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. First state in India to launch a policy to establish Special Agriculture Zones (SAZs):
[A] Uttar Pradesh
[B] Gujarat
[C] Haryana
[D] Uttarakhand
Show Answer
Correct Answer: D [Uttarakhand]
Notes:
Uttarakhand was the first state to set up Special Agricultural Zones (SAZs) in 2011. It was launched on the lines of the Special Economic Zones (SEZs). It encouraged the farmers to develop high-quality crop seeds typical to hilly regions.
2. Which of the following is an example of a progressive tax?
[A] Customs duty
[B] Sales tax
[C] Excise duty
[D] Income tax
Show Answer
Correct Answer: D [Income tax]
Notes:
Income tax was introduced in India in 1860 by Sir James Wilson. Income tax rates in India increase with higher income slabs as per the Finance Act. The income tax structure is defined in the Income Tax Act, 1961. Income tax collection is administered by the Central Board of Direct Taxes. A progressive tax system is implemented where tax liability rises as an individual’s income increases, with no fixed single rate for all.
3. Which among the following is an essential feature of a commercial bank?
[A] providing Locker facilities
[B] dealing with credit
[C] providing business information and data
[D] Sale of securities
Show Answer
Correct Answer: B [dealing with credit]
Notes:
Section 5 of Banking Regulation Act 1949 defines Banking as the act of accepting deposits for the purpose of lending. Commercial banks deal with money, accepts deposits and advance short-term loans / credits.
4. Trombay, Nangal & Sindri are famous for which of the following?
[A] Iron
[B] Coal
[C] Fertillizers
[D] seeds
Show Answer
Correct Answer: C [Fertillizers]
Notes:
Trombay, Nangal, and Sindri are famous for fertilizers. The first fertilizer plant was established in Sindri, Jharkhand. Fertilizers are materials that are applied to soil or plant tissue to provide nutrients for plant growth. They can be natural or synthetic in origin. Trombay is located in Maharashtra. Nangal is a town in Punjab, India. Sindri is a neighborhood in Dhanbad, Jharkhand.
5. Which institution publishes the World Economic Outlook Report?
[A] Federal Reserve Bank
[B] World Bank
[C] International Monetary Fund
[D] International Finance Corporation
Show Answer
Correct Answer: C [International Monetary Fund]
Notes:
The International Monetary Fund was established in 1944. The IMF has 190 member countries. The World Economic Outlook Report is published by the IMF biannually. The report provides analyses and projections of the global economy. The WEO was first published in 1980. Updates to the report are typically released in January and July.
6. Who among the following are the beneficiaries of Ways and Means Advances (WMA) facility of Reserve Bank of India?
[A] Commercial Banks
[B] Regional Rural banks
[C] State Governments
[D] Authorized Dealers of Foreign Exchanges
Show Answer
Correct Answer: C [State Governments]
Notes:
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).
7. Which term is not formally linked with Indian government budgets?
[A] Outcome Budget
[B] Gender Budget
[C] Austerity Budget
[D] Performance Budget
Show Answer
Correct Answer: C [Austerity Budget]
Notes:
Austerity Budget is not an official budget type in India. Outcome Budget was introduced in 2005 to link allocations with measurable results. Gender Budget was initiated in 2005-06 for women’s development. Performance Budget allocates funds based on achievements. The Indian Union Budget officially includes Outcome, Gender, and Performance Budgets, but not Austerity Budget.
8. Economic growth is normally coupled with?
[A] Inflation
[B] Hyper Inflation
[C] Deflation
[D] Stagflation
Show Answer
Correct Answer: A [Inflation]
Notes:
Economic growth results in higher disposable income available with the consumers which increases the overall demand along with the supply available for the consumers. This increase in demand spurs inflation, which eventually becomes a necessary evil for a growing economy.
9. 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.
10. With reference to the business, what is working capital?
[A] The investment made in the business
[B] Fixed assets
[C] Circulating assets- stocks, cash and debts owed to the business
[D] Amount spent on machinery or for building up stock
Show Answer
Correct Answer: C [ Circulating assets- stocks, cash and debts owed to the business ]
Notes:
Current Assets minus Current Liabilities is known as working capital.
