MCQOPTIONS
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MCQOPTIONS
This section includes 157 Mcqs, each offering curated multiple-choice questions to sharpen your Indian Economy knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
When the RBI wants to inject liquidity int economy it may adopt the following : 1. Buy the government securities from the banks . 2. Enter into reverse Operations 3. Raises cash Reserve Ration 4 Reduce SLR. Select the correct answer using the codes given below : |
| A. | l only |
| B. | 1 and 4 only |
| C. | 1, 2 and 4 only |
| D. | 1, 2 , 3 and 4 |
| Answer» C. 1, 2 and 4 only | |
| 2. |
Which of the following can be the outcomes of very high inflation in the economy? (1) Reduction in economic growth (2) Increase in savings (3) Reduction in exports Select the correct answer using the codes below : |
| A. | l and 3 only |
| B. | 3 and 4 only |
| C. | 2 and 3 |
| D. | 1 and 4 only |
| Answer» E. | |
| 3. |
Consider the following statements in regard to Gross Domestic product (GDP) of India :(1) Between 1951 and 2000 the share of agriculture in GDP fell from around 56% to around 25%(2) Share the services sector in GDP was less than industrial sector between 1951 and 2000 Which of the statements given below is/are not correct? |
| A. | 1 only |
| B. | 2 only |
| C. | Both l and 2 |
| D. | Neither l nor 2 |
| Answer» E. | |
| 4. |
Which of the following are correct in regard to the austerity measures taken by a country going through adverse economy conditions: 1 These measures include a reduction in spending . 2 These measures include increasing in tax3 These measures include reduction in budget deficit. Select the correct answer using the codes given below : |
| A. | l and 2 only |
| B. | 1 and 3 only |
| C. | 2 and 3 only |
| D. | l, 2 and 3 |
| Answer» E. | |
| 5. |
Consider the following statements in regard to Headline inflation : (1) It provides an accurate picture of the inflation in the country. (2) It is affected by short term transitory effect on prices of products. Which of the statements given above is/are correct? |
| A. | l only |
| B. | 2 only |
| C. | Both l and 2 |
| D. | Neither l nor 2 |
| Answer» C. Both l and 2 | |
| 6. |
Consider the following statement :(1) Higher growth in GDP and population can occur together.(2) Per capita income always decreases with high population growth.Which of the statements given above is/are correct? |
| A. | l only |
| B. | 2 only |
| C. | Both l and 2 |
| D. | Neither l nor 2 |
| Answer» D. Neither l nor 2 | |
| 7. |
Consider the following statements in regard to devaluation and depreciation of a currency:(1) Devaluation is an activity conducted by central government whereas depreciation happens due to market forces. (2) In both the devaluation and depreciation currency loses value against other currencies in a floating currency exchange market:Which of the statements given above is/are correct? |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» B. 2 only | |
| 8. |
Consider the following statements in regard to 'Marginal Standing Facility (MSF)' of RBI :(1) It will help in reducing volatility in the overnight lending rates in the inter-bank market. (2) The borrowing under the MSF should be over and above the statutory liquidity requirement. Which of the statements given above is/are correct ? |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» B. 2 only | |
| 9. |
The volatility in the Indian share market is due to 1. inflow and outflow of foreign funds. 2. fluctuations in foreign capital markets. 3. changes in the monetary policy Which of the above mentioned causes are correct? |
| A. | 1 and 2 |
| B. | 1 and 3 |
| C. | 1, 2 and 3 |
| D. | 2 and 3 |
| Answer» B. 1 and 3 | |
| 10. |
Consider the following statement in regard to reserve currency :(1) Reserve currency acts at the international pricing currency in the global market for commodities like oil and gold. (2) The country whose local currency is accepted as reserve currency gets an added advantage in terms of lower commodity rates in the international market. Which of the statements given above is / are correct |
| A. | I only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» D. Neither 1 nor 2 | |
| 11. |
Consider the following in regard to the reason for the persistence of inflation according to the Economic Survey 2012-13(1) Inflation in protein foods, particularly eggs, meat and fish and in fruits and vegetables has persisted because of changes in dietary habits and supply constraints.(2) Rise in income is also a reason for sustained food inflation. (3) An increase in MSP while necessary to ensure remunerative returns to farmers, raised the floor prices and also contributed to the rise in input prices. Which of the statements given above are correct ? |
