indian economy questions and answers for competitive exams

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indian economy questions and answers for competitive exams

1. Ad Valorem Tax is levied on the basis of which among the following?
[A] Volume
[B] Value
[C] Production
[D] Export

Correct Answer: B [Value]
Notes:
Ad valorem tariff is calculated on the basis of the value of the imported good, expressed as a percentage of such value. For example, an ad valorem tariff of 10% on an imported car worth US$ 10000 would lead to a requirement to pay US$ 1000 as customs duty.

2. which one of the followings is the benefits received principle of taxation to achieve optimality bases?
[A]. Marginal benefit received
[B]. Total benefit received
[C]. Average benefit received
[D]. Ability to pay for the benefit

Correct Answer: D

3.  Which of the following country have the highest productivity of rice?
(a)  United kingdom
(b)  USA
(c)  Australia
(d)  China

Correct Answer:  d

4.The central banking functions in India are performed by the
I. Central Bank of India
II. Reserve Bank of India
III. State Bank of India
IV. Punjab National Bank
[A]. I, II
[B]. II
[C]. I
[D]. II, III

Correct Answer: B

5.  Which of the following is not the fibre crop?
(a)  Cotton
(b)  Jute
(c)  Mesta
(d)  None of these

Correct Answer:  d

6. Development expenditure of the Central government does not include
[A]. defence expenditure
[B]. expenditure on economic services
[C]. expenditure on social and community services
[D]. grant to states

Correct Answer: A

7. A systematic record of all economic transactions completed between residents of a country and the rest of the world in a year is known as..?
[A] Net Capital Flow
[B] Balance of Payment
[C] Balance of Trade
[D] Absolute Flow

Correct Answer: B [Balance of Payment]
Notes:
The Balance of International payments or Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
The three main components of BoP are Current Account, Capital Account and Official Reserve Transactions.

8. If the cash reserve ratio is lowered by the RBI, its impact on credit creation will be to
[A]. increase it
[B]. decrease it
[C]. no impact
[D]. None of the above

Correct Answer: A

9. ICICI is the name of a
[A]. chemical industry
[B]. bureau
[C]. corporation
[D]. financial institution

Correct Answer:  D

10. Which of the following items would not appear in a company's balance sheet?
[A]. Value of stocks of raw materials held
[B]. Total issued capital
[C]. Revenue from sales of the company's products
[D]. Cash held at the bank

Correct Answer: C

11. “A statement of estimated receipts and expenditures called annual Financial Statement (Budget) has to be placed before parliament for each financial year.”
The above provision has been enshrined in which among the following articles of Constitution of India?
[A] Article 110
[B] Article 111
[C] Article 112
[D] Article 113

Correct Answer: C [Article 112]
Notes:
Article 112 of the Indian Constitution says that every year “the President of India shall cause to be laid before both the houses of the parliament” the “Annual Financial Statement”. This is popularly known as Budget. “cause to be laid” here means that the person through whom President acts, is Finance Minister of the country, who is known as the custodian of the nation’s Finances. The Budget gives the complete picture of the estimated receipts and expenditures of the Government of India for that year. This picture is actually based upon the budget figures of the previous years.

12.  Which of the following is the correct order, (from higher to lower) of coffee producing states in India?
(a)  Kerala> Karnataka>Tamil Nadu
(b)   Karnataka> Kerala >Tamil Nadu
(c)  Maharashtra>Tamil Nadu>Kerala
(d)  None of these

Correct Answer:  b

13. One of the reasons for India's occupational structure remaining more or less the same over the years has been that
[A]. investment pattern has been directed towards capital intensive industries
[B]. productivity in agriculture has been high enough to induce people to stay with agriculture
[C]. ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture
[D]. people are largely unaware of the significance of transition from agriculture to industry for economic development

Correct Answer: A

14.  Which of the following is included in the Horticulture?
(a)  Pomology
(b)  Olericulture
(c)  Floriculture
(d)  All of the above

Correct Answer: d

15.  Which of the following is the top fruits producer in India?
(a)  Gujarat
(b)  Andhra Pradesh
(c)  Maharashtra
(d)  Himachal Pradesh

Correct Answer: c

16. Birth rate is number of births per ………….of the population during one year.
[A] 100
[B] 1000
[C] 10000
[D] 100000

Correct Answer: B [1000]
Notes:
Births are usually measured using the birth rate i.e. the number of live births per 1,000 people. Deaths are usually measured using the death rate i.e. the number of deaths per 1,000 people. Migrations is the movement of people in and out of an area. Births and deaths are the natural causes of population change. The difference between the birth rate and the death rate of a country is called the natural growth rate.

