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Indian economy MCQ for UPSC I MCQ on Indian economy I Objective questions on Indian economy I Indian economy for competitive exams pdf I Indian economy for competitive exams I Indian economy MCQ with answers pdf.
1. Note Printing Press that belongs to RBI is located in?
[A] Nasik
[B] Dewas
[C] Mysore
[D] Chennai
Correct Answer: C [Mysore]
2. Which among the following the definition is nearest to the Gross Budgetary Support?
[A] value of gross revenue receipts by the government
[B] Value of total plan expenditure
[C] Fraction of total expenditure of the government on different Central sectors plans
[D] Fraction of total expenditure of the government on different Central sectors/ ministries/departments and the support to State/Union Territory Plan
Correct Answer: D [Fraction of total expenditure of the government on different Central sectors/ ministries/departments and the support to State/Union Territory Plan]
3. Which among the following in India releases data on the balance of payments (BoP) from time to time?
[A] Central Statistical Organization
[B] Ministry of Finance, Government of India
[C] Ministry of Commerce & Trade, Government of India
[D] Reserve Bank of India
Correct Answer: D [Reserve Bank of India]
4. Which of the following has become the first bank to launch the biometric-based payment system Aadhaar Pay through its network?
[A] HDFC Bank
[B] IDFC Bank
[C] ICICI Bank
[D] State Bank of India
Correct Answer: B [ IDFC Bank ]
Notes:
IDFC has become the first bank to launch the biometric-based payment system Aadhaar Pay through its network
5. Global Trust Bank was acquired by which of the following banks in the year 2004?
[A] Canara Bank
[B] Union Bank of India
[C] Corporation Bank
[D] Oriental Bank of Commerce
Correct Answer: D [Oriental Bank of Commerce]
6. Under which of the following laws, the Subsidiary Bank of State Bank of India is constituted?
[A] Banking Regulation Act, 1949
[B] State Bank of India Act,1955
[C] State Bank of India (Subsidiary-Banks) Act,1959
[D] Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980
Correct Answer: C [State Bank of India (Subsidiary-Banks) Act,1959]
7. Which among the following would result in a fall in asset prices?
[A] Low Liquidity in the Economy
[B] High Liquidity in the Economy
[C] RBI increasing the Reverse Repo Rates
[D] RBI allows more banks to play
Correct Answer: A [Low Liquidity in the Economy]
8. Consider the following:
Inflation
Interest Rates
Which among the above are affected by the Open Market Operations conducted by the Reserve Bank of India?
[A] Only 1
[B] Only 2
[C] Both of them
[D] None of them
Correct Answer: C [Both of them]
Notes:
RBI conducts Open market operations by way of sale or purchase of government securities (g-secs) to adjust money supply conditions. RBI sells g-secs to suck out liquidity from the system and buys back g-secs to infuse liquidity into the system. These operations are often conducted on a day-to-day basis in a manner that balances inflation while helping banks continue to lend. The RBI uses OMO along with other monetary policy tools such as repo rate, cash reserve ratio, and statutory liquidity ratio to adjust the quantum and price of money in the system. OMO impact liquidity and thus affects both supply of credit and interest rates in markets. This is because liquidity has a bearing on both interest rates and inflation rates.
9. What is the meaning of the “Government Route” in Foreign Investments?
[A] Investments can be made only with the prior permission of the Government or Government authorities
[B] Investments can be made only in partnership with the Government or Government Companies
[C] Investment can be made only in the Government Companies
[D] Investment can be made only via a Foreign Government Body in India
Correct Answer: A [Investments can be made only with the prior permission of the Government or Government authorities]
10. Who among the following was the chairman of the expert group, looking into the process of developing a “Service Price Index” for India?
[A] Prof. Abhijit Sen
[B] Prof. C P Chandrashekhar
[C] K C Chakraborty
[D] None of them
Correct Answer: B [Prof. CP Chandrashekhar]
11. Which among the following is it a Progressive Tax?
[A] Customs duty
[B] Development Surcharge
[C] Income tax
[D] Sales tax
Correct Answer: C [Income tax]
Notes:
In progressive taxation, the tax liability increases with individual or entity income. This is based on principle of “ability to pay”. Under this system, lowest income people are generally exempted while highest income people pay highest taxes. Income Tax is thus an example of a progressive tax. Progressive taxation results in redistribution of income from rich to poor.
