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. Expenditures of the central government on flagship development programmes comes under which of the following?
[A] Plan expenditures
[B] Non Plan expenditures
[C] Revenue expenditures
[D] Capital expenditures
Show Answer
Correct Answer: A [Plan expenditures]
Notes:
Plan expenditures refer to the money that is spent by a government or other organization on specific plans or projects. These plans or projects are typically designed to achieve specific goals or objectives, and the plan expenditures are used to fund the activities and operations associated with implementing those plans.
3. The minimum support prices (MSP) for major agricultural products are fixed by the government, each year, after taking into account the recommendations of which of the following organizations?
[A] Planning Commission of India
[B] Finance Commission of India
[C] Farmer’s Commission of India
[D] Commission for Agricultural Costs and Prices
Show Answer
Correct Answer: D [Commission for Agricultural Costs and Prices]
Notes:
The Commission for Agricultural Costs and Prices (CACP) is a body set up by the Government of India to recommend the minimum support prices (MSPs) for various agricultural commodities. The CACP takes into account a number of factors, including the cost of production, changes in input prices, and demand and supply conditions in the market, in order to arrive at its recommendations for MSPs. These recommendations are then used by the government to set the MSPs for various crops.
4. Euribor is a term associated with which of the following?
[A] An International Financial Company
[B] An association of European Financial Service providers
[C] A reference rate for Euro Money Market
[D] A credit rating agency of Europe
Show Answer
Correct Answer: C [A reference rate for Euro Money Market]
Notes:
Euribor (Euro Interbank Offered Rate )is similar to LIBOR (London Interbank Offer rate)
5. Consider the following institutions:
- International Monetary Fund
- World Bank
- World Trade Organization
- US Treasury Department
- US Federal Bank
Which among the above institutions were a part of Washington Consensus?
[A] 1 & 2
[B] 1, 2 & 3
[C] 1, 2 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: C [1, 2 & 4]
Notes:
The Washington Consensus refers to a set of economic policy prescriptions for developing countries, primarily focused on market-oriented reforms. It was formulated in the late 1980s and emphasizes trade liberalization, deregulation, and privatization. While the International Monetary Fund (IMF) and the World Bank are often associated with the Consensus due to their roles in providing financial assistance and policy advice, the World Trade Organization does not embody the trade liberalization aspect central to the Consensus. The US Treasury Department and the US Federal Bank are not a part of the Washington Consensus framework.
6. Which among the following banks assist and coordinate in selling of the State Development Loans (SDLs) in India?
[A] RBI
[B] SBI
[C] IDBI
[D] Scheduled Commercial Banks
Show Answer
Correct Answer: A [RBI]
Notes:
State Development Loans (SDLs) are market borrowings by state governments. RBI co-ordinates the actual process of selling these securities
7. The calculations of “Cultural command area ” are used in which among the following?
[A] Preparation of a Land Development Plan
[B] Designing an Irrigation Plan
[C] Prepare a plan for new crops introduction
[D] Design the agricultural policy
Show Answer
Correct Answer: B [Designing an Irrigation Plan]
8. Which statement best describes the term “Transfer Pricing” that India is contending with?
[A] It is a tax evasion method involving illicit capital flows out of the country
[B] It is a factor causing the continuous rise in food prices in India
[C] It is a recent phenomenon resulting in the bad loans of Indian banks
[D] It is a global phenomenon causing the devaluation of the Indian currency against reserve currencies
Show Answer
Correct Answer: A [It is a tax evasion method involving illicit capital flows out of the country]
Notes:
Transfer pricing refers to the pricing of goods or services within a multinational corporation or group. These transactions may not be influenced by market forces that typically shape relations between individual firms. This system allows for a possible method of tax evasion, where one party transfers goods or services to another for a specific price, often facilitating illicit capital flows out of the country.
9. Consider the following statements:
1. In comparison to other products, stocks markets offer higher returns and pose higher risks
2. Stock prices are governed by supply and demand
Which among the above is / are correct statements?
[A] Only 1
[B] Only 2
[C] Both 1 & 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: C [ Both 1 & 2 ]
Notes:
Historically, investors earned higher returns from stocks than from other products. As return and risk are correlated, they were also exposed to higher risks. To absorb this risk, you need superior analytical skills, deeper pockets to diversify across the market and essentially, the right attitude to book losses or profits. Intelligent investing in stocks is therefore, never easy. You can buy stocks either in the primary market or in the secondary market. You need to be doubly sure that you are investing in a fundamentally sound company before writing the cheque for an IPO. Buying shares in secondary market can be done only through a registered broker or a sub-broker. Stock markets are places where buyers and sellers of stock meet to trade. The NSE and BSE is the most important exchanges in India. Stock prices change according to supply and demand. There are many factors influencing prices, the most important being earnings. There is no consensus as to why stock prices move the way they do.
10. In share market parlance, a shareholder who has “Golden share” is the one who
[A] has special voting rights and ability to block key strategic decisions
[B] has earned maximum fraction of profit on price rise in share market
[C] has sold all his shares just before a market crash
[D] is the first subscriber of shares during IPO
Show Answer
Correct Answer: A [has special voting rights and ability to block key strategic decisions]
Notes:
Golden share means a type of share that gives special voting rights and the ability to block key strategic decisions, especially takeovers by other shareholders. It generally refers to more than 50% shares being with one individual or entity.
