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. With reference to various types of Banking, what is “Mixed Banking”?
[A] when banks undertake the activities of commercial and investment banking together
[B] when banks undertake the activities of wholesale and retail banking together
[C] when banks undertake the activities of offline and online banking together
[D] when banks undertake the activities of commercial and cooperative banking together
Show Answer
Correct Answer: A [when banks undertake the activities of commercial and investment banking together]
Notes:Mixed Banking is the system in which banks undertake activities of commercial and investment banking together.
- These banks give short-term and long-term loans to industrial concerns.
- The banks appoint experts which give valuable advice on various financial issues and also help gauge the financial health of companies.
- Industries don’t have to run to different places for differential financial needs.
- They thus promote rapid industrialization.
- They may however pose a grave threat to liquidity of a bank and lead to bad debts.
12. Which institution currently owns National Housing Bank?
[A] RBI
[B] Ministry of Finance
[C] Government of India
[D] SEBI
Show Answer
Correct Answer: C [Government of India]
Notes:
The National Housing Bank was established in 1988 under the National Housing Bank Act, 1987. It was initially a subsidiary of the Reserve Bank of India. In March 2019, RBI transferred its entire stake to the Government of India. NHB operates under the Ministry of Finance. NHB’s head office is located in New Delhi.
13. The Financial Action Task Force (FATF) mainly combats which activity?
[A] Climate change financing
[B] Money laundering and terrorist financing
[C] Development aid management
[D] Quantum computing in finance
Show Answer
Correct Answer: B [Money laundering and terrorist financing]
Notes:
The Financial Action Task Force is an intergovernmental body established in 1989 at the G7 Summit in Paris. FATF sets international standards to prevent money laundering and terrorist financing. The organization developed 40 Recommendations as technical standards. It conducts mutual evaluations of members. FATF monitors risks and trends in global money laundering and terrorist financing.
14. Which mineral is India the largest producer and exporter of?
[A] Cotton
[B] Mica
[C] Tea
[D] Copper
Show Answer
Correct Answer: B [Mica]
Notes:
India accounts for about 60% of global mica production. Major mica mines are located in Andhra Pradesh, Rajasthan, and Jharkhand. India exported $38.2 million worth of mica in 2024, ranking second globally after China. Vast high-quality mica reserves contribute to India’s leading role in the mica market worldwide.
15. Who among the following was the first woman to head an Indian public sector bank?
[A] Shikha Sharma
[B] Chanda Kochar
[C] Arundhati Bhattacharya
[D] Ranjana Kumar
Show Answer
Correct Answer: D [Ranjana Kumar]
Notes:
Ranjana Kumar became the first woman to head an Indian public sector bank when she was appointed Chairman and Managing Director of Indian Bank. This made her a notable first in the history of public sector banking in India. Arundhati Bhattacharya is also a landmark figure, but she is known as the first woman Chairperson of State Bank of India, not the first woman to head any public sector bank. Hence, the correct answer is Ranjana Kumar.
16. On which of the following the economy of Brazil is mostly dependent? (UPSC Prelims 1984)
[A] Tea
[B] Coffee
[C] Tobacco
[D] Sugar
Show Answer
Correct Answer: B [Coffee]
Notes:
Coffee production in Brazil is responsible for about a third of all coffee, making Brazil by far the world’s largest producer. It is a position the country has held for the last 150 years. Coffee plantations, covering some 27,000 km2 are mainly located in the southeastern states of Minas Gerais, Sao Paulo and Parana where the environment and climate provide ideal growing conditions. So coffee is the main reason of Brazil’s economy.
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. What is a free good?
[A] Opportunity cost = Maximum
[B] Opportunity cost = Negative
[C] Opportunity cost = 0
[D] A good which is freely available to all
Show Answer
Correct Answer: C [Opportunity cost = 0]
Notes:
A free good is a good with zero opportunity cost. This means it can be consumed in as much quantity as needed without reducing its availability to others. For Example sunlight, ideas, music or air.
19. Which economist publicly opposed Keynes and supported private spending during a recession?
[A] Thomas Malthus
[B] Friedrich Hayek
[C] Arthur Pigou
[D] Gary Becker
Show Answer
Correct Answer: B [Friedrich Hayek]
Notes:
Friedrich Hayek might be considered the poster boy for the Austrian School of Economics. Influenced and mentored by Ludwig von Mises, a prominent figure in the Libertarian movement, Hayek was awarded the Nobel Prize for Economics in 1974. While working at the London School of Economics he publicly opposed Keynes and his theories of government spending as the solution to the Great Depression, arguing instead that private investment was the path to prosperity and development.
20. Which of the following is most directly affected by agricultural growth?
[A] Poverty eradication
[B] Inflation
[C] Employment
[D] Balance of Payments
Show Answer
Correct Answer: D [Balance of Payments]
Notes:
Agricultural growth can influence several macroeconomic indicators. Higher farm output raises rural incomes, creates seasonal and allied-sector employment, and can help moderate food inflation by improving supply. It also affects the balance of payments through agricultural exports, reduced food imports, and foreign-exchange earnings. Therefore, among the given options, balance of payments is also directly affected, making it a relevant indicator of agricultural growth.