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.
41. Which of the following refers to production?
[A] destruction of utility
[B] creation of utilities
[C] exchange value
[D] use of a product
Show Answer
Correct Answer: B [creation of utilities]
Notes:
Production means “creation of value-for-exchange utility.” It can create six types of utilities:
form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
42. To which market does the backward bending supply curve belong?
[A] Capital
[B] Labour
[C] Money
[D] Inventories
Show Answer
Correct Answer: C [Money]
Notes:
Sales cost are the expenses incurred on advertising, salesmanship, free sampling, free service, door to door promotion etc. Where the product is homogeneous there is no problem of selling under perfect competition. Under monopolistic competition where the product is differentiated, cost of sales is necessary to increase sales. They are incurred to persuade a buyer to buy a product in preference to another.
43. Why are taxes considered as certain as death?
[A] They are the major source of government revenue
[B] Government has no other revenue sources
[C] Most PSUs run inefficiently
[D] Government faces strict budget constraints
Show Answer
Correct Answer: A [They are the major source of government revenue]
Notes:
Benjamin Franklin stated, “In this world, nothing is certain except death and taxes.” Government revenue primarily comes from taxes. In several countries, including India and the US, tax collection forms the largest share of government income. In India for FY 2023, gross tax revenue was over ₹30 lakh crore, constituting most of the central government’s total receipts.
44. Which of the following is true about mixed economy?
[A] Existence of both developed and underdeveloped sectors
[B] Equal importance to agriculture and industry
[C] Existence of both public and private sectors in the national economy
[D] Equal partnership of central and states in economic planning and development
Show Answer
Correct Answer: C [Existence of both public and private sectors in the national economy]
Notes:
In a mixed economy, the private and public sectors go hand in hand. The government directs economic activity in some socially important sectors of the economy, leaving the rest to the price mechanism to operate.
45. Saubhagya Scheme was launched to provide the following?
[A] Water connections
[B] LPG connections
[C] Electricity connections
[D] Broadband connections
Show Answer
Correct Answer: C [Electricity connections]
Notes:
Pradhan Mantri Sahaj Bijli Har Ghar Yojana – ‘Saubhagya’ is a new scheme launched by Prime Minister Narendra Modi on September 25, 2017. Under this scheme, the government will provide free electricity to all households identified under the Socio-Economic and Caste Census (SECC). (Data 2011)
46. What is the main focus of the CBDT NUDGE campaign on undisclosed foreign assets?
[A] Aspects of black money generation, transfer abroad, and repatriation
[B] Codification of tax laws
[C] Concerns of foreign investors in India about taxation
[D] The entire structure of tax laws including bank tax imposition
Show Answer
Correct Answer: A [Aspects of black money generation, transfer abroad, and repatriation]
Notes:
The CBDT’s second NUDGE campaign was launched on November 28, 2025, focusing on high-risk cases where foreign assets were not reported in Assessment Year 2025-26 Income Tax Returns. Taxpayers were urged to revise returns by December 31, 2025, to avoid penalties under the Black Money Act, 2015. The first campaign in 2024 prompted 24,678 people to disclose ₹29,208 crore in assets and ₹1,090 crore in income.
47. The terms ‘Bull’ and ‘Bear’ are associated with________?
[A] Banking
[B] Foreign Trade
[C] Stock Market
[D] Internet Trade
Show Answer
Correct Answer: C [Stock Market
]
Notes:
The terms ‘bull’ and ‘bear’ describe upward and downward trends respectively in the stock market. A bear market refers to a decline in prices, usually for a period of a few months, in a single security or asset, group of securities or the securities market as a whole. A bull market is when prices are rising.
48. Which organization actually supervises the banks in maintaining the cash balance?
[A] State Bank of India
[B] Reserve Bank of India
[C] Grameen Bank of India
[D] None of these
Show Answer
Correct Answer: B [Reserve Bank of India]
Notes:
The Reserve Bank of India sees that banks maintain a minimum cash balance out of the deposits received by them. It monitors whether banks actually maintain cash balances. Similarly, it seems that banks give loans not only to profit making businesses and traders but also to small cultivators, small scale industries, small borrowers etc.
49. How does a parallel economy (black money) impact monetary policies?
[A] Makes the economy more competitive
[B] Makes the monetary policies less effective
[C] Ensures better distribution of income
[D] Increases productive investment
Show Answer
Correct Answer: B [Makes the monetary policies less effective]
Notes:
Unaccounted income from black money escapes official monitoring, reducing tax revenue and distorting fiscal statistics. This weakens the impact of monetary tools like interest rates and cash reserve ratio. Monetary policy transmission becomes unpredictable due to unreported transactions. Studies in 2022 indicated a significant parallel economy presence in India, affecting policy outcomes by circumventing regulated banking channels and complicating credit availability analysis.
50. Which state had the most foreign tourist visits in 2022?
[A] Tamil Nadu
[B] Maharashtra
[C] Gujarat
[D] Kerala
Show Answer
Correct Answer: C [Gujarat]
Notes:
Gujarat received the highest share of foreign tourist arrivals in India in 2022 at 20.17%. The Ministry of Tourism reported Gujarat surpassed Maharashtra in foreign tourist arrivals for the year. Maharashtra received 1.512 million foreign tourists, while Gujarat had a higher number. Overall foreign tourist arrivals in India in 2022 were 6.19 million.
