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 depart
ment 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 pressu
re
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 deflati
on 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) 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
2) Marginal product is rising
3) Marginal product is falling
4) Marginal product is constant
Ans: 2) Marginal product is rising