790+ Indian Economy Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Bachelor of Arts (BA) , Bachelor of Arts in Economics (BA Economics) , Union Public Service Commission (UPSC) .

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401.	Fiscal deficit in the Union Budget means: [IAS 1994]
A.	the difference between current expenditure and current revenue
B.	net increase in Union Government's borrowings from the Reserve Bank of India
C.	the sum of budgetary deficit and net increase in internal and external borrowings
D.	the sum of monetised deficit and budgetary deficit
Answer» C. the sum of budgetary deficit and net increase in internal and external borrowings

402.	Among the structural changes which of the following is not wholly welcome?
A.	Increase in the share of construction in the GNP
B.	Relative contribution of agriculture to our GNP is declining
C.	Marked improvement in the contribution of manufacturing to the GNP
D.	Substantial increase in the percentage contribution of public administration and defence to GDP
Answer» D. Substantial increase in the percentage contribution of public administration and defence to GDP

403.	Net factor income from abroad added to GDP gives:
A.	GNP
B.	NNP
C.	NDP
D.	per capita income
Answer» A. GNP

404.	Gross National Income is always more than Net National Income because it includes:
A.	foreign income
B.	capital consumption allowance
C.	indirect taxes
D.	direct taxes
Answer» B. capital consumption allowance

405.	Gross National Product at market prices is defined as : [CPO AC 2003]
A.	the market value of all final goods and services produced in an economy taking into account net factor income from abroad
B.	the market value of all final goods and services produced in an economy
C.	the market value of all final goods and services produced in an economy plus indirect taxes
D.	the market value of all final goods and services produced in an economy plus indirect taxes minus subsidies
Answer» A. the market value of all final goods and services produced in an economy taking into account net factor income from abroad

406.	National income refers to: [CPO SI 2002]
A.	money value of goods 'and services produced in a country during a year.
B.	money value of stocks and shares of a country during a year.
C.	money value of capital goods produced by a country during a year.
D.	money value of consumer goods produced by a country during a year.
Answer» A. money value of goods 'and services produced in a country during a year.

407.	National income calculated at current prices in India has shown a tendency to rise at a faster rate than national income at constant prices. This is because:
A.	India's population has been rising fast
B.	General price level in the economy has been rising rapidly
C.	Statistically manipulations are employed by the Planning
D.	Base year chosen is an abnormal year
Answer» B. General price level in the economy has been rising rapidly

408.	The measure of a worker's real wage is : [CPO SI 2002]
A.	the change in his productivity over a given time
B.	his earning after deduction at source
C.	his daily earnings
D.	the purchasing power of his earnings
Answer» D. the purchasing power of his earnings

409.	Real national income denotes:
A.	national income at constant prices
B.	per capita income
C.	national income at current prices
D.	net factor income
Answer» A. national income at constant prices

410.	Under VAT, how many slabs are there?
A.	3
B.	4
C.	2
D.	5
Answer» B. 4

411.	Which one of the following forms the largest share of deficit in Govt. of India budget? [UP PCS 2002]
A.	Primary deficit
B.	Fiscal deficit
C.	Revenue deficit
D.	Budgetary deficit
Answer» B. Fiscal deficit

413.	One of the following leads to underestimation of national income in India: 1. Inflation 2. Devaluation 3. Non-Monetary consumption 4. Large unorganized sector Choose correct answer from:
A.	1, 2, 3 and 4
B.	1, 3 and 4
C.	3 and 4
D.	2, 3 and 4
Answer» C. 3 and 4

414.	Which of the following schemes was intended to tap the black money?
A.	SBI Deposit Scheme
B.	UTI Bonds
C.	Long term Operations Scheme
D.	India Development Bonds
Answer» D. India Development Bonds

415.	According to the law of demand, when:
A.	price increases demand decreases
B.	price decreases demand decreases
C.	price increases demand increases
D.	price decreases demand does not change
Answer» A. price increases demand decreases

416.	Which one of the following situations makes a firm most efficient? [CDS 2002]
A.	Falling average costs
B.	Rising average costs
C.	Constant average costs
D.	Lowest average costs
Answer» D. Lowest average costs

412.	Gross National Product is less than Gross Domestic Product depending upon whether:
A.	indirect taxes are more than subsidies
B.	depreciation is included or not
C.	net factor income from abroad is positive or negative
D.	indirect taxes are less than subsides
Answer» C. net factor income from abroad is positive or negative