12. How many currencies are used in the Real Effective Exchange Rate (REER) that is both trade and export weighted indicator?
[A] 6
[B] 18
[C] 36
[D] 72
Correct Answer: C [36]
13. On which of the following rates, Reserve Bank of India purchases the Other Commercial Papers and Rediscount Bills of exchange from the Banks?
[A] Repo Rate
[B] Reverse Repo Rate
[C] Bank Rate
[D] Base Rate
Correct Answer: C [Bank Rate]
14. Who among the following heads the Trade and Economic Relations Committee (TERC) in India?
[A] Prime Minister
[B] Minister of Commerce
[C] Finance Minister
[D] Finance Secretary
Correct Answer: A [Prime Minister]
15. The service tax in India is __:
[A] collected and appropriated by the Union Government
[B] collected by the union government, appropriated by state governments
[C] collected by the state governments, appropriated by the union government
[D] collected and appropriated by state governments
Correct Answer: A [ collected and appropriated by the Union Government ]
Notes:
To enable Parliament to formulate by law principles for determining the modalities of levying the Service Tax by the Central Govt. and collection of the proceeds thereof by the Central Govt. and the State, the amendment vide Constitution (92nd Amendment) Act, 2003 has been made. Consequently, new article 268 A has been inserted for Service Tax levy by Union Govt., collected and appropriated by the Union Govt., and amendment of the seventh schedule to the constitution, in list I-Union list after entry 92B, entry 92C has been inserted for taxes on services as well as in article 270 of the constitution the clause (1) article 268A has been included.
16. Which among the following is a qualitative tool of monetary policy?
[A] Bank Rate
[B] Credit Ceiling
[C] Credit rationing
[D] Cash Reserve Ratio
Correct Answer: C [Credit rationing ]
Notes:
The quantitative instruments are Open Market Operations, Liquidity Adjustment Facility (Repo and Reverse Repo), Marginal Standing Facility, SLR, CRR, Bank Rate, Credit Ceiling, etc.
On the other hand, qualitative instruments are: credit rationing, moral suasion, and direct action (by RBI on banks).
17. Which of the following fertilizers have the highest nitrogen content?
[A] Calcium Nitrate
[B] Anhydrous Ammonia
[C] Urea
[D] Ammonium Nitrate
Correct Answer: B [ Anhydrous Ammonia]
Notes:
Anhydrous Ammonia is a gaseous fertilizer with NPK ratio 82-00-00. Urea has 46-00-00. Among solid fertilizers, Urea has maximum N content.
18. Which among the following is the top seafood exporting port of India in terms of dollar value?
[A] Visakhapatnam
[B] Tuticorin
[C] Kochi
[D] Mangalore
Correct Answer: A [ Visakhapatnam ]
Notes:
Visakhapatnam Port is the major seafood exporting port in terms of dollar value (22.59%). Pipavav is the major port in terms of quantity (25.27%).
19. Which among the following is it a money market instrument of shortest tenure?
[A] Notice money
[B] Call money
[C] Near Money
[D] Term Money
Correct Answer: B [ Call money ]
Notes:
The call money is the short-term money market instrument where money is borrowed or lent on demand for a day. It is also known as an overnight money market instrument. Intervening holidays and/or Sunday is excluded for this purpose. Thus, it is money borrowed on a day and repaid on the next working day (irrespective of the number of intervening holidays).
20. With respect to the ‘shares’ of a company, which of the following statements is/are correct?
A share is treated as a “Good” under Sale of Goods act
A person who holds the share of a public limited company has the right to transfer his / her shares
A share makes a person owner of assets of company
Select the correct option from the codes are given below:
[A] Only 1
[B] Only 1 & 2
[C] Only 2 & 3
[D] 1, 2 & 3
Correct Answer: B [ Only 1 & 2 ]
Notes:
A member who holds the shares of a company does not imply that the member owns any of the company’s assets. This is because assets would be still possessed by the company which is a legal person in itself. However, if the company is wound up, after selling its assets, the shareholder has the right to participate in the assets after the debts have been paid. This means that it is the right to what assets remain after liquidation.
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