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.
1. Rs. 100 notes are printed at which locations in India?
[A] Nashik and Dewas only
[B] Mysore and Salboni only
[C] Nashik, Dewas, Mysore and Salboni only
[D] Noida and Hoshangabad
Show Answer
Correct Answer: C [Nashik, Dewas, Mysore and Salboni only]
Notes:
Indian banknotes are printed at four currency presses in the country. Two presses operated by SPMCIL are located at Nashik and Dewas, while the other two presses run by BRBNMPL are at Mysuru and Salboni. These four locations together handle the printing of ₹100 notes and other denominations as per RBI requirements. Hence, the correct answer is the combination of all four printing locations.
2. National Rural Credit Stabilization Fund is a Institution of purpose-specific funds in which of the following?
[A] IDBI
[B] SIDBI
[C] IFCI
[D] NABARD
Show Answer
Correct Answer: D [NABARD]
Notes:
The National Rural Credit stabilization fund is a sector specific finds maintained with National Bank for Agriculture and Rural Development. This fund includes contributions from Central and State Governments, sums contributed by RBI and the sums contributed by NABARD’s board every year.
3. What is India's commitment on the number of new branches that foreign banks may open in a year under WTO GATS, and what is the corresponding branch commitment in the India–EU FTA?
[A] 12 branches per year under WTO GATS; 15 branches over four years under the India–EU FTA
[B] 15 branches per year under WTO GATS; 12 branches over four years under the India–EU FTA
[C] 12 branches per year under WTO GATS; 20 branches over four years under the India–EU FTA
[D] 20 branches per year under WTO GATS; 15 branches per year under the India–EU FTA
Show Answer
Correct Answer: A [12 branches per year under WTO GATS; 15 branches over four years under the India–EU FTA]
Notes:
India’s WTO commitment under GATS limits market access for foreign bank branches to 12 branches in a year for all foreign banks taken together. In the India–EU FTA financial services offer, the branch licensing framework is more liberal and allows up to 15 bank branches to be established over a four-year period. The two figures apply to different trade arrangements, so they should not be read as the same annual cap.
4. Which of the following is not a Selective Credit Control measure?
[A] Margin Requirements
[B] Regulation of Consumer Credit
[C] Rationing of Credit
[D] Open Market Operations
Show Answer
Correct Answer: D [Open Market Operations]
Notes:
Qualitative or selective methods of credit control refers to those methods which limit the nature or variety of money supply rather than its quantity. Such methods include regulation of margin requirement, credit rationing, regulation of consumer credit and direct action. Open Market Operations is a quantitative method of credit control.
5. A monopolist will be able to maximize his profits when _________?
[A] His output is maximum
[B] He charges a Higher price
[C] His average cost is minimum
[D] His marginal cost is equal to the marginal revenue
Show Answer
Correct Answer: D [His marginal cost is equal to the marginal revenue]
Notes:
A monopolist can maximize profits when the marginal cost is equivalent to the marginal revenue. This strategy is implemented because the greatest profit occurs at the output level where the difference between total revenue and total cost is the greatest. This ensures economic efficiency and profit gains for the monopolist.
6. Which among the following curve defines the principle that zero tax rate would produce zero revenue for the government and a 100% tax rate would also generate zero revenue for the taxing Government?
[A] Laffer curve
[B] Lorenz curve
[C] Engel curve
[D] Kuznets curve
Show Answer
Correct Answer: A [Laffer curve]
Notes:
The Laffer curve is a theoretical concept in economics that illustrates the relationship between tax rates and government revenue. The curve is named after economist Arthur Laffer, who popularized the concept in the 1970s. The basic idea behind the Laffer curve is that there is a certain tax rate that will maximize government revenue. At a 0% tax rate, the government will obviously not collect any revenue. At a 100% tax rate, the government will also not collect any revenue because people will have no incentive to work. The Laffer curve suggests that there is a point in between these two extremes where the government will collect the most revenue. The exact shape and location of the Laffer curve will vary depending on various factors, such as the state of the economy and the efficiency of the government’s tax collection system.
7. Which of the following gets the stamp duty on promissory notes in India?
[A] Union Government levies the duty, but the proceeds go to the State Government
[B] State Government levies the duty and keeps the entire proceeds
[C] Union Government and State Government share the duty equally
[D] State Government levies the duty, but the proceeds go to the Union Government
Show Answer
Correct Answer: A [Union Government levies the duty, but the proceeds go to the State Government]
Notes:
Stamp duty on promissory notes is a Union levy under the Indian Stamp Act, but the revenue is assigned to the States. In constitutional terms, the Union imposes the duty, while the States collect and retain the proceeds under Article 268. This makes the proceeds a State revenue item, even though the taxing power for these instruments is not exercised by the States themselves.
8. The negotiable instruments are passed freely from one party to another almost in the same way as money. To be negotiable, a promissory note must include a / an:
[A] conditional promise to pay on demand or at a definite time
[B] unconditional promise to pay on demand or at an indefinite time
[C] unconditional promise to pay on demand or at a definite time
[D] conditional promise to pay on demand or at an indefinite time
Show Answer
Correct Answer: C [unconditional promise to pay on demand or at a definite time]
Notes:
A promissory note is a negotiable instrument only when it contains an unconditional promise to pay a certain sum of money. The payment may be made on demand or at a definite time, but it cannot depend on any condition. This is a basic requirement under negotiable instruments law. Therefore, option 3 correctly states the essential feature of negotiability in a promissory note.
9. 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.
10. Which of the following curves represents the demand of all consumers in the market taken together at different levels of the price of the good?
[A] Monotonic
[B] Indifferent
[C] Market demand
[D] Diminishing
Show Answer
Correct Answer: C [Market demand]
Notes:
The market demand curve is the summation of all the individual demand curves in a given market. It shows the quantity demanded of the good by all individuals at varying price points.
