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. Which among the following correctly denotes Reserve Money?
[A] Currency in circulation
[B] Currency in Circulation + Other deposits of the General Public with RBI
[C] Currency in circulation + Other deposits of the general Public with RBI + Cash held with the banks
[D] Currency in circulation + Other deposits of the general Public with RBI + Cash held with the banks + Banker’s Deposits with RBI
Show Answer
Correct Answer: D [Currency in circulation + Other deposits of the general Public with RBI + Cash held with the banks + Banker’s Deposits with RBI]
Notes:
Reserve money is also called High Powered Money / central bank money. It is the Currency in Circulation plus Deposits of Commercial Banks with RBI.
2. Who among the following Indian Economists played a crucial role in inception of MNREGA?
[A] Amartya Sen
[B] Jean Dreze
[C] Jagdish Natwarlal Bhagwati
[D] Dr. Vijay Kelkar
Show Answer
Correct Answer: B [Jean Dreze]
Notes:
Jean Dreze is an Economist of Indian Origin born in Belgium. He conceptualized and drafted the first version of MGNREGA. He was the member of National Advisory Council and has coauthored “An Uncertain Glory: India and its Contradiction” with noted economist Amartya Sen.
3. Which authority regulates violations in foreign currency convertible bonds in India?
[A] Securities and Exchange Board of India (SEBI)
[B] Reserve Bank of India (RBI)
[C] Foreign Investment Promotion Board (FIPB)
[D] Bombay Stock Exchange (BSE)
Show Answer
Correct Answer: B [Reserve Bank of India (RBI)]
Notes:
The Reserve Bank of India (RBI) regulates FCCBs under the External Commercial Borrowings (ECB) framework and the Foreign Exchange Management Act (FEMA). RBI issues guidelines on FCCBs, sets minimum maturity periods, and monitors compliance with foreign exchange regulations. SEBI regulates securities markets but does not regulate FCCB violations. FIPB was abolished in 2017. Bombay Stock Exchange acts as an exchange, not a regulator.
4. What percentage of global oil production is attributed to OPEC?
[A] 25%
[B] 35%
[C] 40%
[D] 55%
Show Answer
Correct Answer: C [40%]
Notes:
OPEC accounted for about 40% of global crude oil production as of 2023. OPEC’s production ranged near 34 million barrels per day in 2023. The organization also holds over 70% of the world’s proven oil reserves. OPEC was founded in 1960 in Baghdad. Major OPEC members include Saudi Arabia, Iran, Iraq, and Venezuela.
5. Consider the following items with respect to the classification of “Total Food Grains” in India:
- Rice
- Wheat
- Coarse cereals (such as millet, barley, sorghum)
- Pulses (including lentils, chickpeas)
Which of the above are included in the definition of Total Food Grains by Indian agricultural standards?
[A] Only 1 and 2
[B] 1, 2, 3 and 4
[C] 1, 2 and 3
[D] 1, 2 and 4
Show Answer
Correct Answer: B [1, 2, 3 and 4]
Notes:
Total Food Grains, as classified by Indian agricultural authorities, comprise rice, wheat, all types of coarse cereals (millet, barley, sorghum, etc.), and pulses. These groups are reported together in agriculture statistics and policy documents, as both cereals and pulses are major staple food grains cultivated and consumed across India.
6. Directorate of Marketing and Inspection (DMI) is an attached Office of which among the following ministries?
[A] Ministry of Food Processing
[B] Ministry of Commerce
[C] Ministry of Agriculture
[D] Ministry of Finance
Show Answer
Correct Answer: C [Ministry of Agriculture]
Notes:
The Directorate of Marketing and Inspection (DMI) operates under the Department of Agriculture, Cooperation, and Farmers Welfare, Ministry of Agriculture and Farmers Welfare. It was established in 1935 and serves as the regulatory body responsible for promoting and regulating marketing and quality control of agricultural and allied products in the country.
7. The Tobin tax was originally proposed for which type of transactions?
[A] Real estate transactions
[B] Foreign exchange transactions
[C] Stock and bond transactions
[D] All financial transactions
Show Answer
Correct Answer: B [Foreign exchange transactions]
Notes:
James Tobin proposed the Tobin tax in 1972 as a tax on international foreign exchange transactions. The proposal followed the end of dollar convertibility to gold and adoption of floating exchange rates. Tobin suggested tax rates between 0.1% and 1% on currency conversions. The original focus was specifically on foreign exchange markets to curb currency speculation and exchange-rate volatility.
8. A transfer payment is a payment that is __:
[A] made by the government to its current workers
[B] made to people who are needy
[C] For in-kind services provided to the government
[D] For which no services or goods are rendered
Show Answer
Correct Answer: D [ For which no services or goods are rendered ]
Notes:
Transfer Payment is the payment exchanged for return of no goods or services. It generally describes the welfare expenditure of the government such as subsidies, pensions, grants etc.
9. The business transactions done in lieu of which of the following would be called Invisible Trade?
- Consulting
- Income from foreign investment
- Shipping services
- Tourism
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 2 & 3
[C] Only 3 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [ 1, 2, 3 & 4 ]
Notes:
Business transactions that occur with no exchange of tangible goods called Invisible Trade. It involves the transfer of non-tangible goods and/or service, intellectual property and patents. Examples of invisible trade including consulting, income from foreign investment, shipping services and tourism.
10. India’s Foreign Trade Policy also known as Export Import Policy (EXIM) is framed and implemented by the:
[A] Director General of Foreign Trade (DGFT)
[B] Home Ministry
[C] Niti Aayog
[D] Finance commission
Show Answer
Correct Answer: A [ Director General of Foreign Trade (DGFT) ]
Notes:
The Director General of Foreign Trade is responsible for implementing the India’s Foreign Trade Policy.
