Indian Economy GK Questions (MCQs) for SSC, State and All One Day Examinations of India. Objective Questions on Indian Economy for Competitive Examinations.
1. What is the name given to the graph that shows all those combinations of two goods that a consumer can afford economically at a given market price and within a particular income level?
[A] Demand Curve
[B] Isocost Line
[C] Supply Curve
[D] Budget Line
Answer: D [Budget Line]
Notes:
The budget line, also called the budget constraint, shows all combinations of two goods that a consumer can afford at market prices and within a particular income level. The knowledge of the concept of budget line is essential to understand the principle of consumer’s equilibrium.
2. What is meant by ‘Take off stage’ in an economy?
[A] Stage of growth
[B] Stage of stagnant
[C] Stage of collapse
[D] Stage of diminish
Answer: A [Stage of growth]
Notes:
Take-off is defined as the interval during which the rate of investment increases in such a way that per capita real output increases and this initial increase is accompanied by a radical change in the techniques of production and the nature of income flows. which maintains the new scale of investment and thereby maintains a tendency to increase per capita output.
3. A part of the national debt which is known as external debt is__
[A] borrowed by its citizens from abroad
[B] lent by its citizens to foreign governments
[C] borrowed by its government from abroad
[D] lent by its government to foreign government
Answer: C [borrowed by its government from abroad]
Notes:
External debt (or foreign debt) is that portion of a country’s total debt that is owed to creditors outside the country. Debtors can be governments, corporations or private households. Debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and the World Bank.
4. NTPC is a Central Public Sector Enterprise in which sector?
[A] Education
[B] Health
[C] Power
[D] Transport
Answer: C [Power]
Notes:
NTPC Limited (earlier known as National Thermal Power Corporation Limited) is an Indian PSU Public Sector Undertaking, engaged in the business of power generation and allied activities. NTPC’s core business is generation and sale of electricity to state-owned power distribution companies and state electricity boards in India.
5. The steel sheet used in the production of furniture is an example of?
[A] an intermediate good
[B] a final good
[C] an investment good
[D] a consumption good
Answer: A [an intermediate good]
Notes:
Intermediate goods are semi-finished products that are used as inputs in the production of other goods, including final goods. It includes a material or commodity that is the end product of one process but is also used as an input in the production process of another good. Steel sheets serve as a raw material in the production of furniture.
6. What are the reserves maintained by commercial banks with the Reserve Bank of India over and above the statutory minimum called?
[A] Cash reserves
[B] Deposit reserves
[C] Excess reserves
[D] Momentary reserves
Answer: C [Excess reserves ]
Notes:
In banking, excess reserves are bank reserves in excess of the reserve requirement set by a central bank. They are reserves of cash more than the required amounts.
7. Who has been appointed as the Chairman of the 15th Finance Commission?
[A] Vijay Kelkar
[B] Arbind Pangarhia
[C] N K Singh
[D] C Rangrajan
Answer: C [N K Singh ]
Notes:
Former Planning Commission member N.K. Singh was appointed chairman of the 15th Finance Commission, which, among other things, has been asked to look into the impact of the goods and services tax (GST) on the finances of both the centre and states.
8. A situation where the expenditure of the government exceeds its revenue is called__
[A] Default Financing
[B] Deficit Revenue
[C] Budget Deficit
[D] Default Revenue
Answer: C [Budget Deficit]
Notes:
The Budget Deficit is the financial situation wherein the expenditures exceed the revenues. It generally relates to the government’s expenditure and not the business or individual’s spending. The budgetary deficit is usually expressed as a percentage of GDP.
9. What is the main purpose of devaluation?
[A] encourage imports
[B] encourage exports
[C] encourage both exports and imports
[D] discourage both exports and imports
Answer: B [encourage exports]
Notes:
‘Devaluation’ means the official lowering of the value of a country’s currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. Devaluation makes a country’s exports relatively less expensive for foreigners and makes foreign products relatively more expensive for domestic consumers, discouraging imports.
