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. Rs. 100 notes are printed at which locations in India?
[A] Only Nashik and Dewas
[B] Mysore and Salboni only
[C] Noida and Hoshangabad
[D] All of the above locations
Show Answer
Correct Answer: D [All of the above locations]
Notes:
Currency notes of Rs. 100 are printed at four locations in India: Currency Note Press in Nashik (Maharashtra), Bank Note Press in Dewas (Madhya Pradesh), and Bharatiya Reserve Bank Note Mudran Ltd. presses in Mysore (Karnataka) and Salboni (West Bengal). Nashik and Dewas presses are operated by Security Printing and Minting Corporation of India Ltd. Mysore and Salboni presses are managed by BRBNMPL.
2. “Lockout” is term used for a work stoppage in industry for which of the following?
[A] Employees refuse to work
[B] Employer prevents employees from working
[C] Trade unions prevent the employees to work
[D] Employer close the work premises permanently
Show Answer
Correct Answer: B [Employer prevents employees from working]
Notes:
In the context of industry, a lockout is a temporary measure used by employers to prevent workers from entering the workplace. This is typically done in response to a labor dispute or strike, and is intended to protect the employer’s property and ensure the safety of workers and others on the premises. A lockout may be imposed by an employer unilaterally, or it may be agreed upon as part of a collective bargaining agreement with a labor union. During a lockout, workers are not allowed to enter the workplace or perform their duties, and the employer may not provide any work or pay to the affected workers. A lockout can have significant economic and social consequences for both the employer and the affected workers, and is generally considered a last resort in the resolution of labor disputes.
3. Which among the following body in India requires to protect the interests of consumers against anti-competitive practices of all market entities?
[A] National Consumer Forum
[B] Competition Commission of India
[C] National Consumer Disputes Redressal Commission
[D] Central Vigilance Commission
Show Answer
Correct Answer: B [Competition Commission of India]
Notes:
The Competition Commission of India (CCI) was set up to replace the anachronistic Monopolies and Restrictive Trade Practices Commission (MRTPC). It was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. It has one chairman and six members. It is the youngest and the only cross-sector regulator in India.
4. What was the nationality of Mahbub ul Haq, one of the pioneers of Human development theory and co-founder of the Human Development Report?
[A] Uk
[B] USA
[C] Pakistan
[D] India
Show Answer
Correct Answer: C [Pakistan]
Notes:
Human Development Report was first launched in 1990 by the Pakistani Economist Mahbub ul Haq and Indian Nobel laureate Amartya Sen.
5. Consider the following statements regarding Narrow Banking:
- In Narrow Banking, banks primarily accept deposits and invest largely in safe, liquid assets such as government securities, while avoiding risky activities including proprietary trading and complex derivatives.
- Asset-Liability Mismatch is rare in Narrow Banking because the liabilities are aligned with the risk and maturity characteristics of the assets.
Which of the above statements is / are correct?
[A] Only 1
[B] Both 1 and 2
[C] Only 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: B [Both 1 and 2]
Notes:
Statement 1 is correct because Narrow Banking limits banks to investing in liquid, safe assets, such as government securities, avoiding higher-risk strategies. Statement 2 is also correct since matching the maturity and risk of assets and liabilities reduces the possibility of asset-liability mismatches. Therefore, both statements correctly describe the essential features of Narrow Banking.
6. Which among the following agency is responsible for enforcement of Foreign Exchange Management Act 1999 and Prevention of money Laundering Act 2002 in India?
[A] Reserve Bank of India
[B] Department of Revenue
[C] Enforcement Directorate
[D] Income Tax Department
Show Answer
Correct Answer: C [Enforcement Directorate]
7. Which among the following correctly denotes the Primary Deficit?
[A] Revenue Expenditure – Revenue Receipts
[B] sum of the net increase in holdings of treasury bills of the RBI and its contributions to the market borrowing of the government.
[C] Budgetary Deficit + Govt. market borrowings and liabilities
[D] Fiscal Deficit – Interest Payments
Show Answer
Correct Answer: D [Fiscal Deficit – Interest Payments]
Notes:
The fiscal deficit may be decomposed into primary deficit and interest payment. The primary deficit is obtained by deducting interest payments from the fiscal deficit. Thus, primary deficit is equal to fiscal deficit less interest payments. It indicates the real position of the government finances as it excludes the interest burden of the loans taken in the past.
8. In India, Tank irrigation is more common in which of the following regions?
[A] Rocky plateu regions with uneven and highly seasonal rainfalls
[B] Regions with presence of perennial rivers and plenty of rainfall
[C] Arid and Semi Arid regions with scanty rainfallÂ
[D] Coastal regions with regular rainfallÂ
Show Answer
Correct Answer: A [Rocky plateu regions with uneven and highly seasonal rainfalls]
Notes:
The Tank irrigation is more in the rocky plateau area of the county, where the rainfall is uneven and highly seasonal. The Eastern Madhya Pradesh, Chhattisgarh, Orissa, Interiors of Tamil Nadu and some parts of Andhra Pradesh have more land under tank irrigation.
9. What relationship does the Laffer Curve show between tax rates and tax revenue?
[A] Tax revenue increases continuously as tax rates rise
[B] Tax revenue increases then decreases after an optimal tax rate
[C] Tax revenue decreases continuously as tax rates rise
[D] Tax revenue remains constant at all tax rates
Show Answer
Correct Answer: B [Tax revenue increases then decreases after an optimal tax rate]
Notes:
The Laffer Curve was developed by economist Arthur Laffer in 1974. It illustrates that government tax revenue increases with higher tax rates up to a specific optimal point. Beyond this optimal rate, further increases in the tax rate lead to a decline in revenue due to reduced economic activity and shrinking tax base. The precise optimal rate is not fixed and varies by country and economy.
10. Which among the following is NOT a money market instrument?
[A] Cash Management Bill
[B] Certificate of Deposit
[C] Commercial Paper
[D] Debenture
Show Answer
Correct Answer: D [ Debenture ]
Notes:
A debenture is a long-term debt instrument used by corporations and governments to raise capital, typically with a maturity of more than one year. In contrast, money market instruments, such as Cash Management Bills, Certificates of Deposit, and Commercial Papers, are short-term financial instruments with maturities of one year or less. Money market instruments are characterized by high liquidity and low risk, while debentures are considered capital market instruments.