417.	National Income total reveals: 1. Production side of the economy 2. Distribution side of the economy 3. Expenditure side of the economy Choose your answer from
A.	1 only
B.	2 only
C.	1, 2 and 3
D.	3 only
Answer» B. 2 only

418.	Octroi is levied and collected by:
A.	Centre
B.	State Government
C.	local bodies
D.	all the above
Answer» C. local bodies

419.	What is meant by 'Underwriting', the term frequently used in financial sector? [Punjab & Sindh Bank 2011]
A.	Under valuation of the assets.
B.	The Act of taking on a risk for a fee.
C.	Giving a Guarantee that a loan will not become a bad loan.
D.	The act of permission to float an IPO.
Answer» A. Under valuation of the assets.

420.	What is a fiscal deficit? [Punjab & Sindh Bank 2011]
A.	It is a gap between the values of the exports and imports
B.	It is a gap between exports and imports minus external borrowings
C.	It is a gap between total expenditure and total receipts of the Govt.
D.	It is a gap between total receipts minus External Borrowing
Answer» C. It is a gap between total expenditure and total receipts of the Govt.

421.	Which one of the following organizations/agencies' are involved in drafting the Union Budget of India? [Punjab & Sindh Bank 2011]
A.	The Planning Commission only
B.	The Comptroller and Auditor General only
C.	Administrative Ministries only
D.	(1) & (2) only
Answer» C. Administrative Ministries only

422.	The highest weight in the revised Whole Sale Price Index, implemented from September 2010 is given to which of the following item? [Corporation Bank PO 2011]
A.	Fuel
B.	Food items
C.	Manufactured items
D.	Primary Articles
Answer» B. Food items

423.	Which one of the following is the updated base for Wholesale Price Index (WPI) ? [Corporation Bank PO 2011]
A.	2002-2003
B.	2003-2004
C.	2004-2005
D.	2005-2006
Answer» C. 2004-2005

424.	Under increasing returns the supply curve is [SSC (10+2) 2010]
A.	positively sloped from left to right
B.	negatively sloped from left to right
C.	parallel to the quantity-axis
D.	parallel to the price-axis
Answer» A. positively sloped from left to right

425.	Development is : [CDS 1999]
A.	synonymous with economic growth
B.	narrower than economic growth
C.	wider than economic growth
D.	not related to economic growth
Answer» C. wider than economic growth

790+ Indian Economy Solved MCQs

Fiscal deficit in the Union Budget means: [IAS 1994]

Among the structural changes which of the following is not wholly welcome?

Net factor income from abroad added to GDP gives:

Gross National Income is always more than Net National Income because it includes:

Gross National Product at market prices is defined as : [CPO AC 2003]

National income refers to: [CPO SI 2002]

National income calculated at current prices in India has shown a tendency to rise at a faster rate than national income at constant prices. This is because:

The measure of a worker's real wage is : [CPO SI 2002]

Real national income denotes:

Under VAT, how many slabs are there?

Which one of the following forms the largest share of deficit in Govt. of India budget? [UP PCS 2002]

Gross National Product is less than Gross Domestic Product depending upon whether:

One of the following leads to underestimation of national income in India: 1. Inflation 2. Devaluation 3. Non-Monetary consumption 4. Large unorganized sector Choose correct answer from:

Which of the following schemes was intended to tap the black money?

According to the law of demand, when:

Which one of the following situations makes a firm most efficient? [CDS 2002]

National Income total reveals: 1. Production side of the economy 2. Distribution side of the economy 3. Expenditure side of the economy Choose your answer from

Octroi is levied and collected by:

What is meant by 'Underwriting', the term frequently used in financial sector? [Punjab & Sindh Bank 2011]

What is a fiscal deficit? [Punjab & Sindh Bank 2011]

Which one of the following organizations/agencies' are involved in drafting the Union Budget of India? [Punjab & Sindh Bank 2011]

The highest weight in the revised Whole Sale Price Index, implemented from September 2010 is given to which of the following item? [Corporation Bank PO 2011]

Which one of the following is the updated base for Wholesale Price Index (WPI) ? [Corporation Bank PO 2011]

Under increasing returns the supply curve is [SSC (10+2) 2010]

Development is : [CDS 1999]

In the short run, a producer continues his production as long as he covers: [Asstt Grade 1992]

Invisible trade is a trade: [IAS 1992]

What is 'Recession'?

