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. Accession Tax is imposed on which type of receipt?
[A] New property acquired through purchase
[B] Gifts and bequests received over a lifetime
[C] Rented property income
[D] Business assets held by the deceased
Show Answer
Correct Answer: B [Gifts and bequests received over a lifetime]
Notes:
An accession tax is levied on individuals based on all gifts and inheritances received during their lifetime. The tax applies to the cumulative total rather than to the estate of the deceased. Accession tax rates generally increase as the total value of received gifts and bequests rises. This system differs from estate tax or inheritance tax models.
2. A transfer payment is a payment that is __:
[A] made by the government to its current workers
[B] made to people who are needy
[C] For in-kind services provided to the government
[D] For which no services or goods are rendered
Show Answer
Correct Answer: D [ For which no services or goods are rendered ]
Notes:
Transfer Payment is the payment exchanged for return of no goods or services. It generally describes the welfare expenditure of the government such as subsidies, pensions, grants etc.
3. Consider the following statements regarding the Global Hunger Index (GHI):
- The report is published annually by Concern Worldwide and Welthungerhilfe.
- Child stunting is one of the four indicators used to calculate GHI scores.
Which of the above statements is/are correct?
[A] Only 1
[B] Only 2
[C] Both 1 and 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: C [Both 1 and 2]
Notes:
Both statements are correct. The Global Hunger Index is published jointly by Concern Worldwide and Welthungerhilfe, with additional academic partners as of 2024. Its score is calculated using four indicators: undernourishment, child stunting, child wasting, and child mortality. Child stunting specifically refers to low height-for-age in children under five, reflecting chronic undernutrition.
4. Which of the following activities can help to reduce the government’s budget deficit?
- Implementation of Goods and Services Tax (GST)
- Rationalization of Subsidies
- Reduction in Income Tax
Select the correct option from codes given below:
[A] 1 & 2 Only
[B] 3 Only
[C] 2 & 3 Only
[D] 1, 2 & 3
Show Answer
Correct Answer: A [ 1 & 2 Only ]
Notes:
Implementation of Goods and Services Tax (GST) could help government raise tax revenues and reduce fiscal deficit. Fiscal deficit can be reduced by rationalizing subsidies in different sectors. Reduction in Income Tax will reduce government’s earnings and hence will increase budget deficit.
5. Which organization publishes the Inclusive Growth and Development Report?
[A] World Bank
[B] International Monetary Fund
[C] World Economic Forum
[D] Organisation for Economic Cooperation and Development
Show Answer
Correct Answer: C [World Economic Forum]
Notes:
The World Economic Forum publishes the Inclusive Growth and Development Report. The Inclusive Development Index was introduced with this report in 2017. The report evaluates economies using parameters like education, employment, labor compensation, and social protection. The World Economic Forum is headquartered in Geneva, Switzerland, and began the series under its System Initiative on Economic Growth and Social Inclusion.
6. Which industries mainly benefit from Mumbai Port in Maharashtra?
[A] Iron and Steel industry
[B] Sugar and Cotton textile industry
[C] Cotton textile and Petrochemical industry
[D] Engineering and Fertilizer industry
Show Answer
Correct Answer: C [Cotton textile and Petrochemical industry]
Notes:
Mumbai Port in Maharashtra is a major center for handling cotton, petroleum, oil, and petrochemical shipments. It serves as a key import point for long staple cotton and machinery for the cotton textile sector. The port’s specialized terminals handle large volumes of petrochemical products. Cotton textile and petrochemical industries have longstanding reliance on Mumbai Port for raw material and export requirements.
7. Which steel plant was not built during the 2nd Five Year Plan?
[A] Bhilai plant
[B] Salem plant
[C] Rourkela plant
[D] Durgapur plant
Show Answer
Correct Answer: B [Salem plant]
Notes:
Salem Steel Plant is located in Tamil Nadu. It was established in 1972 and commissioned in 1982. The Second Five Year Plan was from 1956 to 1961. Bhilai, Durgapur, and Rourkela steel plants were constructed during the Second Five Year Plan. Salem Steel Plant was not constructed during that period.
8. Which of these is considered a sunset industry?
[A] Hydrogen fuel technology
[B] Traditional film photography
[C] Renewable energy development
[D] Artificial intelligence
Show Answer
Correct Answer: B [Traditional film photography]
Notes:
Traditional film photography was popular throughout the 20th century before digital photography emerged. Digital cameras became widely available in the late 1990s. Global sales of film cameras dropped substantially after 2000. Companies like Kodak, once leading film producers, filed for bankruptcy in 2012. The industry decline is linked to the mass adoption of digital imaging technology worldwide.
9. Which among the following is not an instrument of fiscal policy?
[A] Taxation
[B] Public expenditure
[C] Public debt
[D] Credit Rationing
Show Answer
Correct Answer: D [Credit Rationing]
Notes:
The 3 main instruments of fiscal policy are government taxation and public expenditure and public debt. Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy.
10. Which of the following is included in market price?
[A] Indirect taxes
[B] Direct taxes
[C] Subsidies
[D] None of the above
Show Answer
Correct Answer: A [Indirect taxes]
Notes:
Market price(MP)refers to the actual transacted price and includes indirect taxes. The market price is the current price at which an asset or service can be bought or sold. The economic theory contends that the market price converges at a point where the forces of Supply and demand meet.
