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. In an inflationary trend, the pricing of the bank products are:
[A] At increasing trend
[B] At decreasing trend
[C] No relevance of Inflation
[D] Constant
Show Answer
Correct Answer: A [At increasing trend]
Notes:
Inflation is the decline of purchasing power of a particular currency over time. It is reflected as an increase in general prices. As the demand for credit increases, the pricing of bank products also increases.
2. Which among the following is the main motive of the Reserve Bank of India behind it’s mechanism known as Devolvement ?
[A] To counter the problem of low capital in the scheduled banks
[B] To counter the volatility in the price of Government Securities
[C] To handle the problem of discrepancy in accounting systems in banks
[D] To control the scheduled banks’ assets and liabilities
Show Answer
Correct Answer: B [To counter the volatility in the price of Government Securities]
Notes:
The main motive of the Reserve Bank of India (RBI) behind the mechanism known as devolvement is to counter the volatility in the price of Government Securities. Devolvement occurs when underwriters fail to fully subscribe to a government bond auction, leading the RBI to purchase the unsold portion. This helps stabilize the market by ensuring liquidity and maintaining orderly pricing of government securities, which are crucial for fiscal policy and economic stability. The RBI’s role in this process is vital for managing interest rates and ensuring confidence in government debt instruments.
3. From time to time, which among the following body publishes the “Exchange Control Manual” in context with the Foreign Exchange in India?
[A] Foreign Trade Promotion Board
[B] Department of Commerce
[C] Reserve Bank of India
[D] SEBI
Show Answer
Correct Answer: C [Reserve Bank of India]
Notes:
The correct answer is the Reserve Bank of India (RBI). The RBI is responsible for regulating foreign exchange in India under the Foreign Exchange Management Act (FEMA) of 1999. The “Exchange Control Manual” provides guidelines for foreign exchange transactions and is crucial for maintaining the stability of the Indian economy. The RBI also plays a key role in managing the country’s foreign exchange reserves and ensuring compliance with international financial regulations.
4. International Rubber Study Group is located at?
[A] Kua La Lumpur
[B] Singapore
[C] Phnom Penh
[D] London
Show Answer
Correct Answer: B [Singapore]
Notes:
The headquarters of International Rubber Study Group are located in Singapore. It was established in 1944 in London but was relocated in Singapore in 2008.
5. UDYAMI helpline is for?
[A] Large capital Industries
[B] Female entrepreneur
[C] Farmers introducing technology in Farming
[D] Micro, small & medium size enterprises
Show Answer
Correct Answer: D [Micro, small & medium size enterprises]
Notes:
Udyami Helpline with number 1800 180 6763 is a Call Centre of Ministry of Micro, Small and Medium Enterprises (MSME), Government of India. It was launched in 2010 to work as a single point facility for MSMEs needing different kinds of information and accessibility of Banks and other MSME-related organisations.
6. Which among the following is correct in context with the White ATMs (Automated Teller Machines) ?
[A] ATMs owned by Foreign Companies
[B] ATMs not owned by banks but by private ATM service providers.
[C] Outsourced ATM Service by Banks – The ATM named under a brand sponsor bank but ATM machine not owned by the Bank
[D] ATMs owned by Government
Show Answer
Correct Answer: B [ATMs not owned by banks but by private ATM service providers.]
Notes:
‘White label ATM’: These are ATM’s which are not owned by banks but by private ATM service providers. Customers from any bank can deposit or
withdraw money from such ATMs. They will provide ATM services to customers of all banks. Such ATMs will be White Label Automated Teller Machines-WLAs and will provide ATM services to customers of all banks. WLA cannot charge customers.
7. Which statement best describes the term “Transfer Pricing” that India is contending with?
[A] It is a tax evasion method involving illicit capital flows out of the country
[B] It is a factor causing the continuous rise in food prices in India
[C] It is a recent phenomenon resulting in the bad loans of Indian banks
[D] It is a global phenomenon causing the devaluation of the Indian currency against reserve currencies
Show Answer
Correct Answer: A [It is a tax evasion method involving illicit capital flows out of the country]
Notes:
Transfer pricing refers to the pricing of goods or services within a multinational corporation or group. These transactions may not be influenced by market forces that typically shape relations between individual firms. This system allows for a possible method of tax evasion, where one party transfers goods or services to another for a specific price, often facilitating illicit capital flows out of the country.
8. With reference to the International Trade, the International Harmonized System (HS) of goods is maintained by __:
[A] World Trade Organization
[B] World Customs Union
[C] UNCTAD
[D] None of them
Show Answer
Correct Answer: B [World Customs Union]
Notes:
The WCO maintains the international Harmonized System (HS) goods nomenclature, and administers the technical aspects of the World Trade Organization (WTO) Agreements on Customs Valuation and Rules of Origin. World Customs Organization (WCO) is an intergovernmental organization headquartered in Brussels, Belgium.
9. What do we call the funds that the banks keep with RBI as a portion of their Net Demand and Time Liabilities?
[A] Statutory Liquidity Ratio
[B] Cash Reserve Ratio
[C] Bank Rate
[D] Reverse Repo Rate
Show Answer
Correct Answer: B [Cash Reserve Ratio]
Notes:
The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve bank of India as a portion of their Net Demand and Time Liabilities (NDTL).
10. Financial inclusion means which of the following?
[A] retail banking
[B] bringing all poor people under banking net
[C] financial statements
[D] wholesale banking
Show Answer
Correct Answer: B [bringing all poor people under banking net]
Notes:
Financial inclusion aims to bring in digital financial solutions for the economically underprivileged people of the nation. It also intends to bring in mobile banking or financial services in order to reach the poorest people living in extremely remote areas of the country.
