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 imposes a greater burden (relative to resources) on the poor than on the rich ?
[A] Progressive tax
[B] Regressive Tax
[C] Lump Sum tax
[D] Proportional tax
Show Answer
Correct Answer: B [Regressive Tax]
Notes:
A regressive tax is the one in which tax rate decreases as the amount subject to taxation increases; and the tax rate progresses from high to low. The lowest amount is subject to higher taxation and this leads to individuals with low income bear the highest burden of regressive taxes. Such tax does not take into account the ability to pay.
2. For which of the commodities the unit bpd is used in international trade?
[A] Meat & Livestock
[B] Precious Metals
[C] Industrial metals
[D] Crude oil
Show Answer
Correct Answer: D [Crude oil]
Notes:
Its barrel per day , amount of crude oil (measured in barrels) produced or consumed by an entity in one day. One barrel 42 gallons
3. Which of the following organizations provides Buffer Stock Financing Facility ?
[A] Reserve Bank of India
[B] Asian Development Bank
[C] International Monetary Fund
[D] World Bank
Show Answer
Correct Answer: C [International Monetary Fund]
Notes:
IMF in 1969 to provide financial assistance to members with a temporary balance of payments need arising from contributions to buffer stocks established under approved international commodity agreements
4. Which among the following is a opposite activity of hedging in share / currency /future markets?
[A] arbitrage
[B] speculation
[C] spread
[D] short
Show Answer
Correct Answer: B [speculation]
Notes:
The correct answer is “speculation.” Speculation involves taking on risk in hopes of making a profit from price movements, contrasting with hedging, which aims to reduce risk. While hedging protects against losses, speculation seeks to capitalize on market fluctuations. Notably, speculators can importantly influence market liquidity and volatility.
5. Which among the following helps to solve the balance of payments problem of member countries?
[A] World Bank
[B] International Development Fund
[C] Asian Development Bank
[D] World Economic Forum
Show Answer
Correct Answer: B [International Development Fund]
Notes:
The correct answer is the International Development Fund (IDF). The IDF, part of the World Bank Group, provides financial assistance to developing countries to help them address balance of payments issues. It offers concessional loans and grants aimed at stabilizing economies and promoting sustainable development. The Asian Development Bank also plays a role in this area, but the IDF specifically targets balance of payments support.
6. Which among the following agency is responsible for enforcement of Foreign Exchange Management Act 1999 and Prevention of money Laundering Act 2002 in India?
[A] Reserve Bank of India
[B] Department of Revenue
[C] Enforcement Directorate
[D] Income Tax Department
Show Answer
Correct Answer: C [Enforcement Directorate]
7. If a company is ‘unlimited’ in India, it implies that there is no limit on __:
[A] Number of shares it can issue in market
[B] Liability of its members
[C] Amount of investment by its promoters
[D] All of the above
Show Answer
Correct Answer: B [ Liability of its members ]
Notes:
The unlimited company is a company where there is no limit on the liability of its members.
8. Imposing an Import quota helps in__:
- correcting unfavourable balance of payments
- improving balance of trade
- protecting domestic industries
- promoting exports
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 1 & 3
[C] Only 1, 2 & 3
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: C [ Only 1, 2 & 3 ]
Notes:
An import restriction imposed on imported goods, to reduce the quantity of certain goods allowed into a country from a particular exporting country, in a stated period. The purpose may be to conserve foreign currency, if there is an unfavourable balance of payments, or to protect the home market against foreign competition (see protective duty). Quotas are usually enforced by means of import licenses.
9. Which of the following bodies issues white-colour and blue-colour forms to investors?
[A] SEBI
[B] IrDA
[C] RBI
[D] NSE
Show Answer
Correct Answer: A [ SEBI ]
Notes:
White colour forms are for Resident Indian, and blue colour forms are for NRIs, Foreign Venture Capital, Investor, and Foreign Institutional Investors. These forms are issued by SEBI for investment in capital market.
10. If a company has “Trade Receivables”, this implies that __:
[A] It has made a sale but yet to collect payments
[B] It has received payments but yet to make a delivery
[C] It has received an order but yet to make delivery
[D] None of the above is a correct definition
Show Answer
Correct Answer: A [ It has made a sale but yet to collect payments ]
Notes:
If a company has receivables, this means it has made a sale but has yet to collect the money from the purchaser.