10. The hypothesis that a rapid increase in per capita income will be linked to a reduction in poverty is called?
[A] trickle-down Hypothesis
[B] trickle-up hypothesis
[C] U shaped hypothesis
[D] poverty estimation hypothesis
Answer: A [trickle-down Hypothesis]
Notes:
According to the trickle-down hypothesis the rapid growth of per capita income will be associated with a reduction in poverty. In India, this hypothesis has been interpreted to suggest that growth in agricultural output without radical institution reform will reduce the incidence of poverty in the context of agricultural development in India.
Indian Economy GK Questions
11. What is the FDI allowed under direct route in the chemical industry?
[A] 100
[B] 71
[C] 51
[D] 49
Answer: A [100]
Notes:
100% FDI is allowed under direct route in chemical sector except for Hazardous chemicals.
12. What is India’s rank in the sponge Iron production in the world?
[A] 2
[B] 3
[C] 1
[D] 4
Answer: C [1]
Notes:
India is the largest producer of sponge iron in the world. Direct reduced iron (DRI) is also called sponge iron which is produced from the direct reduction of iron ore (in the form of lumps, pellets, or fines) to iron by a reducing gas or elemental carbon produced from natural gas or coal.
13. Where is the Headquarters of World Steel Association located?
[A] Hague
[B] New York
[C] Beiing
[D] Brussels
Answer: D [Brussels]
Notes:
The world steel association is the international trade body for the iron and steel industry. Its headquarters is at Brussels, Belgium. It was founded in 1967.
14. Who wrote the book Development as Freedom?
[A] Raghuram Rajan
[B] Abhijeet Banerjee
[C] Amartya Sen
[D] None of the above
Answer: C [Amartya Sen]
Notes:
Amartya Sen, the Nobel Laureate in Economics, wrote the book Development as Freedom.
15. Where is Central Pulp & Paper Research Institute located?
[A] Uttar Pradesh
[B] Madhya Pradesh
[C] Maharashtra
[D] Odisha
Answer: A [Uttar Pradesh]
Notes:
The Central Pulp and Paper Research Institute (CPPRI), Saharanpur, an autonomous body under the administrative control of the Ministry of Commerce & Industry was set up on 11 November, 1980 under the Societies Registration Act, 1860. It is situated in Uttar Pradesh.
16. Which Indian city is known as the healthcare capital of India?
[A] Chennai
[B] Mumbai
[C] Hyderbad
[D] Pune
Answer: A [Chennai]
Notes:
Chennai is known as healthcare capital of India. India has lot of medical tourism and most patients visit Chennai over other cities.
17. The basic principle to decide the Minimum Support Prices in India is that they are around ___times of the production cost?
[A] 1.5
[B] 1.8
[C] 2.2
[D] 2.2
Answer: A [1.5]
Notes:
Union Budget for 2018-19 had announced that MSPs would be kept at the level of 1.5 times of the cost of production. Production cost includes all paid out costs such as those incurred on account of hired human labour, bullock labour/ machine labour, rent paid for leased in land, expenses incurred on use of material inputs like seeds, fertilizers, manures, irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for operation of pump sets etc, miscellaneous expenses & imputed value of family labour.
18. Who among the following owns LIC?
[A] RBI
[B] SBI and RBI
[C] Government of India
[D] None of the above
Answer: C [Government of India]
Notes:
Life Insurance Corporation of India(LIC) was established in 1956. LIC is an Indian state-owned insurance group and investment company headquarters in Mumbai. It is the largest insurance company in India.
19. What is India’s rank in the world bank’s Logistics performance Index?
[A] 32
[B] 44
[C] 28
[D] 40
Answer: B [44]
Notes:
India’s rank in the world bank’s Logistics performance Index is 44. Germany is at 1.
20. What is India’s rank in terms of aviation market size?
[A] 4
[B] 6
[C] 3
[D] 7
Answer: D [7]
Notes:
According to International Air Transport Association(IATA) India is the seventh-largest aviation market in the world.
Indian Economy GK Questions
21. Which of the following is/ are the example of Kharif crops?
[A] Groundnut
[B] Maize
[C] Paddy
[D] All of the above
Answer: D [All of the above]
Notes:
Kharif crops are cultivated and harvested respectively in April and October. Some of the examples of Kharif crops are Groundnut, Maize and Paddy.
