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. Approximately what fraction of India’s rubber is produced by Kerala?
[A] 60%
[B] 70%
[C] 80%
[D] 90%
Show Answer
Correct Answer: D [90%]
Notes:
Kerala produces approximately 90% of India’s rubber. The state has a tropical climate ideal for rubber cultivation, and it is home to vast rubber plantations. Rubber was introduced to India in the late 19th century, and Kerala has since become the leading producer, importantly contributing to the state’s economy.
2. 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.
3. What do we call an arrangement whereby an issuing Bank at the request of the Importer (Buyer) undertakes to make payment to the exporter (Beneficiary) against stipulated documents?
[A] Bill of Exchange
[B] Letter of Exchange
[C] Letter of Credit
[D] Bill of Entry
Show Answer
Correct Answer: C [Letter of Credit]
Notes:
The correct answer is “Letter of Credit.” A Letter of Credit (LC) is a financial document issued by a bank that guarantees payment to the exporter upon presentation of specified documents, such as shipping and insurance documents. This arrangement reduces risk for both parties in international trade, ensuring that the exporter receives payment and the importer receives the goods. LCs are widely used in global commerce, with the first recorded use dating back to the 12th century in the Mediterranean trade.
4. Approval of which among the following is needed to draw funds from Consolidated Fund of India?
[A] President
[B] Parliament
[C] Council of Ministers
[D] All the above
Show Answer
Correct Answer: B [Parliament]
Notes:
The Consolidated Fund of India was created under Article 266 of the Indian Constitution. The government meets all its expenditure from this fund and it needs parliamentary approval to withdraw money from this fund.
5. Investment in which among the following is the Most Risk Free asset of a Bank as per the RBI guidelines?
[A] Housing Loans
[B] Government Approved Securities
[C] Venture Capital Investments
[D] Loans against Jewellery
Show Answer
Correct Answer: B [Government Approved Securities]
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. Consider the following:
- Reverse Repo Rate
- Cash Reserve Ratio
- Statutory Liquidity Ratio
- Bank Rate
An increase in which among the above could raise the interest rates in the market?
[A] 1
[B] 1 & 2
[C] 1, 2 & 3
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [1, 2, 3 & 4]
Notes:
The Reserve Bank uses various policy levers, such as repo rate, reverse repo rate, cash reserve ratio, statutory liquidity ratio and bank rate, to influence the amount of money in the market. An increase in any one of these could raise the interest rates.
8. How many key infrastructure sectors are known as Core sector in Indian Economy, used for Index of Industrial Production (IIP) data?
[A] 5
[B] 6
[C] 7
[D] 8
Show Answer
Correct Answer: D [8]
Notes:
There are 8 Core Industries or core sectors of the economy viz. coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity used in Index of Industrial Production (IIP).
9. What is this vertical farming?
[A] Its a new method of agriculture in which crops are cultivated inside multi-storey buildings
[B] Its a new method of agriculture in which various unrelated crops are grown together in same tract of land
[C] Its a new method of agriculture in which various closely related crops are grown together in same tract of land
[D] In Vertical farming , many systems such as aquaculture, sericulture, pisciculture and bee culture are altogether used for better use of land and resources
Show Answer
Correct Answer: A [Its a new method of agriculture in which crops are cultivated inside multi-storey buildings]
Notes:
Vertical farming is a greenhouse method of agriculture where commercially viable crops are cultivated inside multi-storey buildings in cities to simulate natural ecological systems. Using advanced greenhouse technology such as hydroponics and aeroponics, the skyscrapers could theoretically produce fish, poultry, fruit and vegetables. Since everything is ‘hydroponics’ in this practice, ie, in mineral solutions, the problems of soil erosion, pesticide toxicity are not there.
10. Which of the following places of the world is known for ‘Guano’, a uniquely-produced natural fertilizer which has a high concentration of nitrates?
[A] Tierra del Feugo
[B] Atacama desert
[C] Minas Gerais of Brazil
[D] Coastal headlands and Islands of Peru
Show Answer
Correct Answer: D [Coastal headlands and Islands of Peru]
Notes:
The word “guano” originates from the Quichua language of the Andes and means “the droppings of sea birds”. Andean peoples collected guano from the coast of Peru for use as soil enricher.
