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Indian economy MCQs-Top 62 Indian Economy Questions(UPSC&APSC)




     Indian Economy Questions For UPSC Aspirants


1.    The decimal system of Indian Currency was started in

1)    1950

2)    1955

3)    1957

4)    1960

Ans: 3) 1957

 

2. Antyodaya Programme is associated with

1)    Liberation of bonded labour

2)    Bringing up cultural revolution in India

3)    Demands of textile labourers

4)    Upliftment of the poorest of the poor

Ans: 4) Upliftment of the poorest of the poor

 

3. Which of the following is not a necessary condition for the development of India?

1)    Capital accumulation

2)    Resource discovery

3)    Population growth

4)    Technological development

Ans: 3) Population growth

 

4. The Indian Economy can be most appropriately described as a:

1)    Capitalist economy

2)    Socialist economy

3)    Traditional economy

4)    Mixed economy

Ans: 4) Mixed economy

 

 

5. NABARD’s primary role is

1)    To provide term loans to state co-operative banks

2)    To assist state governments

3)    To act as re-finance institution

4)    All of the above

Ans: 4) All of the above

 

6. Which authority recommends the principles governing the grants-in-aid of the revenues of the states out of the consolidated Fund of India?

1)    Public Accounts Committee

2)    Union Ministry of Finance

3)    Finance Commission

4)    Inter-State Council

Ans: 3) Finance Commission

 

7. RBI does not transact the business of which of the following state governments

1)    Nagaland

2)    Assam

3)    J & K

4)    Rajasthan

Ans: 3) J & K

 

8. Which amidst the following banks was recently converted to a “Universal Bank”?

1)    Corporation Bank

2)    Bank of Baroda

3)    IDBI Bank

4)    Canara Bank

Ans: 3) IDBI Bank

 

9.The symbol of Reserve Bank of India is:

1)    Capital of Ashokan Pillar

2)    Kuber with a purse of money

3)    Tiger before a palm tree

4)    A dog sitting in a defensive state

Ans: 3) Tiger before a palm tree

 

10. For whom was the first department life insurance started?

1)    Army

2)    Civil officers of Central Government

3)    Employees of postal department

4)    Life insurance Corporation

Ans: 3) Employees of postal department

 

11. The main source of revenue for a State government in India is

1)    Sales Tax

2)    Excise Duty

3)    Income Tax

4)    Property Tax

Ans: 1) Sales Tax

 

12. To achieve high rates of growth of national output, the economy has to

1)    Reduce the rate of growth of population

2)    Borrow foreign capital

3)    Step up the rate of savings

4)    Increase the rate of investment and reduce the capital output ratio

Ans: 4) Increase the rate of investment and reduce the capital output ratio

 

 

      13. The proceeds of income tax go to

1)    Central Government

2)    State

3)    Centre and State

4)    Corporation authorities

Ans: 3) Centre and State

 

14.National Income refers to

1)    Money value to goods and services produced in a country during a year.

2)    Money value of stocks and shares of a country during a year

3)    Money value of capital goods produced by a country during a year

4)    Money value of consumer goods produced by a country during a year.

Ans: 3) Money value of capital goods produced by a country during a year

 

15. A scheduled bank is one which

1)    II Schedule of banking regulation Act

2)    II Schedule of Constitution

3)    II Schedule of REserve Bank of India

4)    None of the above

Ans: 3) II Schedule of REserve Bank of India

 

16. What is the purpose of India Brand Equity Fund?

1)    To promote inbound tourism

2)    To make “Make in India” a label of quality

3)    To organise trade fairs

4)    To provide venture capital to IT sector

Ans: 2) To make “Make in India” a label of quality

 

17. What are “open market operations”?

1)    Activities of SEBI registered brokers

2)    Selling of currency by the RBI

3)    Selling of gilt-edged securities by the government.

4)    Sales of shares by FIIs.

Ans: 3) Selling of gilt-edged securities by the government.

 

18. How does the consumer benefit from VAT?

1)    It removes tax on tax and hence reduces price rise

2)    It reduces the cost of production

3)    It abolishes the sales tax

4)    Due to the exemption of small businesses from the tax within certain limits prescribed by the state.

Ans: 1) It removes tax on tax and hence reduces price rise

 

19. In estimating the budgetary deficit , the official approach in India is to exclude

1)    Long term borrowing from the market

2)    Borrowings from the RBI

3)    Drawing down of the cash balance

4)    Borrowing from the Reserve Bank in the form of ways and means advance.

Ans: 3) Drawing down of the cash balance

 

20. The best way the banks can avoid balance is by:

1)    Lend only to individuals known to the bank

2)    Accept sound collateral

3)    Give only short term loans

4)    Lend only to the bank's old customer.