22. What is India’s rank in the e-waste production in the world?
[A] 2
[B] 4
[C] 5
[D] 6
Answer: C [5]
Notes:
According to the UN’s Global E-Waste Monitor, India ranks fifth in the world in generating e-waste. 15. India generates more than two million tonnes of e-waste annually, and the bulk of it is processed in the informal sector.
23. In which year make in India initiative was launched?
[A] 2013
[B] 2014
[C] 2015
[D] 2016
Answer: B [2014]
Notes:
Make in India initiative was launched in 2014. It was launched to boost manufacturing sector in India. The Make in India has about 25 focus sectors. It has various government schemes, including the FDI policies, IPR, etc for these 25 sectors.
24. Which organization releases the Wholesale price Index(WPI)?
[A] Central statistical office
[B] NSSO
[C] Economic advisor
[D] None of the above
Answer: C [Economic advisor]
Notes:
Wholesale Price Index (WPI) is computed by the Office of the Economic Adviser in Ministry of commerce & Industry, Government of India.
25.When was Pharmaceutical Export Promotion Council (PHARMEXCIL) established?
[A] 2004
[B] 2005
[C] 2006
[D] 2002
Answer: A [2004]
Notes:
The Pharmaceutical Export Promotion Council (PHARMEXCIL) was established in 2004 by the Ministry of Commerce and Industry, Government of India, to promote pharma export.
26. What is the main theme of PM Awas Yojna?
[A] Housing for All by 2025
[B] Housing to Poor by 2020
[C] Housing the Indians by 2023
[D] Housing to All by 2022
Answer: D [Housing to All by 2022]
Notes:
Pradhan Mantri Awas Yojana is being implemented by the ministry of housing and urban affairs under the mission ‘Housing for All by 2022’ since June 2015.
27. Who announces SAP to sugarcane farmers?
[A] CACP
[B] NITI Aayog
[C] State government
[D] Central government
Answer: C [State government]
Notes:
The central government declares a min price of sugarcane called Fair Remunerative Price (FRP) and state governments have also right to declare their own price which is called State Advisory Price (SAP). Generally SAP is more than FRP.
28. What are railways running across the entire breadths of the country called?
[A] Metros
[B] Bullet trains
[C] Transcontinental Railways
[D] Hyperloop
Answer: C [Transcontinental Railways]
Notes:
The large countries like Russia, Canada, US and Australia have a number of rail routes running across the entire breadths of the continents. Such railways are called transcontinental railways. Trans-Siberian Railway in Russia is the longest railway of the world.
29. Which is the busiest airport of the world in terms of number of passengers using it?[A] Los Angeles
[B] Dallas
[C] San Francisco
[D] Atlanta
Answer: D [Atlanta]
Notes:
Hartsfield–Jackson Atlanta International Airport in Georgia, United States is the busiest airport in the world. In 2021, the Hartsfield–Jackson Atlanta International Airport served around 76 million passengers. It has retained the top position as the world’s busiest airport by passenger traffic for over 22 consecutive years. In comparison, the next busiest airport is Dallas/Fort Worth International Airport in the USA which served around 62.5 million passengers in 2021. Dubai International Airport that ranked #3 had 29.1 million passengers in 2021.
30. What is the maximum age of a company to take investment from an Angel Investor?[A] 2 years
[B] 3 years
[C] 4 years
[D] 5 years
Answer: B [3 years]
Notes:
A company that can investment from an angel investor should not be older than 3 years. The maximum investment is 5 crores and the minimum investment is 50 lakhs.
Indian Economy GK Questions
31. What is IPO in context to a company?
[A] The first sale of stock by a private company to the public
[B] Upgradation of shares from primary to secondary market
[C] Selling of shares at premium by a company
[D] Convert of a private limited company to public limited Company
Answer: A [ The first sale of stock by a private company to the public ]
Notes:
When an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public, it is called Initial Public Offering or IPO. In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), the best offering price and the time to bring it to market.
