Indian Economy MCQs

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The Monetary Policy Committee was formed in 2016 after an amendment to the RBI Act, 1934. The Committee consists of six members: three from the Reserve Bank of India and three nominated by the Central Government. The Governor of the Reserve Bank of India is designated as the ex-officio Chairperson of the Monetary Policy Committee.

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Inflation refers to rise in general price level of goods and services, deflation is fall in general price level of goods and services. Deflation is inflation in negative zone, i.e. a decrease in the general price level of goods and services.

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In the year 1948, India’s first Industrial Policy Resolution was adopted. This resolution defined the roles of government in development of industries in independent India. This policy determined that India would follow a mixed economy model having both public and private enterprises.

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The Competition Commission of India (CCI) is the statutory body responsible for preventing practices that have an adverse effect on competition in India. It enforces the Competition Act, 2002 and works to promote fair competition, protect consumer interests and ensure freedom of trade in markets. It is a quasi-judicial authority and the correct choice among the given options. The consumer forums and the Central Vigilance Commission do not perform this competition-regulation function.

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Commercial banks are called creators of money because when they sanction loans, they credit the borrower’s account with a fresh deposit. This creates new bank money and increases the money supply. In modern economies, bank lending is an important source of deposit creation, while cash reserves and existing deposits are not simply transferred from one person to another. The key point is that lending by commercial banks expands deposits through the banking system.

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The Reserve Bank of India (RBI) provides temporary loan facilities to the central and state governments. This loan facility is called Ways and Means Advances (WMA).

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Competition is generally measured by calculating concentration ratios. Concentration ratios indicate whether an industry consists of a few large firms or many small firms. Two of the most commonly used metrics are the Herfindahl Hirschman Index (HHI) and the N-firm concentration ratio.

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Coastal headlands and islands of Peru, especially the Chincha Islands, are known for rich guano deposits. By 1250 CE, the Chincha Kingdom harvested seabird guano from these islands for agricultural fertilizer. Guano collection continued as a major economic activity through the colonial era. The Humboldt Current supports abundant seabird populations that produce the guano deposits.

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Karnataka produced 13,278 tonnes of raw silk in 2024-25, about 32% of India’s total. The state contributes approximately 45% of India’s mulberry silk. Major silk-producing districts are Mandya, Kolar, Chikkaballapur, and Ramanagara. Silk cultivation in Karnataka covers about 1.2 lakh hectares. The Silk Samagra-2 scheme supports sericulture in the state.

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Consider agriculture in the developed countries such as United States and Canada. There, the small family farms are not able to earn a profit and are being replaced by large corporate farms.