Indian Economy MCQs

Notes:
Arbitrage is a type of trade in which a security is simultaneously bought and sold, in different markets. This type of trade takes advantage of the difference in prices of the same financial instrument being offered on different exchanges.

Notes:
While estimating the national income, the problem of double counting occurs when the value of some goods and services are counted more than once. Cotton output and cotton cloth output both the raw material and the final result are counted.

Notes:
Green Revolution- Food grains,
White Revolution Milk,
Yellow Revolution-Oil seeds,
Blue Revolution-Fisheries
Golden Revolution-Fruits;
 Silver Revolution-Eggs,
 Round Revolution Potato,
Pink Revolution-Meat,
 Grey Revolution (Fertilizers)

Notes:
Agricultural Finance Corporation Limited (AFC) is a development organization that provides consulting, advisory, and implementation support for agriculture and rural development in India. AFC was established in 1968 by India’s banking industry.

Notes:
Sikkim produces about 80% of India’s large cardamom. It is grown mainly in the Himalayan region of Sikkim due to the favorable climate and altitude. Sikkim’s production reached approximately 5.591 thousand tonnes in 2025. The government initiative “Mero Alaichi, Mero Dhan” supports cardamom cultivation in Sikkim. Assam, Gujarat, and Kerala do not match Sikkim’s output in this crop.

Notes:
In 2024, India was the second-largest steel producer after China. India produced around 149.4 to 149.6 million tonnes of crude steel. China produced 1,005.1 million tonnes, and Japan ranked third with 84 million tonnes. Major Indian companies include Tata Steel, JSW Steel Limited, and SAIL. India plans to expand steel production capacity to 300 million tonnes by 2030 and 500 million tonnes by 2047.

Notes:
During inflation, central banks often raise policy rates, causing banks to increase loan and deposit rates. Higher inflation causes nominal lending and deposit rates to be repriced upwards. In 2023, the Reserve Bank of India increased repo rates in response to inflation, leading to higher lending rates in the Indian banking sector.

Notes:
Decreasing public expenditure and increasing taxes are classic contractionary fiscal measures to reduce demand and combat inflation. Delaying debt payments helps conserve resources for these fiscal actions. However, reducing public debt is not a direct anti-inflation measure, as it does not immediately affect aggregate demand. Thus, 1, 3 and 4 are correct selective anti-inflation fiscal measures.

Notes:
There are two different sets of classifications ‘revenue vs capital expenditure’ and ‘ plan vs non-plan.’
In general, expenditure used to create assets (building a road for instance) is capital expenditure while revenue expenditure consists of expenses such as salaries and other administrative costs. Plan expenditure covers money spent on schemes or projects run by different ministries under the five-year plans.
Schemes Such as the MG National Rural Employment Guarantee Scheme can have both revenue and capital components. For instance, the administrative costs of a plan scheme could be classified as revenue expenditure while the expenditure on the scheme itself (e.g. building a village road) might be capital expenditure. Non-plan expenditure consists of any expenditure by the government not covered by the five year plans. These include interest payments on government debt and expenditure on organs of the state such as the judiciary and the police.

Notes:
Forward guidance was widely adopted after the 2008 global financial crisis. The Federal Reserve began explicit forward guidance in 2011. The European Central Bank used this tool in 2013. The Bank of Japan started using forward guidance in 2013. Forward guidance aims to influence market expectations about future monetary policy. It became prominent when policy rates approached zero, limiting conventional monetary tools.