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. Approval of which among the following authorities alone would be sufficient to draw funds from Consolidated Fund of India ?
[A] Only Parliament
[B] Only President
[C] Either Parliament or President
[D] Both Parliament and President
Show Answer
Correct Answer: A [Only Parliament]
Notes:
No money can be appropriated (issued or drawn) out of Consolidated fund of India except in accordance with a parliamentary law.
2. Which among the following is a Progressive Tax?
[A] Customs duty
[B] Development Surcharge
[C] Income tax
[D] Sales tax
Show Answer
Correct Answer: C [Income tax]
Notes:
In progressive taxation, the tax liability increases with individual or entity income. This is based on principle of “ability to pay”. Under this system, lowest income people are generally exempted while highest income people pay highest taxes. Income Tax is thus an example of progressive tax. Progressive taxation results in redistribution of income from rich to poor.
3. Bombay Plan was presented in which year?
[A] 1934
[B] 1940
[C] 1942
[D] 1944
Show Answer
Correct Answer: D [1944]
Notes:
In 1944 Eight Industrialists of Bombay including Mr. JRD Tata, GD Birla, Purshottamdas Thakurdas , Lala Shriram, kasturbhai lalbhai, AD Shroff , Ardeshir Dalal, & John Mathai working together prepared “A Brief Memorandum Outlining a Plan of Economic Development for India” which was popularly known as Bombay Plan. This plan envisaged doubling the per capita income in 15 years and tripling the national income during this period.
4. Consider the following:
- Minor Irrigation Scheme: CCA less than 2000 Hectares
- Medium Irrigation Scheme : CCA more than 2000 Hectares but less than 10000 Hectares
- Major Irrigation Scheme : CCA more than 10000 Hectares
Which among the above statements is / are correct?
[A] Only 1 and 2 are correct
[B] Only 2 and 3 are correct
[C] all are correct
[D] all are incorrect
Show Answer
Correct Answer: C [all are correct]
Notes:Various irrigation schemes in India were classified by the erstwhile planning commission into three parts viz. Minor, Medium and Major Irrigation schemes.
- Major irrigation Scheme: Major irrigation schemes are those schemes which have a Culturable Command Areas of More than 10,000 hectares.
- Medium irrigation Schemes: The Medium Irrigation Schemes have a CCA of 2,000-10,000 hectares.
- Minor Schemes: Those with Culturable command areas up to 2000 hectares.
Cultural command area is the basis for the design of water course and basis for the design of an irrigation project. It is the proportion of the Gross Command Area which is Culturable and cultivable.
5. How many banks are promoting the National Payments Corporation of India (NPCI)?
[A] 6
[B] 8
[C] 10
[D] 12
Show Answer
Correct Answer: C [10]
Notes:
The National Payments Corporation of India is an umbrella organisation for operating retail payments and settlement systems in India. It is promoted by 10 banks.
6. The Reserve Bank of India works as a lender of the last resort (LOLR). Which among the following is the correct statement in this context?
[A] RBI meets all the demands of the commercial banks in times of difficulties
[B] RBI meets all the reasonable demands of the commercial banks in times of difficulties
[C] RBI is the last lender to the Government at the centre and the states
[D] RBI grants loans to the banks and also the Governments in states
Show Answer
Correct Answer: B [RBI meets all the reasonable demands of the commercial banks in times of difficulties]
Notes:
The banks can borrow from the RBI on the basis of eligible securities or any other arrangement and at the time of need or crisis, they approach RBI for financial help. Thus RBI works as Lender of the Last Resort (LORL) for banks.
7. Who among the following famous author was an Investment Banker prior to turning become to columnist, and speaker?
[A] Arvind Adiga
[B] Chetan Bhagat
[C] Jhumpa Lahiri
[D] Kiran Desai
Show Answer
Correct Answer: B [Chetan Bhagat]
Notes:
Chetan Bhagat, the correct answer, worked as an investment banker at Deutsche Bank before becoming a bestselling author and columnist. His debut novel, “Five Point Someone,” published in 2004, gained immense popularity and was adapted into a successful Bollywood film. Bhagat’s writing often addresses contemporary issues faced by Indian youth, making him a prominent figure in Indian literature.
8. Which among the following is the chief characteristic of the primary industry of the developed countries?
[A] Larger farm size and increasing corporate ownership of farms
[B] Larger farm size and more government ownership of farms
[C] Smaller farm size and a diversity of crops on each farm
[D] Smaller farm size and fewer family-owned farms
Show Answer
Correct Answer: A [Larger farm size and increasing corporate ownership of farms]
Notes:
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.
9. Which of the following is the least preferred option by government for deficit financing?
[A] Printing of currency notes
[B] Loans from World bank and IMF
[C] Disinvestment of government holdings
[D] Open sale of government securities and bonds in market
Show Answer
Correct Answer: A [ Printing of currency notes ]
Notes:
Printing of currency creates a situation where too much money chases few goods and thus leads to condition of inflation. So; it is the last preferred option for government.
10. A Goldilocks economy is represented by __:
[A] Low Inflation , High Economic Growth
[B] High Inflation, Low Economic Growth
[C] Low Inflation, Steady economic growth
[D] High Inflation, High Economic Growth
Show Answer
Correct Answer: C [ Low Inflation, Steady economic growth ]
Notes:
A colloquial term for an economy that combines low inflation with steady economic growth
