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. Why the Transfer incomes are not included in the national income accounts?
[A] They do not represent payment for economic activity
[B] There is now way of calculating them correctly
[C] They are already included in the total of personal income
[D] They are already included in company earnings
Show Answer
Correct Answer: A [They do not represent payment for economic activity]
Notes:
Transfer payments made by the Government including subsidies, government aid, social security assistance such as health insurance payment and scholarship are not included in the national income. Because they do not represent any economic activity.
2. Which among the following revolutions is related to ‘fertilizers’?
[A] Silver Revolution
[B] Grey Revolution
[C] Golden Revolution
[D] Pink Revolution
Show Answer
Correct Answer: B [Grey Revolution]
Notes:
Green Revolution- Food grains,
White Revolution Milk,
Yellow Revolution-Oil seeds,
Blue Revolution-Fisheries
Golden Revolution-Fruits;
Silver Revolution-Eggs,
Round Revolution Potato,
Pink Revolution-Meat,
Grey Revolution (Fertilizers)
3. At which of the following places steam engines were originally manufactured by India Railway ?
[A] Varanasi
[B] Perambur
[C] Chittranjan
[D] Patiala
Show Answer
Correct Answer: C [Chittranjan]
Notes:
The first steam locomotive produced by Chittaranjan Locomotive Works (CLW) was dedicated to the nation on November 1, 1950. This significant event coincided with the renaming of the Loco Building Works as Chittaranjan Locomotive Works, in honor of the freedom fighter, leader, and statesman Deshbandhu Chittaranjan Das. The dedication ceremony was conducted by the first President of India, Dr. Rajendra Prasad. This marked an important milestone in the history of CLW, establishing it as a key manufacturer in India’s locomotive industry. The production of steam locomotives commenced earlier on January 26, 1950, and over the years, CLW evolved to become the largest locomotive manufacturer in the world.
4. Which body recommends Minimum Support Prices to the Government of India?
[A] Ministry of Agriculture and Farmers Welfare
[B] Cabinet Committee on Economic Affairs
[C] State Governments
[D] Commission for Agricultural Costs and Prices (CACP)
Show Answer
Correct Answer: D [Commission for Agricultural Costs and Prices (CACP)]
Notes:
The Commission for Agricultural Costs and Prices (CACP) was established in January 1965 as the Agricultural Prices Commission and renamed CACP in 1985. CACP functions as an attached office under the Ministry of Agriculture and Farmers Welfare. CACP annually recommends MSPs for 22-23 crops to the government. Its recommendations consider factors such as production costs, market prices, and inter-crop price parity.
5. What are low-priced, speculative, high-risk stocks commonly called?
[A] Green Stock
[B] Penny Stock
[C] Concentrated Stock
[D] Microcap Stock
Show Answer
Correct Answer: B [Penny Stock]
Notes:
Penny stocks are shares of small companies usually trading below $5 per share. These stocks have low liquidity and high volatility and generally trade on over-the-counter (OTC) markets. Penny stocks are not listed on major exchanges. Regulatory oversight for penny stocks is reduced compared to larger stocks. Most penny stocks have limited trading volume and minimal analyst coverage.
6. Which of the following indicates a Liquidity trap?
[A] expansionary monetary policy does not encourage economic growth
[B] open market operations results in decrease in interest rates
[C] government prefers fiscal policies over monetary policies to regulate the money supply
[D] government undergoes liquidation of the government holdings on larger-scale to reduce fiscal deficit
Show Answer
Correct Answer: A [ expansionary monetary policy does not encourage economic growth ]
Notes:
Liquidity trap is a situation when expansionary monetary policy does not increase the interest rate, income and hence does not encourage the economic growth.
7. Which was NOT a stipulated target in the FRBM Act, 2003?
[A] Elimination of revenue deficit
[B] Reduction of fiscal deficit to 3% of GDP
[C] Limiting government guarantees to 0.5% of GDP
[D] Complete elimination of primary deficit
Show Answer
Correct Answer: D [Complete elimination of primary deficit]
Notes:
The FRBM Act, 2003 mandated elimination of revenue deficit, reduction of fiscal deficit to 3% of GDP, and limitation of government guarantees. The Act did not stipulate complete elimination of the primary deficit as a statutory target. The focus was on fiscal and revenue deficit reduction. The 2018 amendment revised several targets but did not mandate elimination of the primary deficit as a statutory requirement.
8. If a company has “Trade Receivables”, this implies that __:
[A] It has made a sale but yet to collect payments
[B] It has received payments but yet to make a delivery
[C] It has received an order but yet to make delivery
[D] None of the above is a correct definition
Show Answer
Correct Answer: A [ It has made a sale but yet to collect payments ]
Notes:
If a company has receivables, this means it has made a sale but has yet to collect the money from the purchaser.
9. Consider the following places:
- Mumbai
- Hyderabad
- Kolkata
- Noida
Which of the above are known for coin minting in India?
[A] 1, 2 & 3 Only
[B] 2 & 4 Only
[C] 2, 3 & 4 Only
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [ 1, 2, 3 & 4 ]
Notes:
SPMCIL comprises four mints: India Government Mint in Mumbai, Hyderabad, Kolkata and Noida.
10. Consider the following statements regarding the Asian Infrastructure Investment Bank (AIIB):
- India participated in the founding of the bank and signed the Memorandum of Understanding in October 2014.
- The headquarters of the AIIB are located in Beijing, China, specifically at the Asia Financial Center in the Olympic Forest Park area.
- The AIIB currently has over 100 member states from around the world.
Which of the above statements is/are correct?
[A] Only 1
[B] 1 and 2 only
[C] 2 and 3 only
[D] 1, 2 and 3
Show Answer
Correct Answer: D [1, 2 and 3]
Notes:
All three statements are correct. India was among the founding members of the AIIB and signed the MoU in October 2014. The bank’s headquarters are indeed located in Beijing’s Asia Financial Center in the Olympic Forest Park area. As of now, AIIB has 111 members (including prospective members) from different continents, confirming it has over 100 member states.