Ans: 2) Accept sound collateral

 

21. Which of the following is an open market operation of the Reserve Bank of India?

1)    Buying and selling of shares

2)    Trading in securities

3)    Transaction in gold

4)    Lending to commercial banks

Ans: 2) Trading in securities

 

22. During which five year plan did India lay down the objectives of the need to ensure environmental sustainability of the development strategy?

1)    6th Five year plan

2)    7th Five year plan

3)    8th Five year plan

4)    9th Five year plan

Ans: 4) 9th Five year plan

 

23. Which of the following is not an objective of the monetary policy of the Reserve Bank of India?

1)    Boost economic development

2)    Direct credit in desirable direction

3)    Control inflationary pressure

4)    Ensure social justice

Ans: 4) Ensure social justice

 

24. Merchant Banking is an institution which provide finances to:

1)    Domestic wholesale trade

2)    International trade among countries

3)    Domestic retail trading

4)    International aid agencies

Ans: 2) International trade among countries

 

25. The system of issuing and monitoring of money in the market is called:

1)    Proportional reserve ratio

2)    Fixed reserve ratio

3)    Minimum reserve ratio

4)    Floating reserve ratio.

Ans: 3) Minimum reserve ratio

 

26. The Government of India made it obligatory on the part of all commercial banks that they should give some cash amount while purchasing Government bonds. What is this called?

1)    Statutory Liquidity Ratio

2)    Cash Reserve Ratio

3)    Minimum Reserve Ratio

4)    Floating Reserve Ratio

Ans: 1) Statutory Liquidity Ratio

 

27.The receipts of which of the following taxes/ duties are not shared with the states?

1)    Tax on income except agriculture

2)    Corporation tax

3)    Surcharge on income tax

4)    Capital gain tax

Ans: 1) Tax on income except agriculture

 

28. The national income of the country is:

1)    Government annual revenue

2)    Total productive revenue

3)    Surplus of the public sector enterprises

4)    Export (loan)- import

Ans: 2) Total productive revenue

 

29. Inflation is caused by:

1)    Increase in supply of goods

2)    Increase in cash of the government

3)    Decrease in money supply

4)    Increase in money supply

Ans: 4) Increase in money supply

 

30. Which of the following options is not true when the interest rate in the country goes up?

1)    Savings increases

2)    Lending decreases

3)    Cost of production increases

4)    Return on capital increases

Ans: 4) Return on capital increases

 

31. Which of the following acts as the controller of credit in India?

1)    The central government

2)    The Reserve Bank of India

3)    The State Bank of India

4)    The Planning Commission

Ans: 2) The Reserve Bank of India

 

32. When did the rupee become a freely convertible currency in India?

1)    2000

2)    2001

3)    1994

4)    1999

Ans: 3) 1994

 

33. The government resorts to deflation of its currency in order to promote

1)    National income

2)    International goodwill

3)    Exports

4)    Savings

Ans: 3) Exports

 

34. The basic regulatory authority for mutual funds and stock market lies with the

1)    Government of India

2)    Reserve Bank of India

3)    SEBI

4)    Stock Exchange of India

Ans: 3) SEBI

 

35. What is the function of the Central Statistical Organisation (CSO)?

1)    Determination of money supply

2)    Collection of estimates of the national income

3)    Collection of detail data regarding employment

4)    Price determination

Ans: 2) Collection of estimates of the national income

 

36. Planning and control are so related that

1)    Planning initiates control

2)    Control initiates planning

3)    Both are equivalent

4)    Both go simultaneously in cycle

Ans: 4) Both go simultaneously in cycle

 

37. Which of the following taxes is levied by the Union and appropriated and planned by the state?

1)    Service tax

2)    Stamp duty

3)    Property tax

4)    Passenger and freight duty

Ans: 2) Stamp duty

 

38. Which of the following taxes belong to the Central Taxes?

1)    Excise duty, Sales Tax, Customs duty

2)    Excise duty, Customs duty and Income Tax

3)    Income Tax, Customs duty and House Tax

4)    Customs duty, Entertainment Tax, Income Tax

Ans: 2) Excise duty, Customs duty and Income Tax

 

39. What is the name of the electronic communication network of the Reserve Bank of India?

1)    BOLT

2)    RBISAT

3)    RBINET

4)    RBIDOT

Ans: 3) RBINET

 

40.The famous slogan “GARIBI HATAO” (Remove Poverty) was launched during the

1)    First five year plan (1951-56)

2)    Third  five year plan (1961-66)

3)    Fourth Five Year Plan (1964-66)

4)    Fifth Five Year Plan (1974-79)

Ans: 4) Fifth Five Year Plan (1974-79)


Indian Economy Questions For UPSC Aspirants


 1.    Which of the following most closely approximates our definition of OLIGOPOLY?

      1) The cigarette industry

      2)  The barber shops

      3) The gasoline stations

      4)  Wheat farmers

            Ans: 1) The cigarette industry

  

2.    One of the essential conditions of perfect competition is

      1) Product differentiation

      2) multiplicity of prices for identical products at any one time

      3) many sellers and a few buyers

      4) only one price for identical goods at any one time.