| A. | 1 and 2 only |
| B. | 2 and 3 only |
| C. | 1 and 3 only |
| D. | 1, 2 and 3 |
| Answer» E. | |
| 12. |
Consider the following statements in regard to 'RESIDEX' :(1) The index is prepared to track the prices of residential properties in India on the basis of actual transaction prices. (2) The index is prepared from the secondary data available from various sources like housing, finance companies and banks. Which of the statements given above is/are correct ? |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» D. Neither 1 nor 2 | |
| 13. |
India's Trade Policy (2009-14) seeks to 1. double the country's share of global trade by 20202. achieve a growth of 25 percent per annum in exports.3. double India exports of goods and services by 2014Choose the correct statement : |
| A. | 1 and 2 |
| B. | 2 and 3 |
| C. | 1 and 3 |
| D. | 1, 2 and 3 |
| Answer» D. 1, 2 and 3 | |
| 14. |
Consider the following statements in regard to inclusive development :(1) Inclusive developments refer to the social inclusion of the socially excluded sections of the society.(2) Creating productive and gainful employment opportunities. Which of the statements given above is/are correct ? |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» D. Neither 1 nor 2 | |
| 15. |
Consider the following statements in regard to money market in India :(1) It is a market for short-term and long-term funds with maturity ranging from overnight to one year.(2) It acts as an instrument of liquidity adjustment for the Central Bank.Which of the statements given above is/are correct? |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» C. Both 1 and 2 | |
| 16. |
The term mixed economy denoted existence of both |
| A. | rural and urban sector |
| B. | private and public sector |
| C. | heavy and small industry |
| D. | developed and under developed sector |
| Answer» C. heavy and small industry | |
| 17. |
In an economy, the sectors are classified into public and private on the basis of |
| A. | employment condition |
| B. | nature of economic activities |
| C. | ownership of enterprises |
| D. | use of raw materials |
| Answer» D. use of raw materials | |
| 18. |
Which sector of Indian economy has shown remarkable expansion during the last decade? |
| A. | Primary sector |
| B. | Secondary sector |
| C. | Tertiary sector |
| D. | Mining sector |
| Answer» D. Mining sector | |
| 19. |
It will be true to classify India as |
| A. | a food-deficit economy |
| B. | a labour-surplus economy |
| C. | a trade-surplus economy |
| D. | a capital-surplus economy |
| Answer» C. a trade-surplus economy | |
| 20. |
The Indian economy is characterised by |
| A. | pre-dominance of agriculture |
| B. | low per capita income |
| C. | massive unemployment |
| D. | all of the above |
| Answer» E. | |
| 21. |
Which of the following activities can lead to financial inclusion in India? (1) Issuing of general purpose credit cards. (2) Strict know your customer' (KYC) norms (3) Opening of Bank branches in unbanked rural areas. (4) Opening of no-frills account. Select the correct answer answer using the codes gives below : |
| A. | 1, 2 and 3 only |
| B. | 2, 3 and 4 only |
| C. | l, 3 and 4 only |
| D. | 2 and 3 only |
| Answer» D. 2 and 3 only | |
| 22. |
Consider the following statements in regard to 'Inflation Index bonds'?(1) Investment in these bonds is more risky as these bonds increase the inflation risk attached to the investment. (2) It is better financial instrument compared to gold to hedge the risk rising out of volatile economy.Which of the statements given above is are correct? |
| A. | 1 only |
| B. | 2 only |
| C. | both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» E. | |
| 23. |
Which of the following is are the functions of the national Development Council of India ?(1) To prescribe guidelines for preparation of the national economic plan, (2) To review the working of the national economic plan from time to time, (3) To consider important questions of social and economic policy affecting national development .Select the correct answer using the codes given below ? |
| A. | 1 only |
| B. | 1 and 2 only |
| C. | 2 and 3 only |
| D. | 1, 2 and 3 |
| Answer» E. | |
| 24. |
Consider the following statements . (1) Fiat money is a term used for Gold coins (2) Currency Deposits Ratio is the proportion of the total deposits commercial banks keep as reserves. Which of the above statements is/are correct? |
| A. | l only |
| B. | 2 only |
| C. | Both l and 2 |
| D. | Neither l nor 2 |