17. Gilt-edged market means
[A]. bullion market
[B]. market of government securities
[C]. market of guns
[D]. market of pure metals

Correct Answer: B

18. Capitalism is based upon “Laissez-faire system”. What is “Laissez-faire system”?
[A] No governmental intervention
[B] Maximum governmental intervention
[C] Role of Market Forces is Minimum
[D] Limited government Intervention

Correct Answer: A [No governmental intervention]
Notes:
Laissez faire refers to the economic policy of letting owners of industry and business set working conditions without interference. This policy favours a free market unregulated by the government. The term comes from a French phrase that means “let do”.

19.  Which of the following is the biggest source of Vitamin A?
(a)  Papaya
(b)  Mango
(c)  Sunflower
(d)  Apple

Correct Answer: b

20.  Which of the following statement is no correct?
(a)  China is the largest mango producer in the world
(b)  Karnataka has the highest food productivity in India
(c)  Himachal Pradesh is the biggest producer of fruits in India
(d)  Maharashtra is the biggest producer of banana in India.

Correct Answer: d

21. In the last one decade, which one among the following sectors has attracted the highest foreign direct investment inflows into India?
[A]. Chemicals other than fertilizers
[B]. Services sector
[C]. Food processing
[D]. Telecommunication

Correct Answer: D

22.  Which of the following fruit is produced in the largest area of India?
(a)  Mango
(b)  Banana
(c)  Apple
(d)  Guava

Correct Answer: a

23. Devaluation of a currency means
[A]. reduction in the value of a currency vis-a-vis major internationally traded currencies
[B]. permitting the currency to seek its worth in the international market
[C]. fixing the value of the currency in conjunction with the movement in the value of a basket of pre-determined currencies
[D]. fixing the value of currency in multilateral consultation with the IMF, the World Bank and major trading partners

Correct Answer: A

24. Those goods which have positive relationship between price and quantity demanded are called as ….?
[A] Veblen good
[B] Essential Goods
[C] Giffen Good
[D] Capital Good

Correct Answer: C [Giffen Good]

25. In the second nationalization of commercial banks, ___ banks were nationalized.
[A]. 4
[B]. 5
[C]. 6
[D]. 8

Correct Answer: C

26. “Bad money (if not limited in quantity) drives good money out of circulation.”The statement is from which among the following laws?
[A] Keynes’ law
[B] Wagner’s law
[C] Gresham’s law
[D] Grimm’s law

Correct Answer: C [Gresham’s law]

27. Since independence, both development and non-development expenditures have increased; the increase in the former being a little more than in the other. Non-development expenditure involves
I. interest payments
II. subsidies
III. defence
IV. irrigation
[A]. I, II
[B]. I
[C]. I, II, III
[D]. II, III, IV

Correct Answer: C

28. Which among the following is a suitable term for the state of economy in which economic activity is slowing down but wages and prices continue to rise ?
[A] Inflation
[B] Deflation
[C] Skweflation
[D] Stagflation

Correct Answer: D [Stagflation]
Notes:
Stagflation refers to persistent high inflation coupled with high unemployment and stagnant demand /growth in economy.
High Inflation + Low Economic Growth {or conditions of recession} + Low Employment Generation = Stagflation

29. Depreciation means
[A]. closure of a plant due to lock out
[B]. closure of a plant due to labour trouble
[C]. loss of equipment over time due to wear and tear
[D]. destruction of a plant in a fire accident

Correct Answer: C

30.  Which of the following statement is not correct regarding banana?
(a)  India is the biggest producer in the world
(b)  It contains 27% carbohydrates
(c)  Tamil Nadu is the biggest producer of it.
(d)  ‘Amrapali’ is the finest variety of banana.

