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 is First Indian Special Economic Zone(SEZ)?
[A] Visakhapatnam SEZ
[B] Kandla SEZ
[C] Noida Special Economic Zone
[D] Cochin SEZ
Show Answer
Correct Answer: B [Kandla SEZ]
Notes:
The Kandla Special Economic Zone (KASEZ) was established in the year 1965 as the first Export Processing Zone in India. It is also the first special economic zone in India and in Asia. It is located in Kutch District of Gujarat.
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. At which of the following places steam engines were originally manufactured by India Railway ?
[A] Varanasi
[B] Perambur
[C] Chittranjan
[D] Patiala
Show Answer
Correct Answer: C [Chittranjan]
Notes:
The first steam locomotive produced by Chittaranjan Locomotive Works (CLW) was dedicated to the nation on November 1, 1950. This significant event coincided with the renaming of the Loco Building Works as Chittaranjan Locomotive Works, in honor of the freedom fighter, leader, and statesman Deshbandhu Chittaranjan Das. The dedication ceremony was conducted by the first President of India, Dr. Rajendra Prasad. This marked an important milestone in the history of CLW, establishing it as a key manufacturer in India’s locomotive industry. The production of steam locomotives commenced earlier on January 26, 1950, and over the years, CLW evolved to become the largest locomotive manufacturer in the world.
4. In which of the following actions will be taken by Reserve bank of India, to curb the excess liquidity, when the deficit financing increases?
[A] Increases CRR
[B] Decreases Bank rate
[C] Resorts to open market operations
[D] Raises the Tax rates
Show Answer
Correct Answer: A [Increases CRR]
Notes:
RBI can reduce the excess liquidity by using the liquidity adjustment facility to manage high levels of inflation. This can be done by increasing the repo rate or cash reserve ratio. This will reduce the money supply in India’s economy.
5. Which among the following is referred to as the “Soft Loan Window” of the World Bank?
[A] International Monetary Fund
[B] International Finance Corporation
[C] International Development Association
[D] World Trade Organization
Show Answer
Correct Answer: C [International Development Association]
Notes:
The “Soft Loan Window” of the World Bank is commonly referred to as the International Development Association (IDA). It was founded in 1960 and provides low or zero-interest loans and grants to the world’s poorest countries. These “soft” loan terms allow for improved economic development and poverty reduction. Unlike the World Bank, the IDA seeks to reduce poverty by providing loans to developing countries for programs that are intended to boost economic growth and improve living conditions.
6. Which among the following has never been an agenda of Financial Sector Reforms in India?
[A] Providing easy credit to all citizens with subsidies guaranteed
[B] Deregulation of the interest rate regime
[C] Enabling regulatory framework for effective supervision
[D] Strengthening the Disclosure norms
Show Answer
Correct Answer: A [Providing easy credit to all citizens with subsidies guaranteed]
Notes:
The easy credit to all citizens with “subsidies guaranteed” can not be an agenda of financial sector reforms. Subsidies are provided to weaker sections of the society.
7. Which among the following will not be an entry in the Profit and Loss account of a bank ?
[A] Interest expense on deposits
[B] Interest earned on advances.
[C] Profit/loss on sale of assets
[D] Income from investment banking related activities
Show Answer
Correct Answer: C [Profit/loss on sale of assets]
Notes:
Profit/loss on sale of assets is an entry in the manufacturing company` s P & L account under the heading other income. In banks the other income includes income from distribution of financial products, income from investment banking related activities, treasury gains and other fee incomes
8. Consider the following:
- Minor Irrigation Scheme: CCA less than 2000 Hectares
- Medium Irrigation Scheme : CCA more than 2000 Hectares but less than 10000 Hectares
- Major Irrigation Scheme : CCA more than 10000 Hectares
Which among the above statements is / are correct?
[A] Only 1 and 2 are correct
[B] Only 2 and 3 are correct
[C] all are correct
[D] all are incorrect
Show Answer
Correct Answer: C [all are correct]
Notes:
Various irrigation schemes in India were classified by the erstwhile planning commission into three parts viz. Minor, Medium and Major Irrigation schemes.
- Major irrigation Scheme: Major irrigation schemes are those schemes which have a Culturable Command Areas of More than 10,000 hectares.
- Medium irrigation Schemes: The Medium Irrigation Schemes have a CCA of 2,000-10,000 hectares.
- Minor Schemes: Those with Culturable command areas up to 2000 hectares.
Cultural command area is the basis for the design of water course and basis for the design of an irrigation project. It is the proportion of the Gross Command Area which is Culturable and cultivable.
9. Which among the following finds highest weight age in the Index of Industrial Production?
[A] Electricity
[B] Steel Industry
[C] Refinery Products
[D] Coal
Show Answer
Correct Answer: C [Refinery Products]
Notes:
The Refinery products industry has the highest weight of 28.04% in the IIP. Steel industry has the second highest weightage of 17.92%. Electricity has a weight of 19.85%, which is the third highest.
10. Which among the following is NOT an instrument of qualitative control in India ?
[A] Regulation of the Consumer Credit
[B] Rationing of the Credit
[C] Margin Requirements
[D] Variable Costs and Reserves
Show Answer
Correct Answer: D [Variable Costs and Reserves]
Notes:
For example OMO, CRR, Bank rate and SLR are Variable Reserves & Costs and are instruments of quantitative control in India, Regulation of the Consumer Credit, Rationing of the Credit and margin Requirements do NOT affect the total credit in the system. Thus they are called qualitative control measures
