Indian Economy MCQs
Indian Economy Multiple Choice Questions (MCQs) for State and UPSC Civil Services Examinations. Objective Questions on Indian Economy for competitive examinations.
21. Which of the following bodies approves the Fair and Remunerative Price of Sugarcane?
[A] Cabinet Committee on Economic Affairs
[B] Commission for Agricultural Costs and Prices
[C] Directorate of Marketing and Inspection, Ministry of Agriculture
[D] Agricultural Produce Marketing Committee
Show Answer
Correct Answer: A [ Cabinet Committee on Economic Affairs ]
Notes:
Approval comes from Cabinet Committee on Economic Affairs (CCEA). The FRP is the minimum price that sugarcane farmers are legally guaranteed
22. With respect to the upstream and downstream industries in Food Processing Units, which of the following observations is / are correct?
- While farmers are parts of upstream industry, collection centres are part of downstream industry
- Initial processing of food material is done in downstream industries
Select the correct option from the codes given below:
[A] Only 1
[B] Only 2
[C] Both 1 & 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: D [ Neither 1 nor 2 ]
Notes:
Both the statements are incorrect in this question. The upstream Industries aim at initial processing of Agricultural commodities, whereas Downstream Industries aim at manufacturing operations on intermediate products made from agricultural materials. Both farmers and collection centres are part of upstream industry.
23. Consider the following observations:
1. The Indian Capital Market deals in both primary and secondary securities
2. The Indian Capital Market allows businesses to raise both short term and long-term funds
Which among the above statements is / are correct ?
[A] Only 1
[B] Only 2
[C] Both 1 & 2
[D] Neither 1 nor 2
Show Answer
Correct Answer: A [ Only 1 ]
Notes:
First statement is correct. Second statement is incorrect. Short Term Funds – Indian Money Market, Medium and Long Term Funds- Indian Capital Market.
24. The basic WTO principle with reference to trade barriers is that:
[A] Trade barriers can be imposed by any country that believes it will benefit from such trade barriers
[B] Trade Barriers should be lowered equally and without discrimination for all member countries
[C] Trade Barriers can be imposed if a majority of the members of the WTO agree
[D] Trade Barriers should be the same in all member countries so that the result is equivalent to free trade
Show Answer
Correct Answer: B [ Trade Barriers should be lowered equally and without discrimination for all member countries ]
Notes:
25. The two presses of Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) are located at:
[A] Mysore and Salboni
[B] Nashik and Dewas
[C] Mysore and Dewas
[D] Mumbai and Kolkata
Show Answer
Correct Answer: A [ Mysore and Salboni ]
Notes:
The two presses of Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) are located at Mysore and Salboni.
26. Which of the following statements is correct about the Countervailing duty?
[A] It is the tariff levied on imported goods to offset subsidies offered by the exporting country to its producers
[B] It is the tariff imposed on exported goods to reduce exports and increase the domestic supply
[C] It is the tax levied on revenues received by a corporation, even if it does not make any profit
[D] It is the tax levied on purchase or sale of various financial products like stocks, derivatives, mutual funds etc
Show Answer
Correct Answer: A [ It is the tariff levied on imported goods to offset subsidies offered by the exporting country to its producers ]
Notes:
First option is the correct answer
Countervailing duty is a tariff imposed on imported goods to offset the subsidies offered by the exporting country to its producers. It is imposed to provide level playing field to domestic producers and foreign producers.
27. Consider the following bodies:
1. Coffee Board of India
2. Tea Board, India
3. Rubber Board of India
4. Coconut Development Board
Which among the above are statutory bodies?
[A] Only 1 & 2
[B] Only 1, 2 & 3
[C] Only 2, 3 & 4
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [1, 2, 3 & 4]
Notes:
The present Tea Board set up under section 4 of the Tea Act 1953 was constituted on 1st April 1954. Coffee Board was established through Coffee Act VII of 1942. Rubber Board was established under the Rubber Act 1947. Coconut Development Board was established under Coconut Development Board Act 1979.
28. What is perfectly inelastic demand?
[A] Demand doesn’t change with price
[B] Demand change with price
[C] Change in demand is equal to price
[D] Demand changes infinitely
Show Answer
Correct Answer: A [Demand doesn’t change with price]
Notes:
Price elasticity = 0, Perfectly inelastic- Demand does not change as price changes
Price elasticity < 1, less than unit elastic- % change in demand is less than that in price
Price elasticity = 1, Unit elastic – % change in demand is equal that in price
Price elasticity > 1, more than unit elastic – % change in demand is more than that in price
Price elasticity = ∞ , Perfectly elastic Demand changes infinitely
29. Which among the following is an example of substitute goods?
[A] Milk and Coffee
[B] Pen and Paper
[C] Ink and Pen
[D] Tea and coffee
Show Answer
Correct Answer: D [Tea and coffee]
Notes:
Substitution Effect refers to the substitution of the commodity in place of other commodity when it becomes relatively cheaper. In the given question if the price of Coffee increases, Tea can replace it.
30. What does Public sector in an economy means?
[A] That which is owned by community
[B] That which is owned by public
[C] That which is owned by government
[D] Both a and b
Show Answer
Correct Answer: C [That which is owned by government]
Notes:
The Public Sector in an economy is that which are owned and operated by the government and exist to provide services for its citizens. They are government-owned and government-controlled and doest exist to generate profits.
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