32. Travel and Tourism Competitive Index (TTCI) is published by:
[A] World Economic Forum
[B] World Tourism Organization
[C] World Travel & Tourism Council
[D] Amnesty International
Answer: A [World Economic Forum]
Notes:
The Travel and Tourism Competitiveness Report is published by the World Economic Forum.
33. FEMA was implemented by replacing FERA in which year?
[A] 31.01.2002
[B] 01.06.2000
[C] 31.01.2000
[D] 01.01.2003
Answer: B [01.06.2000]
Notes:
FEMA was promulgated in the year 1999, to repeal and replace the earlier act. The act came into force w.e.f 01.06.2000.The act applies to the whole country and to all the branches and agencies of the body corporate operating outside India, whose owner or controller is an Indian resident.
34. What is the full form of EMI?
[A] Equal Monthly Installment
[B] Equated Monthly Installment
[C] Equal Monthly Income
[D] Equated Monthly Incentive
Answer: B [Equated Monthly Installment]
Notes:
EMI stands for equated monthly installment. It is one part of the equally divided monthly outgoes to clear off an outstanding loan within a stipulated time frame.
35. Where was the 1st Cotton Mill established in India?
[A] Bombay
[B] Madras
[C] Calcutta
[D] Hyderabad
Answer: A [Bombay]
Notes:
The first Indian cotton mill, “The Bombay Spinning Mill”. This mill was opened in 1854 in Bombay by Cowasji Nanabhai Davar.
36. Where is the headquarter of Bharatiya Reserve Bank Note Mudran Private Limited located?
[A] Chennai
[B] New Delhi
[C] Hyderabad
[D] Bangalore
Answer: D [Bangalore]
Notes:
The headquarter of Bharatiya Reserve Bank Note Mudran Private Limited is at Bangalore, Karnataka. It was established on 3rd February 1995. It designs, print and supply banknotes for the Reserve Bank of India(RBI).
37. In which year the Royal Commission on Indian Currency and Finance recommended the creation of a central bank for India?
[A] 1926
[B] 1927
[C] 1928
[D] 1929
Answer: A [1926]
Notes:
In 1926, the Royal Commission on Indian Currency and Finance recommended the creation of a central bank for India.
38. Which state in India produces most of the silk?
[A] Karnataka
[B] Assam
[C] Kerala
[D] Andhra Pradesh
Answer: A [Karnataka]
Notes:
Karnataka is the largest producer of silk in India, producing about one-third of the country’s silk each year. The state produces an average of 8,200 metric tonnes of silk annually. The five states that produce the most silk in India are: Karnataka, Andhra Pradesh, Tamil Nadu, West Bengal, Jammu & Kashmir. These five states produce almost 97% of India’s mulberry silk.
39. Which one of the following bodies finalizes the Five-Year Plans proposals earlier?
[A] Planning Commission
[B] Union Cabinet
[C] National Development Council
[D] Ministry of Planning
Answer: A [Planning Commission]
Notes:
Planning Commission finalized the Five-Year Plans proposals earlier. It has been scraped now and replace with NITI Aayog.
40. Which among the following best describes scarcity in economics?
[A] Low demand for good
[B] High demand and less supply of good
[C] Low demand as people don’t want to consume it
[D] Goods available are not free
Answer: D [Goods available are not free]
Notes:
Scarcity means limited goods are for more number of people. In an Economy the resources are scarce and the wants are unlimited.
Indian Economy GK Questions
41. The minimum support prices (MSP) for major agricultural products are fixed by the government, each year, after taking into account the recommendations of which of the following organizations?
[A] Planning Commission of India
[B] Finance Commission of India
[C] Farmer’s Commission of India
[D] Commission for Agricultural Costs and Prices
Answer: D [Commission for Agricultural Costs and Prices]
Notes:
The Commission for Agricultural Costs and Prices (CACP) is a body set up by the Government of India to recommend the minimum support prices (MSPs) for various agricultural commodities. The CACP takes into account a number of factors, including the cost of production, changes in input prices, and demand and supply conditions in the market, in order to arrive at its recommendations for MSPs. These recommendations are then used by the government to set the MSPs for various crops.
