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. Who among the following is called father of Economics?
[A] David Hume
[B] Lamarck
[C] Adam Smith
[D] John Stuart Mill
Show Answer
Correct Answer: C [Adam Smith]
Notes:
Adam smith is considered as father of Modern Economics. In his book “The nature & causes of wealth of the Nation’s 1776, he has described economics as science of wealth. According to him economy is the study of wealth only and it deals with its production and consumption. Only material goods which are scarce and useful are wealth.
2. 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.
3. Ad Valorem Tax is levied on the basis of which among the following?
[A] Volume
[B] Value
[C] Production
[D] Export
Show Answer
Correct Answer: B [Value]
Notes:
Ad valorem tariff is calculated on the basis of the value of the imported good, expressed as a percentage of such value. For example, an ad valorem tariff of 10% on an imported car worth US 10000 would lead to a requirement to pay US 1000 as customs duty.
4. Which among the following is an anti-inflationary measure?
[A] Stagflation
[B] Hyper inflation
[C] Disinflation
[D] Deflation
Show Answer
Correct Answer: C [Disinflation]
Notes:
Disinflation means the decrease in the rate of inflation. It is a slowdown in the rate of increase of price levels of goods and services. This is different from deflation, in the way that Disinflation is only a marginal and short term decrease in rate of inflation.
5. 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.
6. Which condition does not trigger RBI’s Prompt Corrective Action (PCA) for banks?
[A] High Non-Performing Assets (NPA)
[B] Low Capital Adequacy Ratio (CAR)
[C] Low Return on Assets (RoA)
[D] High Leverage Ratio
Show Answer
Correct Answer: D [High Leverage Ratio]
Notes:
The RBI’s PCA framework mandates intervention if a bank records net NPA above 6%, capital adequacy ratio below 9%, or negative return on assets for four years. PCA restrictions include halting dividend payments and branch expansion. A leverage ratio above 25 times Tier 1 capital also triggers PCA. Leverage ratio measures a bank’s core capital relative to its total assets and exposure.
7. Which organization publishes The Global Enabling Trade Report?
[A] World Bank
[B] World Trade Organization
[C] World Economic Forum
[D] UNCTAD
Show Answer
Correct Answer: C [World Economic Forum]
Notes:
The Global Enabling Trade Report is published by the World Economic Forum. The first edition appeared in 2008. The report assesses the policies, institutions, and services facilitating trade globally. The World Economic Forum is headquartered in Geneva, Switzerland, and was established in 1971. The report includes the Enabling Trade Index, which ranks countries based on their trade enabling factors.
8. Which agency approves FDI proposals in Single Brand retail under Government Route?
[A] Regional Office of Reserve Bank of India
[B] Department of Economic Affairs (Ministry of Finance)
[C] Department of Industrial Policy and Promotion (Ministry of Commerce and Industry)
[D] Foreign Investment Promotion Board
Show Answer
Correct Answer: C [Department of Industrial Policy and Promotion (Ministry of Commerce and Industry)]
Notes:
Department of Industrial Policy and Promotion is mandated to receive FDI proposals under the Government Route since 2017. It operates under the Ministry of Commerce and Industry. The Foreign Investment Facilitation Portal is managed by the Department for Promotion of Industry and Internal Trade, previously DIPP. FDI proposals in single brand retailing must be filed online with this department, complying with FEMA regulations.
9. Which of the following is / are auctioned in Open Market Operations?
[A] Shares
[B] Debentures
[C] Securities
[D] Bullion
Show Answer
Correct Answer: C [ Securities ]
Notes:
Open Market Operations refer to the purchase and sale of the Government securities (G-Secs) by RBI from / to market.
10. In context with banking in India, a Custodial Account is created for __:
[A] Illiterates
[B] Women
[C] Minor persons
[D] Senior Citizens
Show Answer
Correct Answer: C [ Minor persons ]
Notes:
A Custodial Account in India is specifically designed for minor persons, allowing adults to manage assets on behalf of minors until they reach the age of majority, which is 18 years. This type of account ensures that minors can benefit from investments and savings while being protected under legal guardianship. Custodial accounts are commonly used for educational savings and other financial planning purposes for children.
