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. For which of the following the term “Paper Gold” is used?
[A] United States Dollar
[B] Gold Reserved with International Monetary Fund
[C] United States Dollar
[D] Special Drawing Rights
Show Answer
Correct Answer: D [Special Drawing Rights]
Notes:
SDRs of the International Monetary Funds are also called Paper Gold. They are allotted to member countries by IMF and cannot be used by private parties. They are supplementary to Forex reserves.
2. Which among the following are called “Breton Wood Twins”?
[A] IBRD & IMF
[B] IDA & IFC
[C] IDA & MIGA
[D] IMF & IDA
Show Answer
Correct Answer: A [IBRD & IMF]
Notes:
The planners at Breton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group
3. When a loan provided by a group of lenders and is structured, arranged, and administered by one or several commercial or investment banks, it is called as __?
[A] Loan shark
[B] Loan Syndication
[C] Loan covenant
[D] Package loan
Show Answer
Correct Answer: B [Loan Syndication]
Notes:
Loan syndication is the process which involves a group of lenders to fund various portions of a loan for a single borrower. Loan syndication most often used when a borrower requires a large quantum of funds which generally cannot be lent by a single lender.
4. 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.
5. The Ad Valorem Tax is applied on which among the following?
[A] The price of commodity
[B] The value added
[C] The advertisement expenditure
[D] The unit of the commodity
Show Answer
Correct Answer: A [The price of commodity]
Notes:
The Ad Valorem Tax is a tax based on the value of a transaction or property. It is commonly applied to the price of commodities, meaning the tax amount varies with the price. For example, property taxes and sales taxes are often ad valorem, calculated as a percentage of the assessed value or sale price. This method contrasts with specific taxes, which are fixed amounts per unit regardless of value.
6. Which among the following bank had issued first successful Credit Card of the world?
[A] Bank of America
[B] Standard Chartered Bank
[C] CitiBank
[D] ANZ Grindlays Bank
Show Answer
Correct Answer: A [Bank of America]
Notes:
The first successful credit card was issued by Bank of America in 1950. It was called the “BankAmericard,” which later evolved into Visa. This innovation revolutionized consumer credit and payment systems, paving the way for modern credit cards.
7. A Banking Ombudsman will not entertain Credit Card complaints which are more than _______old.
[A] 3 months
[B] 6 months
[C] 9months
[D] 12 months
Show Answer
Correct Answer: D [12 months]
Notes:
The correct answer is 1 year (12 months). According to the Banking Ombudsman Scheme, complaints regarding credit cards must be filed within one year from the date of the transaction or the event leading to the complaint. This time limit ensures timely resolution and encourages consumers to report issues promptly. The Banking Ombudsman is a quasi-judicial authority established by the Reserve Bank of India to address customer grievances in the banking sector.
8. Consider the following statements in context with the Cash Management Bills:
- Cash Management Bills are a kind of short term money market instruments with maturity less than 91 days
- Cash Management Bills are issued on discount
- Cash Management Bills are introduced only by Central Government
Which among the above statements is/ are correct?
[A] Only 1 is correct
[B] Only 1 & 2 are correct
[C] all are correct
[D] Only 2 & 3 are correct
Show Answer
Correct Answer: C [all are correct]
Notes:
The Government of India, in consultation with the Reserve Bank of India, finalized and introduced a new short-term instrument, known as Cash Management Bills, to meet the temporary cash flow mismatches of the Government. The Cash Management Bills are non-standard, discounted instruments issued for maturities less than 91 days and could be issued as and when need arises
9. Which among the following is the core method of stabilizing the markets under the Market Stabilisation Scheme (MSS) ?
[A] Issuing Treasury Bills and/ or dated securities
[B] Purchasing Treasury Bills and/ or dated securities
[C] Conducting Open Market Operations
[D] All the above
Show Answer
Correct Answer: B [Purchasing Treasury Bills and/ or dated securities]
Notes:
The core method of stabilizing markets under the Market Stabilisation Scheme (MSS) is purchasing Treasury Bills and/or dated securities. The MSS was introduced by the Reserve Bank of India in 2004 to manage liquidity and stabilize the rupee. By purchasing securities, the RBI absorbs excess liquidity, helping to control inflation and stabilize the currency. This method is crucial for maintaining economic stability, especially during periods of volatility.
10. With reference to the financial markets, the Interval Funds are those fund which __:
[A] provide capital appreciation over the medium to long-term
[B] invest half of money in stock market and half in commodity market
[C] combine the features of open-ended and close-ended schemes
[D] provide both growth and regular income
Show Answer
Correct Answer: C [ combine the features of open-ended and close-ended schemes ]
Notes:
Interval funds combine the features of open-ended and close-ended schemes. Theyare open for sale or redemption during pre-determined intervals at NAV related prices.
