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 of the following pairings does not represent a set of complementary goods?
[A] Printers and Ink Cartridges
[B] Tea and Sugar
[C] Mobile Phones and SIM cards
[D] Tea and Coffee
Show Answer
Correct Answer: D [Tea and Coffee]
Notes:
Complementary goods, defined by their negative cross elasticity of demand, are products whose demand is influenced by one another. When the price of a good declines, the demand for its complementary good rises. Printers need ink cartridges, tea is often consumed with sugar, and mobile phones require SIM cards for operation. However, tea and coffee are substitutes, not complements, as they are consumed separately and often in place of one another, hence they are not complementary goods.
2. Planning Commission of India was established by which among the following means?
[A] Act of Parliament
[B] Presidential Order
[C] Presidential Ordinance
[D] Cabinet Resolution
Show Answer
Correct Answer: D [Cabinet Resolution]
Notes:
The Planning Commission was set up by a Cabinet Resolution of the Government of India in March 1950. Jawaharlal Nehru was the first Chairman of the Planning Commission. It had the responsibility to formulate plans to utilize the available resources.
3. Which goods are consumed collectively by the community?
[A] Public Goods
[B] Consumer Goods
[C] Non-durable Goods
[D] Durable Goods
Show Answer
Correct Answer: A [Public Goods]
Notes:
Public goods are non-excludable and non-rivalrous commodities or services. They are made available to all members of society without direct payment. Examples include national defense, clean air, and street lighting. Governments usually fund public goods due to the free rider problem. Paul Samuelson formally defined public goods in 1954. Provision and maintenance typically rely on taxation and government administration.
4. “Lockout” is term used for a work stoppage in industry for which of the following?
[A] Employees refuse to work
[B] Employer prevents employees from working
[C] Trade unions prevent the employees to work
[D] Employer close the work premises permanently
Show Answer
Correct Answer: B [Employer prevents employees from working]
Notes:
In the context of industry, a lockout is a temporary measure used by employers to prevent workers from entering the workplace. This is typically done in response to a labor dispute or strike, and is intended to protect the employer’s property and ensure the safety of workers and others on the premises. A lockout may be imposed by an employer unilaterally, or it may be agreed upon as part of a collective bargaining agreement with a labor union. During a lockout, workers are not allowed to enter the workplace or perform their duties, and the employer may not provide any work or pay to the affected workers. A lockout can have significant economic and social consequences for both the employer and the affected workers, and is generally considered a last resort in the resolution of labor disputes.
5. Which among the following is the main function of Agricultural Finance Corporation Limited ?
[A] consultancy services in the field of agriculture
[B] social service organization
[C] Agricultural commodities exchange
[D] Agricultural cooperative society
Show Answer
Correct Answer: A [consultancy services in the field of agriculture]
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.
6. In the abbreviation APEDA, what does P stand for ?
[A] Pisciculture
[B] Products
[C] Processed Food Products
[D] Promotion
Show Answer
Correct Answer: C [Processed Food Products]
Notes:
Agricultural and Processed Food Products Export Development Authority (APEDA) is an apex body under the Ministry of Commerce and Industry, Government of India, responsible for the export promotion of agricultural products. Its headquarters are located in New Delhi. It is a statutory body established under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December, 1985.
7. In which year, the practice of presenting the railway budget separate from the general budget (or vice versa in true sense) started in India?
[A] 1920
[B] 1924
[C] 1925
[D] 1930
Show Answer
Correct Answer: B [1924]
Notes:
In the year 1924, the practice of presenting the railway budget separately from the general budget (or vice versa in true sense) started in India.
8. The “Service area Approach” was an strategy launched to improve which of the following?
[A] Micro, Small and medium Enterprising
[B] Unorganized Sector
[C] Rural lending
[D] Urban Industrial Lending
Show Answer
Correct Answer: C [Rural lending]
Notes:
The “Service Area Approach” was introduced in 1989 by the Reserve Bank of India to enhance rural lending. It aimed to allocate specific geographical areas to banks, ensuring that credit and financial services reached underserved rural populations. This strategy was part of broader efforts to promote financial inclusion and support rural development, addressing the needs of agriculture and small enterprises.
9. Consider the following statements regarding Cost Push Inflation:
- Cost Push Inflation is a function of the costs such as wages, rent, interest rates etc.
- Cost Push Inflation can be controlled easily in comparison to Demand Pull Inflation.
- The purchasing power of Rupee decreases in case of Cost Push Inflation.
- Cost Push Inflation often results from supply shocks like oil price increases.
Which of the above statements is / are correct?
[A] 1, 3 and 4
[B] Only 1
[C] 1 and 2
[D] 2 and 3
Show Answer
Correct Answer: A [1, 3 and 4]
Notes:
Cost-push inflation arises from increases in production costs like wages and raw materials (statement 1). It cannot be controlled easily compared to demand-pull inflation (statement 2 is incorrect). Inflation reduces the purchasing power of money (statement 3). Supply shocks, e.g., rising oil prices, often trigger cost-push inflation (statement 4). Thus, 1, 3, and 4 are correct.
10. 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 for Promotion of Industry and Internal Trade (Ministry of Commerce and Industry)
[D] Foreign Investment Promotion Board
Show Answer
Correct Answer: C [Department for Promotion of Industry and Internal Trade (Ministry of Commerce and Industry)]
Notes:
Under India’s FDI policy, proposals for single brand retail trading that require Government approval are examined by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry. DPIIT is the competent authority for processing such approval-route FDI proposals. The Reserve Bank of India’s regional offices do not grant these approvals, and the Foreign Investment Promotion Board no longer functions as the approving body for such cases.