| Answer» E. | |
| 25. |
Consider the following systems :(1) Introduction of portfolio system in the Executive. (2) Establishment of a Federal public service commission. (3) Separation of provincial budgets from the central budget for the first time. Which of the systems given above was/were provided by the government of India, Act 1935 ? |
| A. | 1 and 2 only |
| B. | 2 only |
| C. | 1 and 3 only |
| D. | 3 only |
| Answer» C. 1 and 3 only | |
| 26. |
Which of the following should be considered for 'Pigovian taxation'?(1) Consumption of cigarettes(2) Research for new technologies(3) Burning of fossil fuels (4) Restoration of lost cultural heritage Choose the correct answer using the codes given below : |
| A. | 1 and 3 only |
| B. | 2, 3 and 4 only |
| C. | 1, 2 and 3 |
| D. | 2 and 4 only |
| Answer» B. 2, 3 and 4 only | |
| 27. |
Consider the following statements in regard to Hedge funds:(1) Hedge funds are open to all types of investors.(2) Hedge funds are immune to risk of the market and always produce positive returns.(3) Hedge funds are not sold the public or retail investors.Which of the statements given above is/are correct? |
| A. | 1 only |
| B. | 1 and 2 only |
| C. | 2 and 3 only |
| D. | 3 only |
| Answer» E. | |
| 28. |
Which of the following will not contribute to a higher current account deficit ?(1) Increase in price of crude oil (2) Rise in export of software services (3) Rise in import of services Choose the correct answer using the codes given below: |
| A. | 1 and 2 only |
| B. | 2 only |
| C. | 3 only |
| D. | 1 and 3 only |
| Answer» C. 3 only | |
| 29. |
Consider the following statements in regard to the GDP of a country :(1) Real GDP is calculated by keeping inflation into consideration. (2) Nominal GDP is calculated on the basis of the prices of goods and services produced in the current year. Which of the statements given above is/are correct? |
| A. | 1 only |
| B. | 2 only |
| C. | Both l and 2 |
| D. | Nether l nor 2 |
| Answer» D. Nether l nor 2 | |
| 30. |
In the hours of surging energy needs. why and how it is necessary to manage coal wisely for a sustainable socio-economic development? (1) Coal fired power plants are the biggest source of manmade CO2 emissions and coal energy the single greatest threat our climate faces. (2) To get to the coal we must either cut down the forests and/or displace large number of people from these regions.Select the correct answer using the codes given below : |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» E. | |
| 31. |
Which of the following comes under Non-plan expenditure?1. Subsidies2. Interest payments3. Defense expenditure4. Maintenance expenditure for the infrastructure Choose the correct answer using the codes given below : |
| A. | 1 and 2 |
| B. | 1 and 3 |
| C. | 2 and 4 |
| D. | 1, 2 , 3 and 4 |
| Answer» E. | |
| 32. |
In India rural incomes are generally lower than the urban incomes Which of the following reasons account for this?(1) A large number of farmers are illiterate and know little about scientific- agriculture.(2) Prices of primary products are lower than those of manufactured products.(3) Investment in agriculture has been lower when compared to investment in industry : |
| A. | 1, 2 and 3 |
| B. | 1 and 2 |
| C. | 1 and 3 |
| D. | 2 and 3 |
| Answer» B. 1 and 2 | |
| 33. |
Which of the following will not be the part of 'financial inclusion'?(1) Opening educational centres(2) Opening wealth management centers by Citibank.(3) Eradication of poverty.(4) Report of Khan commission on financial inclusion.Select the correct answer using the codes given below: |
| A. | 1, 2 and 3 only |
| B. | 1, 2 and 4 only |
| C. | 1, 3 and 4 only |
| D. | 1, 2, 3 and 4 |
| Answer» C. 1, 3 and 4 only | |
| 34. |
Consider the following the statements in regard to the goods and service tax:(1) The GST shall have two components : one levied by the central, and the other levied by the states.(2) The central GST and state GST are to be paid to the joint accounts of the center and the states.(3) While the imports would be zero-rated, the exports would be subjected to the GST. Which of the above statements is/are correct? |
| A. | 1 only |
| B. | 2 and 3 only |
| C. | 1 and 3 |
| D. | 1 and 2 only |
| Answer» B. 2 and 3 only | |
| 35. |
'Based III' norms target at which of the following?(1) Improve the banking sector's ability to absorb shocks arising from financial and economic stress. (2) Improve risk management and governance.(3) Strengthen banks' transparency. Choose the correct answer using the codes given below : |
| A. | 1 Only |
| B. | 1 and 2 only |
| C. | 1 and 3 only |
| D. | 1 , 2 and 3 |
