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. If a company has “Trade Receivables”, this implies that __:
[A] It has made a sale but yet to collect payments
[B] It has received payments but yet to make a delivery
[C] It has received an order but yet to make delivery
[D] None of the above is a correct definition
Show Answer
Correct Answer: A [ It has made a sale but yet to collect payments ]
Notes:
If a company has receivables, this means it has made a sale but has yet to collect the money from the purchaser.
12. The terms IBAN, BBAN, SEPA and SWIFT are associated with:
[A] International Banking
[B] Disaster Management
[C] Nuclear Waste Management
[D] International Maritime Boundaries
Show Answer
Correct Answer: A [International Banking]
Notes:
IBAN, BBAN, SEPA and SWIFT are all terms used in international banking and payment systems. SWIFT is the global messaging network used by banks, SEPA refers to the Single Euro Payments Area, and IBAN is the International Bank Account Number used for identifying bank accounts in cross-border payments. BBAN stands for Basic Bank Account Number and forms the country-specific part of the account identifier. These terms are widely used in international fund transfers.
13. RBI’s intervention to influence the exchange rate is known as what in India?
[A] Dirty Floats
[B] Managed Floats
[C] Fixed Floats
[D] Market Stabilization Floats
Show Answer
Correct Answer: B [Managed Floats]
Notes:
India has used a managed floating exchange rate regime since 1993. The Reserve Bank of India intervenes in the foreign exchange market to reduce excessive volatility. The exchange rate is mainly market-determined but subject to RBI intervention. The International Monetary Fund describes India’s regime as a managed float. RBI does not follow a fully fixed or fully floating rate policy.
14. Which of the following is not included in the calculation of national income?
[A] Value of annual goods production
[B] Value of annual services
[C] Value of old goods sold
[D] Value of new technology
Show Answer
Correct Answer: C [Value of old goods sold]
Notes:
National income measures the value of current production of final goods and services in a given period. The resale of old goods is not counted because it does not represent current production. Annual goods production and services are included, while “new technology” is too vague and not the standard exclusion tested here.
15. What happens to corporate bond with a fixed interest rate, if interest rates in nation increase?
[A] decrease in value
[B] Be returned to corporation
[C] remain unchanged
[D] increase in value
Show Answer
Correct Answer: A [decrease in value]
Notes:
If interest rates in nation increase, a corporate bond with a fixed interest rate will decrease in value.
16. Which Mumbai market is famous for antiques and vintage items? (UPSC Prelims 1983)
[A] Chor Bazaar
[B] Ima Keithel
[C] Laad Bazaar
[D] Attar Bazaar
Show Answer
Correct Answer: A [Chor Bazaar]
Notes:
Chor Bazaar, located in South Mumbai, is over 150 years old and renowned for antiques, vintage collectibles, old clocks, Victorian furniture, and rare items. It is one of India’s most historic secondhand markets, attracting antique enthusiasts and tourists alike.
17. Which of the following statements is not correct for economically underdeveloped countries? (UPSC Prelims 1987)
[A] Involvement of a very little proportion of labour in primary occupations
[B] Lower percentage of literacy
[C] Mass unemployment
[D] High birth rate
Show Answer
Correct Answer: A [Involvement of a very little proportion of labour in primary occupations]
Notes:
Primary jobs involve getting raw materials from the natural environment e.g. Mining, farming and fishing. There are a lot of people who are engaged in primary occupations in an economically underdeveloped country.
18. Which of the following define Deficit Financing? (UPSC Prelims 1987)
[A] Difference of total expenditure and income by revenue from all sources
[B] Government spends in excess of revenues so that a budget deficit is incurred which is financed by the borrowings
[C] Difference in borrowing and external and internal resources
[D] Capital expenditure on items of public construction, public enterprises and public borrowings
Show Answer
Correct Answer: B [Government spends in excess of revenues so that a budget deficit is incurred which is financed by the borrowings]
Notes:
Deficit financing is the budgetary situation where expenditure is higher than the revenue. It is a practice adopted for financing the excess expenditure with outside resources. The expenditure revenue gap is financed by either printing of currency or through borrowing.
19. 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.
20. What is subtracted from Gross Value Added to get Net Value Added?
[A] Depreciation
[B] Value added
[C] Production flow
[D] Investment
Show Answer
Correct Answer: A [Depreciation]
Notes:
Net Value Added is obtained by subtracting depreciation from Gross Value Added. Depreciation represents the wear and tear or consumption of fixed capital during the production process. It is a key measure in national income accounting.
