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 does structural change in exports mean? (UPSC Prelims 1989)
[A] Shifts in export composition over time
[B] Increase in exports and imports together
[C] Growth in imports over production
[D] Change in domestic consumption of imports
Show Answer
Correct Answer: A [Shifts in export composition over time]
Notes:
Structural change in exports refers to long-term changes in the types and categories of goods and services a country exports. It involves shifts in the relative share of sectors such as agriculture, manufacturing, and services in total exports. Such changes occur due to productivity growth, varying international prices, and evolving global demand.
12. Which of the following is included in Gross National Product (GNP)?
[A] Income earned by residents abroad
[B] Imports of goods and services
[C] Depreciation of capital goods
[D] Government budget deficit
Show Answer
Correct Answer: A [Income earned by residents abroad]
Notes:
GNP measures the value of final goods and services produced by a country’s residents, wherever they are located. It includes net income earned from abroad by residents. Imports are not part of GNP, and depreciation or fiscal deficit are not components of GNP calculation.
13. 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.
14. Which of the following activities comes under the primary sector?
- Fishing
- Pisciculture
- Apiculture
- Manufacturing
- Internet of things
Select the correct option from the codes given below:
[A] 1 and 2 only
[B] 1, 4 and 5 only
[C] 4 and 5 only
[D] 1, 2 and 3 only
Show Answer
Correct Answer: D [1, 2 and 3 only]
Notes:
Primary sector activities involve direct extraction or utilization of natural resources. Fishing, pisciculture (fish farming), and apiculture (beekeeping) are all primary sector activities. Manufacturing and Internet of Things (IoT) are secondary and tertiary sector activities, respectively, and do not fall under the primary sector.
15. How much FDI is permitted in e-commerce in India?
[A] 75% in marketplace; 0% in inventory-based
[B] 100% in B2B and marketplace; 0% inventory-based
[C] 100% in all e-commerce models
[D] 51% in marketplace; 100% in B2B
Show Answer
Correct Answer: B [100% in B2B and marketplace; 0% inventory-based]
Notes:
India allows 100% FDI under the automatic route in B2B e-commerce and marketplace model since Press Note 3 (2016). FDI is not permitted in the inventory-based model. The marketplace model connects buyers and sellers without holding inventory. The restrictions were reiterated in Press Note 2 (2018). The Department for Promotion of Industry and Internal Trade regulates these FDI norms.
16. Which is the most commonly used in India for preparation of toilet soap?
[A] Mustard seed
[B] Sunflower seed
[C] Coconut oil
[D] Groundnut oil
Show Answer
Correct Answer: C [Coconut oil]
Notes:
Coconut oil is the oil that is used for the preparation of soaps. The fats and oils are the most commonly used in soap preparation.
17. Which of these is a non-edible oilseed?
[A] Sesame
[B] Sunflower
[C] Linseed
[D] Groundnut
Show Answer
Correct Answer: C [Linseed]
Notes:
Linseed, also called flaxseed, is primarily used for industrial purposes like making linoleum, varnishes, and paints. The oil extracted from linseed is not commonly used for edible purposes in India. Sesame, sunflower, and groundnut oils are widely consumed as cooking oils. India is among the top producers of linseed globally.
18. Where is the Central Bird Research Institute located?
[A] Izzatnagar
[B] Mathura
[C] Visakhapatanam
[D] Hyderabad
Show Answer
Correct Answer: A [Izzatnagar]
Notes:
The Central Avian Research Institute of India is a research institute located at Izzatnagar near Bareilly, Uttar Pradesh state, India. It studies poultry science, including avian genetics, breeding, nutrition and feed technology, and avian physiology and reproduction, for the betterment of the Indian poultry industry.
19. Which Madhya Pradesh district has the largest area under forest cover?
[A] Indore
[B] Bhopal
[C] Balaghat
[D] Shahdol
Show Answer
Correct Answer: C [Balaghat]
Notes:
Balaghat district in Madhya Pradesh has the largest forest area in the state. According to the India State of Forest Report 2021, Balaghat district has a forest cover of more than 4,000 square kilometers. Balaghat is known for dense forests and significant teak plantations. The district is a major contributor to Madhya Pradesh’s overall forest resources and biodiversity zones.
20. What is the textile industry’s contribution to India’s GDP as of 2026?
[A] 1.5%
[B] 2.3%
[C] 4.5%
[D] 5.8%
Show Answer
Correct Answer: B [2.3%]
Notes:
The textile and apparel sector contributes about 2.3% to India’s GDP in 2026. The sector accounts for around 13% of industrial production. It represents approximately 8.63% of India’s total exports. The textile industry provides employment to over 45 million people directly. The estimated market size of the Indian textile industry is USD 179 billion. The sector is the second-largest employer after agriculture.
