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Indian Economy GK questions for Competitive Exams

Indian Economy GK Questions

Multiple choice questions on Indian Economy for preparation of SSC, NDA, CDS, UPSC, UPPSC and State PSC Examinations.

Practice MCQ Questions

1. .......... is the total value of final goods and services produced within a country's border over a given time period.

(a) Government revenue

(b) Gross Domestic Product

(d) Gross National Product

Answer: (b) Gross Domestic Product

2. Average income is also called _____

(a) Net National Income

(b) Net National Product

(d) Total income

Answer: (c) Per-capita income

3. What does GNP stand for ?

(a) Gramin Nigam Parishad

(b) Gramin Nisak Praman

(d) Gross National Produce

Answer: (c) Gross National Product

4. Which of the following is not taken into account to estimate national income?

(a) Services of a personal secretary

(b) Services of a housewife

(d) Services of tourist guide

Answer: (b) Services of a housewife

5. Disguised unemployment in India is mainly related to

(a) Agricultural Sector

(b) Rural Area

(d) Urban Area

Answer: (a) Agricultural Sector

6. Who is the author of the book, ‘Poverty and Un-British Rule in India’?

(a) Dadabhai Naoroji

(b) Shashi Tharoor

(d) Annie Besant

Answer: (a) Dadabhai Naoroji

7. The demand curve…………

(a) shows that as the price of a good increases, demand for the good will increase

(b) shows that as the price of a good increases, demand for the good will decrease

(d) indicates that there is a direct relationship between quantity demanded and price

Answer: (b) shows that as the price of a good increases, demand for the good will decrease

8. When the demand for a good increases with an increase in income, such a good is called………

(a) Superior good

(b) Giffin good

(d) Normal good

Answer: (b) Giffin good

9. HDI is an aggregate measure of progress in which of the three dimensions?

(a) Health, Education, Income

(b) Food Security, Employment, Income

(d) Height, Weight, Colour

Answer: (a) Health, Education, Income

10. What does parallel economy mean?

(a) Black Money

(b) Parallel Business

(d) No option is correct

Answer: (a) Black Money

11. What is the concept of globalization in Indian economy?

(a) Increment in external debt.

(b) Having minimum intervention in economic relations with other countries

(d) Plannings for easy import and exports.

Answer: (b) Having minimum intervention in economic relations with other countries

12. Trickle-down theory ignores the impact of economic growth on

(a) Investment

(b) Savings

(d) Consumption

Answer: (c) Income distribution

13. Commodity or product differentiation is found in which market?

(a) Perfect competition Market

(b) Monopoly Market

(d) No option is correct

Answer: (c) Imperfect Competition Market

14. In –––––––economies, all productive resources are owned and controlled by the government.

(a) Capitalist

(b) Mixed

(d) Socialist

Answer: (d) Socialist

15. GST is NOT applicable on which of the following goods or services?

(a) Automobiles

(b) Salon services

(d) Alcohol

Answer: (d) Alcohol

16. Which among the following is not a component of balance sheet?

(a) Total issued capital

(b) Cash held at the bank

(d) Revenue from sales of the company’s products

Answer: (d) Revenue from sales of the company’s products

17. Which type of foreign investment is considered as unsafe?

(a) Foreign Direct Investment (FDI)

(b) Portfolio investment

(d) External commercial borrowing

Answer: (b) Portfolio investment

18. What is MUDRA?

(a) Development and Refinance Agency

(b) Scheme for Agricultural Insurance

(d) Development and Regulatory Authority For Urban Township

Answer: (a) Development and Refinance Agency

19. Bharatnet Project is related to which of the following?

(a) Free wifi to students in rural area

(b) High speed internet to farmers

(d) A project connecting rural area with urban area

Answer: (c) Broadband connectivity to gram panchayats

20. According to World Bank what was the approximate land utilization percentage of India for agriculture purposes?

(a) 50%

(b) 60%

(d) 45%

Answer: (b) 60%

21. The mixed economy is :

(a) Co-existence of traditional and modern industries

(b) Presence of domestic and foreign investments

(c) A market system of resource allocation, commerce, and trade in which free markets coexist with government intervention

(d) Presence of subsistence and commercial farming

Answer: (c) A market system of resource allocation, commerce, and trade in which free markets coexist with government intervention

22. If a country devalues its currency, its………

(a) Exports become cheaper and imports become costlier

(b) Exports become costlier and imports become cheaper

(d) No effect on exports and imports

Answer: (a) Exports become cheaper and imports become costlier

23. Who decides repo rate, reverse repo rate and bank rate?

(a) SEBI

(b) NABARD

(d) SBI

Answer: (c) Reserve Bank of India

24. When was the National Stock Exchange of India established?

(a) 1991

(b) 1994

(d) 1992

Answer: (d) 1992

25. Which organization releases the Consumer Price Index (CPI) in India?

(a) Reserve Bank of India (RBI)

(b) Central Statistical Office (CSO)

(d) Securities and Exchange Board of India (SEBI)

Answer: (b) Central Statistical Office (CSO)

26. The term 'Fiscal Policy' refers to the government's policy regarding:

(a) Foreign trade

(b) Taxation and public expenditure

(d) Labor relations

Answer: (b) Taxation and public expenditure

27. What does 'FDI' stand for in the context of economics?

(a) Foreign Debt Investment

(b) Fiscal Development Index

(d) Financial Dividend Income

Answer: (c) Foreign Direct Investment

28. The economic concept of 'opportunity cost' is best described as:

(a) The total cost of producing a good or service

(b) The cost of the next best alternative foregone when a choice is made

(d) The price at which a good or service is sold in the market

Answer: (b) The cost of the next best alternative foregone when a choice is made

29. The World Trade Organization (WTO) was established in which year?

(a) 1945

(b) 1956

(d) 2000

Answer: (c) 1995

30. What is the term for the total value of all final goods and services produced within a country's borders in a specific time period?