| Answer» E. | |
| 36. |
The Ministry of Corporate Affairs has notified the Corporate Social Responsibility (CSR) rules and they would come into effect from April I. Under the new laws that govern companies, spending on CSR or social welfare activities is mandatory for certain class of firms. They are required to shell out at least 2 per cent of their three----year aver- age annual profit towards such works Which of the following firms classify under the new law to make CSR spend?(i) Companies having net worth of at least Rs 750 crore(ii) Companies having minimum turnover of Rs. 500 crore (iii) Companies with at least net profit of Rs 5 crore |
| A. | (i) & (ii) |
| B. | (i), (ii) & (iii) |
| C. | Only (iii) |
| D. | (i) & (iii) |
| Answer» D. (i) & (iii) | |
| 37. |
Which of the following governmental steps has proved relatively effective in controlling the double digit rate of inflation in the Indian economy during recent years? |
| A. | Containing budgetary deficits and unproductive expenditure |
| B. | Streamlined public distribution system |
| C. | Enhanced rate of production of all consumer goods |
| D. | Pursuing an export-oriented strategy |
| Answer» B. Streamlined public distribution system | |
| 38. |
Which one of the following is not a feature of India's economic planning? |
| A. | imperative planning |
| B. | limited centralisation |
| C. | democratic socialism |
| D. | indicative planning |
| Answer» B. limited centralisation | |
| 39. |
The theory of economic drain of India during British period was propounded by |
| A. | M.K. Gandhi |
| B. | Jawaharlal Nehru |
| C. | Dadabhai Naoroji |
| D. | R.C. Dutta |
| Answer» D. R.C. Dutta | |
| 40. |
Which of the following statement is true about the Primary deficit? |
| A. | It is difference between Revenue Receipts and Revenue Expenditure |
| B. | It is difference between Capital Receipts and Interest Payment |
| C. | It is difference between the Fiscal Deficit and Interest Payment |
| D. | It is addition of Fiscal Deficit and Interest Payment |
| Answer» D. It is addition of Fiscal Deficit and Interest Payment | |
| 41. |
Who among the following has suggested migration to accrual accounting system from cash based accounting system in India? |
| A. | I.V. Reddy |
| B. | D.N. Ghosh |
| C. | R.H. Patil |
| D. | C. Rangarajan |
| Answer» C. R.H. Patil | |
| 42. |
What is the approximate share of SSIs in gross industrial value added in the Indian economy? |
| A. | 25% |
| B. | 30% |
| C. | 5% |
| D. | 40% |
| Answer» E. | |
| 43. |
Consider the following statements:1. The Fifth Economic Census was conducted by CSO in the year 2007.2. Intelligent Character Recognition (ICR) technology is being used for detailed processing of the data collected in the Fifth Economic Census.Which of the statements given above is/are correct? |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» C. Both 1 and 2 | |
| 44. |
In free economy, inequalities in income is due to |
| A. | free competition |
| B. | private property and inhertance |
| C. | differences in the marginal productivity of labour |
| D. | private property only |
| Answer» C. differences in the marginal productivity of labour | |
| 45. |
Due to decrease in oil process and demand for gold, the trade deficit in December 2014 narrowed down to |
| A. | 7.25 billion US dollars |
| B. | 11.20 billion US dollars |
| C. | 7.5 billion US dollars |
| D. | 9.43 billion US dollars |
| Answer» E. | |
| 46. |
As per CRISIL index on Financial inclusion which part of India is top in the financial inclusion? |
| A. | South India |
| B. | East India |
| C. | West India |
| D. | North India |
| Answer» B. East India | |
| 47. |
In which of the following years, was the trade balance favourable to India? |
| A. | 1970-17 and 1974-75 |
| B. | 1972-73 and 1976-77 |
| C. | 1972-73 and 1975-76 |
| D. | 1971-72 and 1976-77 |
| Answer» C. 1972-73 and 1975-76 | |
| 48. |
Among India economists, who had done pioneering work on National Income? |
| A. | P.N Dhar |
| B. | Prof. Shenoi |
| C. | V.K.R. V Rao |
| D. | Jagdish Bhagwati |
| Answer» D. Jagdish Bhagwati | |
| 49. |
Tarapore committee was associated with which one of the following? |
| A. | Special Economic Zone |
| B. | Fully Capital Account Convertiblity |
| C. | Effect of Oil-prices on the Indian economy |
| D. | Foreign Exchange Reserve |
| Answer» C. Effect of Oil-prices on the Indian economy | |
| 50. |
When the prices of commodities, goods and services start declining consistently, the phenomenon is known as |
| A. | Discount field |
| B. | Deflation |
| C. | Negative growth |
| D. | Market capitalism |
| Answer» C. Negative growth | |