Correct Answer: d

31. Deficit financing leads to inflation in general, but it can be checked if
[A]. government expenditure leads to increase in the aggregate supply in ratio of aggregate demand
[B]. only aggregate demand is increased
[C]. all the expenditure is denoted national debt payment only
[D]. All of the above

Correct Answer: D

32.  ………………..is the largest spice producing state in India.
(a)  Kerala
(b)  Andhra Pradesh
(c)  Rajasthan
(d)  Kashmir

Correct Answer: b

33. If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits
[A]. will decrease
[B]. will increase
[C]. will neither increase nor decrease
[D]. None of the above

Correct Answer: C

34. Agriculture, Irrigation and Power Projects were given highest priority in which among the following plans?
[A] First Five Year Plan
[B] Second Five Year Plan
[C] Third Five Year Plan
[D] Fourth Five Year Plan

Correct Answer: A [First Five Year Plan]

35. India changed over to the decimal system of coinage in
[A]. April 1995
[B]. April 1957
[C]. April 1958
[D]. April 1959

Correct Answer: B

36. Which among the following is the oldest insurance company of India?
[A] Oriental Life Insurance Company
[B] Life Insurance Company of India
[C] General Assurance Company of India
[D] None of them

Correct Answer: A [Oriental Life Insurance Company]
Notes:
The Oriental Life Insurance Company was the first Life Insurance Company in India that was established in Calcutta in 1818, though it failed in 1834.

37. The association of the rupee with pound sterling as the intervention currency was broken in
[A]. 1990
[B]. 1991
[C]. 1992
[D]. 1993

Correct Answer: C

38. Indian Economy is :
[A] Socialistic Economy
[B] Gandhian Economy
[C] Mixed Economy
[D] Free Economy

Correct Answer: [C]

39. India's economic planning CANNOT be said to be :
[A] indicative
[B] imperative
[C] limited
[D] democratic

Correct Answer: [B]

40. Which one of the following bodies finalizes the Five Year Plan Proposals ?
[A] Planning Commission
[B] Union Cabinet
[C] National Development Council
[D] Ministry of Plannings

Correct Answer: [C]

41. Who is the Chairman of the Planning Commission in India ?
[A] President
[B] Vice President
[C] Prime Minister
[D] Finance Minister

Correct Answer: [C]

42. The Deputy Chairman of the Planning Commission :
[A] HRD Minister
[B] Finance Minister
[C] Holds the rank of a cabinet minister
[D] is an economist of repute

Correct Answer: [C]

43. In which one of the following Five Year Plans the actual growth performance in India in respect of GDP (at factor cost) was less than the target set ?
[A] Sixth Five Year Plan
[B] Seventh Five Year Plan
[C] Eighth Five Year Plan
[D] Ninth Five Year Plan

Correct Answer: [D]

44. The Second Five Year Plan laid more stress upon:
[A] Industrialisation
[B] Removing poverty
[C] Self-reliance
[D] Agriculture

Correct Answer: [A]


45. A rolling plan is a plan for:
[A] One year
[B] Two years
[C] Three years
[D] Five years

CoreCor Answer: [A]

46. Rolling plan was designed for the period:
[A] 1974-79
[B] 1978-83
[C] 1980-85
[D] 1985-90

Correct Answer: [B]

47. Major percentage of working population of India is engaged in:
[A] tertiary sector
[B] secondary sector
[C] private sector
[D] public sector

Correct Answer: [C]

48. Planning in India derives its objectives from:
[A] Preamble
[B] Fundamental Duties
[C] Fundamental Rights
[D] Directive Principles of State policy

Correct Answer: [D]

49. The contribution of agriculture to India’s economy is:
[A] Constant
[B] Increasing
[C] Decreasing
[D] None of these

Correct Answer: [C]

50. India opted for ‘Mixed Economy’ in:
[A] Framing of the Constitution
[B] Industrial Policy of 1948
[C] Second Five Year Plan
[D] None of the above

Answer: Option [B]


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