(a) Gross Domestic Product (GDP)

(b) Gross National Product (GNP)

(d) Net Domestic Product (NDP)

Answer: (a) Gross Domestic Product (GDP)

31. Which organization regulates and supervises the functioning of credit rating agencies in India?

(a) Reserve Bank of India (RBI)

(b) Securities and Exchange Board of India (SEBI)

(d) Insurance Regulatory and Development Authority of India (IRDAI)

Answer: (b) Securities and Exchange Board of India (SEBI)

32. The term 'Inflation' refers to:

(a) Increase in the value of money

(b) Decrease in the general price level

(d) Stagnation in the economy

Answer: (c) Increase in the general price level

33. Which market structure is characterized by a single seller and no close substitutes for the product?

(a) Perfect Competition

(b) Monopoly

(d) Monopolistic Competition

Answer: (b) Monopoly

34. The 'Laffer Curve' is associated with:

(a) Fiscal Policy

(b) Taxation

(d) Inflation

Answer: (b) Taxation

35. The concept of 'Gini Coefficient' is used to measure:

(a) Unemployment rate

(b) Poverty rate

(d) GDP growth rate

Answer: (c) Income inequality

36. The 'Gold Standard' is a monetary system where:

(a) The currency is backed by a specific quantity of gold

(b) The currency is backed by government bonds

(d) The currency is not backed by any physical asset

Answer: (a) The currency is backed by a specific quantity of gold

37. Which of the following is NOT a function of the Reserve Bank of India (RBI)?

(a) Issuing currency notes and coins

(b) Regulating and supervising banks and financial institutions

(d) Promoting political stability

Answer: (d) Promoting political stability

38. Which term is used to describe a situation where the central bank increases the money supply to stimulate economic activity?

(a) Monetary tightening

(b) Quantitative easing

(d) Trade deficit

Answer: (b) Quantitative easing

39. The 'Law of Diminishing Marginal Utility' states that:

(a) As the price of a good increases, the quantity demanded increases

(b) As the price of a good decreases, the quantity demanded increases

(d) As the price of a good increases, the quantity supplied increases

Answer: (c) As more units of a good are consumed, the additional satisfaction from each successive unit decreases

40. Which term is used to describe a tax system where the average tax rate increases as income increases?

(a) Progressive tax

(b) Regressive tax

(d) Direct tax

Answer: (a) Progressive tax

41. The 'Liquidity Trap' refers to a situation where:

(a) Banks have excess liquidity

(b) Interest rates are very low

(d) People hold cash instead of investing

Answer: (d) People hold cash instead of investing

42. The concept of 'Open Market Operations' is used by the central bank to:

(a) Buy and sell foreign exchange

(b) Regulate interest rates

(d) Manage the government budget

Answer: (b) Regulate interest rates

43. The 'Phillips Curve' illustrates the trade-off between:

(a) Inflation and unemployment

(b) Fiscal deficit and government spending

(d) Demand and supply

Answer: (a) Inflation and unemployment

44. The 'Multiplier Effect' refers to:

(a) The impact of government spending on the economy

(b) The change in aggregate demand due to a change in investment

(d) The elasticity of supply in a competitive market

Answer: (b) The change in aggregate demand due to a change in investment

45. Which financial institution acts as a lender of last resort for banks in India?

(a) Securities and Exchange Board of India (SEBI)

(b) National Bank for Agriculture and Rural Development (NABARD)

(d) Small Industries Development Bank of India (SIDBI)

Answer: (c) Reserve Bank of India (RBI)

46. What is the term for a situation where a country imports more goods and services than it exports?

(a) Trade surplus

(b) Balance of payments

(d) Trade deficit

Answer: (d) Trade deficit

47. The 'Hawala' system is associated with:

(a) Tax evasion

(b) Money laundering

(d) Stock market trading

Answer: (b) Money laundering

48. Which term is used to describe the rate at which a country's currency can be exchanged for another currency?

(a) Trade balance

(b) Exchange rate

(d) Current account

Answer: (b) Exchange rate

49. The concept of 'Fiscal Policy' refers to:

(a) The government's plan to regulate the money supply

(b) The government's plan to manage inflation

(d) The government's plan to control interest rates

Answer: (c) The government's plan to manage its budgetary activities

50. What is the term for the total value of all goods and services produced within a country's borders, including income earned from abroad?

(a) Gross National Product (GNP)

(b) Gross Domestic Product (GDP)

(d) National Income

Answer: (a) Gross National Product (GNP)

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