42. In context with the currency management in India the responsibility for coinage vests with which of the following?
[A] Government of India
[B] Reserve Bank of India
[C] Currency Chests
[D] Commercial Banks
Answer: A [Government of India]
Notes:
Government of India on the basis of the Coinage Act, 1906
43. Which among the following is the most important source region of NRI remittances to India ?
[A] North America
[B] Europe
[C] Middle East
[D] South America
Answer: A [North America]
44. Which among the following country is India’s biggest Trade partner?
[A] China
[B] United States
[C] UAE
[D] Saudi Arabia
Answer: [A] China
45. Consider the following:
- Reverse Repo Rate
- Cash Reserve Ratio
- Statutory Liquidity Ratio
- Bank Rate
An increase in which among the above could raise the interest rates in the market?
[A] 1
[B] 1 & 2
[C] 1, 2 & 3
[D] 1, 2, 3 & 4
Answer: D [1, 2, 3 & 4]
Notes:
The Reserve Bank uses various policy levers, such as repo rate, reverse repo rate, cash reserve ratio, statutory liquidity ratio and bank rate, to influence the amount of money in the market. An increase in any one of these could raise the interest rates.
46. Which among the following is correct in context with the White ATMs (Automated Teller Machines) ?
[A] ATMs owned by Foreign Companies
[B] ATMs not owned by banks but by private ATM service providers.
[C] Outsourced ATM Service by Banks – The ATM named under a brand sponsor bank but ATM machine not owned by the Bank
[D] ATMs owned by Government
Answer: B [ATMs not owned by banks but by private ATM service providers.]
Notes:
‘White label ATM’: These are ATM’s which are not owned by banks but by private ATM service providers. Customers from any bank can deposit or withdraw money from such ATMs. They will provide ATM services to customers of all banks. Such ATMs will be White Label Automated Teller Machines-WLAs and will provide ATM services to customers of all banks. WLA cannot charge customers.
47. Consider the following statements about Kul Irrigation technique:
- The technique is most prevalent in southern India
- The method involves natural or artificial removal of surface and sub-surface water from a given area
Which of the above statements is/are correct?
[A] 1 Only
[B] 2 Only
[C] Both 1 & 2
[D] Neither 1 nor 2
Answer: D [ Neither 1 nor 2]
Notes:
First statement is incorrect because the technique is most prevalent in Himalayan region. Second statement is incorrect because the technique involves contribution to farming, which utilises kuls (diversion channels) to carry water from glacier to village.
48. In context with banking in India, a Custodial Account is created for __:
[A] Illiterates
[B] Women
[C] Minor persons
[D] Senior Citizens
Answer: C [ Minor persons ]
49. Which of the following differences between the payment banks and small finance banks is/are correct?
- While small finance bank can undertake lending activities, payment banks are not allowed to do so
- While small finance banks can set up subsidiaries for NBFC business, payment banks are not allowed to do so
Select the correct option from codes given below:
[A] 1 Only
[B] 2 Only
[C] Both 1 & 2
[D] Neither 1 nor 2
Answer: C [Ministry of Agriculture]
Notes:
The Directorate of Marketing and Inspection (DMI) operates under the Department of Agriculture, Cooperation, and Farmers Welfare, Ministry of Agriculture and Farmers Welfare. It was established in 1935 and serves as the regulatory body responsible for promoting and regulating marketing and quality control of agricultural and allied products in the country.
50. Which one of the following is correct regarding stabilization and structural adjustment as two components of the new economic policy adopted in India?
- [A] Stabilization is a gradual, multi-step process while structural adjustment is a quick adaptation process
- [B] Structural adjustment is a gradual, multi-step process, while stabilization is a quick adaptation process
- [C] Stabilization and structural adjustment are very similar and complementary policies. It is difficult to separate one from the other
- [D] Stabilization mainly deals with a set of policies which are to be implemented by the Central Government while structural adjustment is to be set in motion by the State Governments
Answer: B [Structural adjustment is a gradual, multi-step process, while stabilization is a quick adaptation process]
Notes:
New Economic Policy was adopted in 1991 based on Rao-Manmohan model. Stabilization component of any economy is essentially a short-term programme while the structural readjustment component is a long term process.
