Indian Economy MCQs

Notes:
Stagflation refers to persistent high inflation coupled with high unemployment and stagnant demand /growth in economy.
High Inflation + Low Economic Growth {or conditions of recession} + Low Employment Generation = Stagflation

Notes:
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.

Notes:
Plantation crops are crops that are grown on large farms, called plantations, and are typically grown for commercial purposes. These crops are often grown on a large scale using specialized techniques and equipment, and are typically exported to other countries for sale. Some examples of plantation crops include:

1. Sugar cane: This is a tropical grass that is grown for its sweet, juicy stalks, which are used to make sugar.
2. Rubber: This is a tree that is grown for its latex, which is used to make rubber.
3. Tea: This is a bush that is grown for its leaves, which are used to make tea.
4. Coffee: This is a shrub that is grown for its beans, which are used to make coffee.
5. Coconut: This is a tree that is grown for its fruit, which is used to make coconut milk and oil.
6. Banana: This is a tree that is grown for its fruit, which is a popular food around the world.
7. Palm oil: This is a tree that is grown for its fruit, which is used to make palm oil.
8. Tobacco: This is a plant that is grown for its leaves, which are used to make tobacco products such as cigarettes.
9. Cotton: This is a plant that is grown for its fibers, which are used to make textiles and other products.

Plantation crops are an important source of income and employment for many countries, and they contribute significantly to the global economy.

Notes:
Sterilization involves central banks selling government securities in the open market to absorb liquidity created by foreign capital inflows. The Reserve Bank of India uses open market operations for this purpose. By selling government securities, the central bank withdraws excess rupee liquidity from the banking system. This method helps limit the expansion of the money supply and manage inflationary pressures resulting from increased foreign exchange reserves.

Notes:
The tertiary (services) sector is the largest contributor to India’s GDP in FY26, with a share of 56.4% in Gross Value Added, according to the First Advance Estimates. The services sector grew by 9.1% in FY26.

Notes:
The correct answer is Merit Goods. Merit goods are products or services that the government believes are beneficial for individuals and society, and thus should be available to all, regardless of their ability to pay. Examples include education and healthcare. Governments often subsidize these goods to ensure equitable access, as they can lead to positive externalities, such as a more educated workforce and improved public health.

Notes:
The Indian Rupee symbol was designed by D Udaya Kumar in 2010. He was then an assistant professor at IIT Guwahati. The government conducted a public contest in 2009 for the symbol’s design. His design combines the Devanagari ‘र’ and the Latin ‘R’. The government officially adopted the symbol on 15 July 2010. Kumar received a cash award of ₹2.5 lakh for his design.

Notes:
Miadi Hundi, also known as Muddati Hundi, is payable after a specified period. A usance bill of exchange is a negotiable instrument also payable after a certain period, not on demand. Unlike Darshani Hundi, which is payable at sight, Miadi Hundi and usance bills both provide deferred payment terms for commercial transactions.

Notes:
The headquarters of International Rubber Study Group are located in Singapore. It was established in 1944 in London but was relocated in Singapore in 2008.

Notes:
Coastal headlands and islands of Peru, especially the Chincha Islands, are known for rich guano deposits. By 1250 CE, the Chincha Kingdom harvested seabird guano from these islands for agricultural fertilizer. Guano collection continued as a major economic activity through the colonial era. The Humboldt Current supports abundant seabird populations that produce the guano deposits.