Indian Economy MCQs
Indian Economy Multiple Choice Questions (MCQs) for State and UPSC Civil Services Examinations. Objective Questions on Indian Economy for competitive examinations.
1. “A statement of estimated receipts and expenditures called annual Financial Statement (Budget) has to be placed before parliament for each financial year.”
The above provision has been enshrined in which among the following articles of Constitution of India?
[A] Article 110
[B] Article 111
[C] Article 112
[D] Article 113
Show Answer
Correct Answer: C [Article 112]
Notes:
Article 112 of the Indian Constitution says that every year “the President of India shall cause to be laid before both the houses of the parliament” the “Annual Financial Statement”. This is popularly known as Budget. “cause to be laid” here means that the person through whom President acts, is Finance Minister of the country, who is known as the custodian of the nation’s Finances. The Budget gives the complete picture of the estimated receipts and expenditures of the Government of India for that year. This picture is actually based upon the budget figures of the previous years.
2. “Bad money (if not limited in quantity) drives good money out of circulation”. Which law in economics says this?
[A] Keynes’ law
[B] Wagner’s law
[C] Gresham’s law
[D] Grimm’s law
Show Answer
Correct Answer: C [Gresham’s law]
Notes:
Gresham’s law states that “bad money drives out good”. For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation.
3. Which among the following is a suitable term for the state of economy in which economic activity is slowing down but wages and prices continue to rise ?
[A] Inflation
[B] Deflation
[C] Skweflation
[D] Stagflation
Show Answer
Correct Answer: D [Stagflation]
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
4. The main objectives of Minimum Support Prices is / are
- Check fall in price beyond a limit
- Protect interest of the consumers
- Make procurement from the wholesalers easy
Choose the correct option:
[A] Only 1
[B] Only 1 & 2
[C] Only 2 & 3
[D] 1, 2 & 3
Show Answer
Correct Answer: A [Only 1]
Notes:
Minimum support price (MSP) is fixed by the Government, as a minimum price for crops procured from the farmers. It was introduced to prevent the price of the crops from falling beyond a limit, which will affect the income of the farmers.
5. Which among the following committees recommended the merger of Regional Rural Banks with their respective Sponsor Banks?
[A] Narsimhamam Committee
[B] Khusro Committee
[C] C Rang rajan Committee
[D] Dutt Committee
Show Answer
Correct Answer: B [Khusro Committee]
Notes:
The Agricultural Credit Review Committee (Khusro Committee), 1989 recommended the merger of Regional Rural Banks with their respective Sponsor Banks. It highlighted the weakness of RRBs and their non-viability.
6. In which year UTI was split into UTI-I and UTI-II?
[A] 2000
[B] 2001
[C] 2002
[D] 2003
Show Answer
Correct Answer: D [2003]
Notes:
In the year 2003, the country’s then largest AMC – Unit Trust of India was intervened by the Government for a Bail Out Package. It was split into two entities – UTI 1 and UTI 2.
7. 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]
8. Which among the following has been adopted by the Tendulakar committee for measuring poverty?
[A] Welfare measures
[B] Cost of Living
[C] Inequality & growth
[D] mobility/vulnerability analyses
Show Answer
Correct Answer: B [Cost of Living]
9. In context of banking what is PCR?
[A] Profit Credit Ratio
[B] Provision Credit Ratio
[C] Provision coverage ratio
[D] Profit Coverage Ratio
Show Answer
Correct Answer: C [Provision coverage ratio]
10. The unemployment of a person when he/ she is in midst of transiting between jobs, searching for new job comes under the which of the following category?
[A] Cyclical
[B] Voluntary
[C] Frictional
[D] Seasonal
Show Answer
Correct Answer: C [Frictional]
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