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 bodies estimates the national income of India?
[A] Office of the Economic Advisor
[B] Ministry of Statistics
[C] Central Statistical Office
[D] Ministry of Finance
Show Answer
Correct Answer: C [Central Statistical Office]
Notes:
The Central Statistics Office (CSO) is a governmental agency in India under the Ministry of Statistics and Programme Implementation. It is responsible for estimating National Income, Index of Industrial Production and Consumer Price Indices.
2. Which among the following groups of Banks in India was previously referred as ‘Other Scheduled Commercial Banks’?
[A] National Banks
[B] Foreign Banks
[C] Scheduled Cooperative Banks
[D] Private Banks
Show Answer
Correct Answer: D [Private Banks]
Notes:
The correct answer is “Private Banks.” In India, “Other Scheduled Commercial Banks” referred to banks that did not fall into the categories of National Banks or Foreign Banks. Private Banks, which are owned by private entities, were classified under this term before the regulatory framework evolved. As of now, the Reserve Bank of India (RBI) categorizes banks into various groups, including Public Sector Banks, Private Sector Banks, Foreign Banks, and Scheduled Cooperative Banks. Notably, the first private bank in India was the “Oudh Commercial Bank,” established in 1881.
3. Which currency did Keynes propose for global trade from 1940 to 1942?
[A] The Whuffie system managed by the International Trade Organization
[B] The Unitas managed by the World Monetary Authority
[C] The Bancor managed by the International Clearing Union
[D] The Terra managed by the Global Central Bank
Show Answer
Correct Answer: C [The Bancor managed by the International Clearing Union]
Notes:
Keynes and E. F. Schumacher proposed the Bancor as a supranational currency between 1940–1942. The International Clearing Union was suggested to manage its use in global trade. The Bancor proposal was presented by the United Kingdom at the Bretton Woods Conference in 1944. The concept was intended to prevent persistent surpluses or deficits among countries. The Bancor was not adopted; instead, the U.S. dollar was chosen as the main reserve currency.
4. When a Demand Draft is deposited, what is the bank’s role?
[A] Creditor of the customer
[B] Debtor of the customer
[C] Agent of the customer
[D] Trustee of the customer’s funds
Show Answer
Correct Answer: B [Debtor of the customer]
Notes:
When a customer deposits a Demand Draft, the bank becomes a debtor. The relationship is that the bank owes the equivalent amount to the customer and must repay on demand. This debtor-creditor relationship is regulated by the Indian Contract Act, 1872 and the Banking Regulation Act, 1949. The bank has no trustee obligations in such straightforward deposit transactions.
5. The term OTDS is mainly linked to which WTO negotiation area?
[A] Intellectual Property & Geographical Indications
[B] Non-Agricultural Market Access (NAMA)
[C] Agriculture
[D] Services Trade
Show Answer
Correct Answer: C [Agriculture]
Notes:
Overall Trade-Distorting Domestic Support (OTDS) is defined in the context of WTO agriculture negotiations. OTDS includes Aggregate Measure of Support (AMS), Blue Box payments, and de minimis support. OTDS commitments were discussed during the Doha Round agriculture talks beginning in 2001. WTO ministerial conferences periodically review and negotiate OTDS reduction by member countries. India and other countries have submitted proposals focusing on agriculture OTDS at these negotiations.
6. Which institution has the highest Priority Sector Lending norm in India as of 2026?
[A] Small Finance Banks
[B] Regional Rural Banks
[C] Domestic Scheduled Commercial Banks
[D] Urban Co-operative Banks
Show Answer
Correct Answer: B [Regional Rural Banks]
Notes:
Regional Rural Banks are mandated to allocate 75% of their Adjusted Net Bank Credit to priority sectors as per the latest guidelines for 2026. Small Finance Banks’ requirement was reduced to 60% in 2026. Domestic Scheduled Commercial Banks are set at 40%. Urban Co-operative Banks have a 60% requirement. These are specified under Reserve Bank of India regulations.
7. According to FERA ,Foreign Exchange includes which of the following?
[A] Traveler’s Cheque
[B] Letters of Credit
[C] Bill of Exchange expressed or drawn in Indian Currency
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
According to FERA ,1973 Foreign Exchange means Foreign Currency, which includes: Any Draft Traveller’s Cheque Letters of Credit Bill of Exchange expressed in Indian Currency but payable in Foreign Currency
8. At which rate does RBI borrow funds from commercial banks?
[A] Bank Rate
[B] Repo Rate
[C] Reverse Repo Rate
[D] Statutory Liquidity Ratio
Show Answer
Correct Answer: C [Reverse Repo Rate]
Notes:
The reverse repo rate is the rate at which the Reserve Bank of India borrows money from commercial banks. It is used to absorb liquidity from the banking system. RBI conducts reverse repo operations as part of its monetary policy framework. As of June 2024, the reverse repo rate is 3.35%. Reverse repo was introduced in 1996 under Section 17(4B) of the RBI Act, 1934.
9. Which of the following is the situation, when there is only one buyer and one seller of product?
[A] Public monopoly
[B] Monopsony
[C] Franchised monopoly
[D] Bilateral monopoly
Show Answer
Correct Answer: D [Bilateral monopoly]
Notes:
A bilateral monopoly is a market structure consisting of both a monopoly (a single seller) and a monopsony (a single buyer).
10. Which among the following is a direct tax?
[A] Corporate tax
[B] Wealth tax
[C] Income tax
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Direct tax is a government levy on the income, property, or wealth of people or companies. A direct tax is borne entirely by the entity that pays it, and cannot be passed on to another entity. Examples include corporation tax, income tax, and social security contributions.
