:
The primary market issuance is done either through public issues or private placement. Under Companies Act, 1956, an issue is referred as public if it results in allotment of securities to 50 investors or more. However, when the issuer makes an issue of securities to a select group of persons not exceeding 49 and which is neither a rights issue nor a public issue it is called a private placement.
13. Which Ministry set “Haat to Hypermarket” as the Rural Business Hubs’ objective?
[A] Ministry of Panchayati Raj
[B] Ministry of Corporate Affairs
[C] Ministry of Skill Development and Entrepreneurship
[D] Ministry of Rural Development
Show Answer
Correct Answer: A [Ministry of Panchayati Raj]
Notes:
The Ministry of Panchayati Raj launched the Rural Business Hubs (RBH) initiative in 2007. The “Haat to Hypermarket” objective aims to connect rural producers to wider markets. The ministry focuses on rural empowerment through economic partnerships and market linkages for local artisans. RBH projects involve village industries, micro-enterprises, and cooperatives under the ministry’s schemes.
14. Which of the following is called GDP Deflator?
[A] Ratio of nominal to real GNP
[B] Ratio of nominal to real CPI
[C] Ratio of real to nominal GNP
[D] Ratio of nominal to real GDP
Show Answer
Correct Answer: D [Ratio of nominal to real GDP]
Notes:
The GDP deflator is a measure of price inflation. It is calculated by dividing Nominal GDP by Real GDP and then multiplying by 100. Nominal GDP is the market value of goods and services produced in an economy, unadjusted for inflation
15. When does a monopoly by a specific business entity occur in the market?
[A] When there are numerous buyers and sellers
[B] When homogeneous products flood the market
[C] When a distinctive product is exclusively sold by a single seller
[D] When firms are merely price takers
Show Answer
Correct Answer: C [When a distinctive product is exclusively sold by a single seller]
Notes:
A monopoly exists when a specific entity is the sole supplier of a particular commodity. This market condition can only occur if the unique product is exclusively sold by one seller, eliminating any form of direct competition. It is regulated by certain laws to prevent marketplace inefficiency. However, a monopoly can lead to innovation as other companies strive to create an alternative or similar product.
16. Which economist made a lasting impact on Japan following the 1868 Meiji revolution?
[A] Francis Fukuyama
[B] Fukuzawa Yukichi
[C] Takero Doi
[D] None of the above
Show Answer
Correct Answer: B [Fukuzawa Yukichi]
Notes:
FUKUZAWA YUKICHI (1834-1901) was an author, entrepreneur, and political theorist. Yukichi’s ideas made a lasting impact on Japan following the 1868 Meiji Revolution, which saw the restoration of imperial rule in Japan and set in train its economic modernization.
17. Who determines prices in a capitalist economy?
[A] Government
[B] Market forces
[C] Big corporates
[D] None of the above
Show Answer
Correct Answer: B [Market forces]
Notes:
In a capitalist economy, prices are set by demand and supply, collectively known as market forces. Government intervention is minimal. Prices fluctuate based on consumer preference and availability of goods, ensuring efficient allocation of resources within the economy.
18. What is referred to as the “invisible hand” in a market economy?
[A] Trade
[B] Money
[C] Demand and supply
[D] Competition
Show Answer
Correct Answer: D [Competition]
Notes:
Adam Smith’s “invisible hand” describes competition, which guides market resources efficiently and benefits society even if individuals act in self-interest. This concept is foundational in classical economic theory and emphasizes the self-regulating nature of competitive markets.
19. During which five-year plan the Private sector was given priority over the public sector?
[A] 5th
[B] 7th
[C] 6th
[D] 8th
Show Answer
Correct Answer: B [7th]
Notes:
Seventh Five Year Plan from 1985 to 1990 had the objective to establish a self-sufficient economy, opportunities for productive employment. For the first time, the private sector got priority over the public sector. Socialist India started moving away from it.
20. On which date, NITI Aayog was established?
[A] 1 January 2015
[B] 25 January 2016
[C] 14 May 2014
[D] 1 July 2015
Show Answer
Correct Answer: A [1 January 2015]
Notes:
NITI Aayog established on 1 January 2015. Its full form is a National Institution for Transforming India. It replaced the Planning commission.
