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. In September 1999, which organization established the Poverty Reduction and Growth Facility (PRGF) to make the objectives of poverty reduction and growth more central to lending operations in its poorest member countries?
[A] Asian Development Bank
[B] International Monetary Fund
[C] World Bank
[D] US Federal Bank
Show Answer
Correct Answer: B [International Monetary Fund]
Notes:
The Poverty Reduction and Growth Facility (PRGF) was set up by the International Monetary Fund in September 1999. Its objective was to formulate policies focusing on growth and poverty reduction.
2. Which among the following is a correct definition of Dollarization?
[A] when the inhabitants of a country use US dollars in parallel to or instead of the domestic currency
[B] when the inhabitants of a country use only US Dollars instead of a domestic currency
[C] when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency
[D] None of the above
Show Answer
Correct Answer: C [when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency]
Notes:
when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency, The term is not only applied to usage of the United States dollar, but generally to the use of any foreign currency as the national currency.
3. Which bank coordinates the selling of State Development Loans (SDLs) in India?
[A] SBI
[B] IDBI
[C] Scheduled Commercial Banks
[D] RBI
Show Answer
Correct Answer: D [RBI]
Notes:
State Development Loans are debt instruments issued by state governments in India. The Reserve Bank of India acts as the agent for all state governments in managing and coordinating the auction and sale of SDLs. RBI notifies the details and conducts the actual sale process via electronic platforms regulated by it, ensuring efficient borrowing for states.
4. Which of the following is not a Selective Credit Control measure?
[A] Margin Requirements
[B] Regulation of Consumer Credit
[C] Rationing of Credit
[D] Open Market Operations
Show Answer
Correct Answer: D [Open Market Operations]
Notes:
Qualitative or selective methods of credit control refers to those methods which limit the nature or variety of money supply rather than its quantity. Such methods include regulation of margin requirement, credit rationing, regulation of consumer credit and direct action. Open Market Operations is a quantitative method of credit control.
5. Who among the following was the architect of second five year plan ?
[A] Jawahar Lal Nehru
[B] C D Deshmukh
[C] P C Mahalanobis
[D] Subimal Datt
Show Answer
Correct Answer: C [P C Mahalanobis]
Notes:
Prasantha Chandra Mahalanobis or P. C. Mahalanobis (1893-1972) was the first Indian statistician to receive world recognition. In 1933, Mahalanobis founded the first Indian statistical journal Sankhya, along the lines of Biometrika, which had inspired him greatly. He was architect of India’s second five year plan and due to this second plan is known as Mahalanobis model.
6. Which term represents government’s total borrowing needs from all sources?
[A] Revenue Deficit
[B] Fiscal Deficit
[C] Primary Deficit
[D] Effective Revenue Deficit
Show Answer
Correct Answer: B [Fiscal Deficit]
Notes:
Fiscal deficit is calculated as total expenditure minus the sum of revenue receipts and non-debt capital receipts. Fiscal deficit data is published annually in the Union Budget. It shows the full amount the government must borrow in a financial year. The government’s fiscal deficit for 2023-24 was targeted at 5.9% of GDP.
7. Which measure is crucial for sustaining India’s service sector growth?
[A] Increase protectionist measures
[B] Focus solely on domestic consumption
[C] Expand digital infrastructure and high-speed connectivity
[D] Eliminate all foreign direct investment
Show Answer
Correct Answer: C [Expand digital infrastructure and high-speed connectivity]
Notes:
According to the Economic Survey 2025-26, India’s services sector contributed 56.4% to Gross Value Added in FY25. Services exports reached USD 387.5 billion in FY25. The Survey reports that expanding digital infrastructure and high-speed connectivity is essential for supporting digitally delivered services. Government focus is on scaling infrastructure, with projected data center capacity of 8 GW by 2030. Digital enablement is highlighted as critical for sectoral growth.
8. What is the current global total fertility rate compared to replacement-level fertility?
[A] The global rate is 2.25, above the replacement level of 2.1
[B] The global rate is 2.3, below the replacement level of 2.5
[C] The global rate is below replacement level of 2.2 as of 2023
[D] The global rate is 2.52, matching replacement level
Show Answer
Correct Answer: A [The global rate is 2.25, above the replacement level of 2.1]
Notes:
The global fertility rate was about 2.25 births per woman in 2023. Replacement-level fertility is 2.1 children per woman for most countries. Global fertility was above 5 in the 1960s. United Nations demographic reports use 2.1 as the replacement threshold. Fertility rates have been consistently declining worldwide in recent decades. Population projections show this rate may drop below replacement by 2100.
9. Which authority regulates chit funds in India?
[A] SEBI
[B] RBI
[C] State governments
[D] Central government
Show Answer
Correct Answer: C [State governments]
Notes:
The Chit Funds Act, 1982 is a central law governing chit funds in India. Regulation, registration, and licensing are administered by the state governments. Each state appoints a Registrar of Chits to oversee chit fund activities. Central government sets the legislative framework, but daily regulation and enforcement are delegated to the respective states as per the Act.
10. Who publishes the Travel and Tourism Development Index (TTDI)?
[A] World Tourism Organization
[B] World Travel & Tourism Council
[C] World Economic Forum
[D] Amnesty International
Show Answer
Correct Answer: C [World Economic Forum]
Notes:
The World Economic Forum publishes the Travel and Tourism Development Index. The index replaced the Travel & Tourism Competitiveness Index in 2021. TTDI assesses the tourism sectors of various countries. The World Economic Forum is headquartered in Geneva, Switzerland and was founded in 1971. The latest TTDI report was released in 2024.
