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. A rise in price of one commodity will induce a fall in demand of another commodity, then the commodities are___?
[A] Complimentary
[B] Supplementary
[C] Competing
[D] Auxiliary
Show Answer
Correct Answer: A [Complimentary]
Notes:
A complementary commodity is the one which is used along with another commodity. When the price of a particular commodity rises, it will induce a fall in demand of another commodity. This is because consumers may not prefer to buy only the complement.
2. The name of Sir Chintaman Dwarkanath Deshmukh is special in the Indian Banking Sector. He was __________?
[A] First Indian to establish a Bank in India
[B] First Indian to be chairman of State Bank of India
[C] First Indian to be governor of the Reserve Bank of India (RBI),
[D] Pioneer in Indian Commercial Banking
Show Answer
Correct Answer: C [First Indian to be governor of the Reserve Bank of India (RBI),]
Notes:
Sir Chintaman Dwarkanath Deshmukh was the first Indian to be the governor of the Reserve Bank of India (RBI), serving from 1943 to 1949. He played a crucial role in shaping India’s monetary policy post-independence and was instrumental in establishing the RBI as a key institution in the Indian economy. Deshmukh was also a prominent figure in the Indian banking sector, contributing to various financial reforms.
3. Which of the following statements best describes a progressive tax system?
[A] The tax rate decreases as the taxable amount increases
[B] The tax rate stays the same regardless of the taxable amount
[C] The tax rate increases as the taxable amount increases
[D] The tax rate is randomly determined
Show Answer
Correct Answer: C [The tax rate increases as the taxable amount increases]
Notes:
In a progressive tax system, higher income earners pay a higher tax rate compared to those who earn less. This is based on the assumption that individuals who earn more have the ability and the capacity to pay more taxes. Most income tax systems in the world are progressive, including the United States, Canada, and the United Kingdom.
4. Economic Planning comes under which of the following lists ?
[A] Union List
[B] Concurrent list
[C] State List
[D] None of them
Show Answer
Correct Answer: B [Concurrent list]
Notes:
Economic Planning refers to any plans of economic activity which point to achieve specific social and economic outcomes. It is a subject matter of concurrent list in 7th schedule of Indian constitution.
5. Investment in which among the following is the Most Risk Free asset of a Bank as per the RBI guidelines?
[A] Housing Loans
[B] Government Approved Securities
[C] Venture Capital Investments
[D] Loans against Jewellery
Show Answer
Correct Answer: B [Government Approved Securities]
6. ” Income generated from Tourism” can be placed in which among the following?
[A] Invisible Import
[B] Invisible Export
[C] Visible Import
[D] Visible Export
Show Answer
Correct Answer: B [Invisible Export]
Notes:
The correct answer is “Invisible Export.” Income from tourism is classified as an invisible export because it involves services provided to foreign visitors, generating revenue without the physical transfer of goods. This aligns with the economic concept where exports of services (like tourism) contribute to a country’s balance of payments.
7. In economy, which among the following can be measured by calculating concentration ratios?
[A] Devlopment
[B] Inflation
[C] Competition
[D] Social Security
Show Answer
Correct Answer: C [Competition]
Notes:
Competition is generally measured by calculating concentration ratios. Concentration ratios indicate whether an industry consists of a few large firms or many small firms. Two of the most commonly used metrics are the Herfindahl Hirschman Index (HHI) and the N-firm concentration ratio.
8. Which among the following was not Stipulated in the Fiscal Responsibility And Budget Management Act 2003?
[A] Elimination of revenue deficit
[B] Elimination of primay deficit
[C] Non-borrowing by the central government from RBI except in certain situations
[D] Fixing government guarantees in any financial year as a percentage of GDP
Show Answer
Correct Answer: B [Elimination of primay deficit]
Notes:
The correct answer is “Elimination of primary deficit.” The Fiscal Responsibility and Budget Management (FRBM) Act of 2003 aimed to ensure fiscal discipline in India by targeting the elimination of revenue deficits and limiting government borrowing. However, it did not explicitly mandate the elimination of the primary deficit, which is the fiscal deficit excluding interest payments. The Act focuses on sustainable fiscal management rather than eliminating all forms of deficits.
9. Which of the following is India’s first payments bank?
[A] Jio Payments Bank Ltd
[B] Paytm Payments Bank
[C] India Post Payments Bank
[D] Airtel Payments Bank
Show Answer
Correct Answer: D [ Airtel Payments Bank ]
Notes:
Fourth option is the correct answer. Airtel Payments Bank is India’s first payments bank.
10. Which section of the RBI allows the RBI to provide loans to banks and state financial corporations?
[A] 17
[B] 18
[C] 19
[D] 20
Show Answer
Correct Answer: A [ 17 ]
Notes:
Under Section 17, The RBI can provide loans to banks and state financial corporations. It can provide advances to the central government and state governments.