            Ans: 4) only one price for identical goods at any one time.

  

3.    When there is a change in demand leading to a shift in the demand curve to the right , at the same price as before, the quantity demanded will

      1) decrease

      2) increase

      3) remain the same

      4) contract

            Ans: 2) increase

 

4.    The income elasticity of demand being greater than one, the commodity must be

      1) a necessity

      2) a luxury

      3) an inferior good

      4) None of these

            Ans: 2) a luxury

 

5.    When there is one buyer and many sellers then that situation is called

      1) monopoly

      2) single buyer right

      3) down right

      4) double buyers right

            Ans: 2) single buyer right

 

6.    Average revenue means

1)     the revenue per unit of commodity sold

2)    The revenue from all the commodities sold.

3)    The profit realised from the marginal units sold.

4)    The profit realised by sale of all commodities.

Ans: 1) the revenue per unit of commodity sold 

 

      7. If the prices of inferior good falls, its demand

1)    Rises

2)    Falls

3)    Remains constant

4)    Any of the above.

Ans: 1) Rises

 

      8. Demand of commodity mainly depends on

1)    Purchasing will

2)    Purchasing power

3)    Tax policy

4)    Advertisement

Ans: 2) Purchasing power

  

9. When the marginal utility is zero, the total utility

1)    Minimum

2)    Increasing

3)    Maximum

4)    Decreasing

Ans: 3) Maximum

  

10. Sellers market denotes a situation where

1)    Commodities are available at competitive rates

2)    Demand exceeds supply

3)    Supply exceeds demand

4)    Supply and demand are evenly balanced.

Ans: 2) Demand exceeds supply

  

11. The breakeven point is where

1)    Marginal revenue equals marginal cost

2)    Average revenue equals total cost

3)    Total revenue equals total cost

4)    None of the above

Ans: 2) Average revenue equals total cost

  

12.  In Economics, production means

1)    Manufacturing

2)    Making

3)    Creating utility

4)    farming

Ans: 3) Creating utility

  

13. Sea water, fresh air, are regarded in Economics as

1)    Giffen goods

2)    Inferior goods

3)    Free goods

4)    Normal goods

Ans: 3) Free goods 

 

14. Which of the following does not determine the supply of labour?

1)    Size and age structure of population

2)    Nature of work

3)    Marginal productivity of labour

4)    Work-leisure ratio

Ans: 3) Marginal productivity of labour

 

15. Prime cost is equal to

1)    Variable cost plus administrative cost

2)    Variable cost plus fixed cost

3)    Variable costs only

4)    Fixed costs only

Ans: 1) Variable cost plus administrative cost

 

16. An expenditure that  has been made and cannot be recovered is called as

1)    Variable cost

2)    Opportunity cost

3)    Sunk cost

4)    Operational cost

Ans: 3) Sunk cost

 

17. Engel's Law states that the relationship between

1)    Quantity demanded and price of a commodity

2)    Quantity demanded and price of substitutes

3)    Quantity demanded and tastes of the consumers

4)    Quantity demanded and income of the consumers

Ans: 4) Quantity demanded and income of the consumers 

 

18. The demand curve for a Giffen good is

1)    Upward rising

2)    Downward falling

3)    Parallel to the quantity axis

4)    Parallel to the price axis

Ans: 1) Upward rising

  

19. All goods are scarce and limited in supply are called as

1)    Luxury goods

2)    Expensive goods

3)    Capital goods

4)    Economic goods

Ans: 4) Economic goods 

 

20. Which is the most essential function of an entrepreneur?

1)    Supervision

2)    Management

3)    Marketing

4)    Risk bearing

Ans: 4) Risk bearing

  

21. Knowledge, technical skills, education etc. in economics are regarded as

1)    Social overhead capital

2)    Human capital

3)    Tangible physical capital

4)    Working capital

Ans: 2) Human capital

  

22. When the total product rises at an increasing rate,the

1)    Marginal product is zero

2)    Marginal product is rising

3)    Marginal product is falling

4)    Marginal product is constant

Ans: 2) Marginal product is rising

 

 

 

 

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