A Multinational is: [CDS 1991]

The Indian budget includes:

Funds belonging to Government of India are kept in: 1. Consolidated Fund of India 2. Public Account Fund of India 3. Contingency Fund of India

A deflator is a technique of: [IAS 1992]

Buyer's market denotes the place where:

Deficit financing is spending:

Main bearers of the burden of indirect tax are:

A tax that takes away a higher proportion of one's income as the income rises is termed as [I. Tax & Central Excise 1990]

The Indian income tax is : 1. direct 2. progressive 3. indirect 4. proportional

Excise Duties are taxes on :

The minimum effect of Direct Taxes is on :

Companies pay Corporation Tax on their: [UDC 1993]

In a country like India, why should an increase of direct taxes be preferred to an increase in indirect taxes?

Fresh evalution of every item of expenditure from the very beginning of each financial year is called: [SBI PO 1991]

The rate of growth of per capita income is equal to:

Consider the following items of wholesale price index: [Asstt Commt 2010] 1. Primary articles 2. Fuel, power, lights and lubricants 3. Manufacturing products Arrange the above items in descending order in terms of their weightage in calculating wholesale price index

When the Reserve Bank of India announces an increase of the Cash Reserve 'Ratio, what does it mean? [IAS 2010]

In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years? [IAS 2010]

Consider the following statements: In India, taxes on transactions in Stock Exchanges and Futures Markets are 1. levied by the Union 2. collected by the States Which of the statements given above is/are correct? [IAS 2010]

Which of the following statements is/are correct? 1. If a country is experiencing increase in its per capita GDP, its GDP must necessarily be growing. 2. If a country is experiencing negative inflation, its GDP must be decreasing. Select the correct answer using the code given below: [CDS 2012]

One of the following leads to underestimation of national income in India:
1. Inflation
2. Devaluation
3. Non-Monetary consumption
4. Large unorganized sector
Choose correct answer from:

National Income total reveals:
1. Production side of the economy
2. Distribution side of the economy
3. Expenditure side of the economy
Choose your answer from

Funds belonging to Government of India are kept in:
1. Consolidated Fund of India
2. Public Account Fund of India
3. Contingency Fund of India

The Indian income tax is :
1. direct
2. progressive
3. indirect
4. proportional

Which of the following statements is/are correct?
1. If a country is experiencing increase in its per capita GDP, its GDP must necessarily be growing.
2. If a country is experiencing negative inflation, its GDP must be decreasing.
Select the correct answer using the code given below: [CDS 2012]

426.	In the short run, a producer continues his production as long as he covers: [Asstt Grade 1992]
A.	variable cost
B.	fixed cost
C.	average cost
D.	marginal cost
Answer» B. fixed cost

427.	Invisible trade is a trade: [IAS 1992]
A.	of government with public institutions
B.	of the services like the bank, marine companies and shipping companies
C.	of corporate and financial institutions with government
D.	of government with other countries
Answer» B. of the services like the bank, marine companies and shipping companies

428.	What is 'Recession'?
A.	Rise in the cost of production, especially because of wage increase
B.	Increase in money supply without a matching increase in production
C.	Reduction in production and employment for want of sufficient demand for goods
D.	None of these
Answer» C. Reduction in production and employment for want of sufficient demand for goods

429.	A Multinational is: [CDS 1991]
A.	a company operating in several countries
B.	a company having shareholders from more than one country
C.	a company which does charitable work in poor countries
D.	a company that operates only in those countries that do not have import restrictions
Answer» A. a company operating in several countries

430.	The Indian budget includes:
A.	revised estimates for the current year
B.	budget estimates for the following year
C.	actual figures of the preceding year
D.	all of these
Answer» D. all of these

431.	Funds belonging to Government of India are kept in: 1. Consolidated Fund of India 2. Public Account Fund of India 3. Contingency Fund of India
A.	1 and 2
B.	2 and 3
C.	1 and 3
D.	1, 2 and 3
Answer» D. 1, 2 and 3

432.	A deflator is a technique of: [IAS 1992]
A.	adjusting for changes in price level
B.	adjusting for change in commodity
C.	accounting for higher increase of GNP
D.	accounting for decline of GNP
Answer» A. adjusting for changes in price level

433.	Buyer's market denotes the place where:
A.	the supply exceeds the demand
B.	the demand exceeds the supply
C.	the demand and supply are well balanced
D.	commodities are available at competitive rates
Answer» B. the demand exceeds the supply

434.	Deficit financing is spending:
A.	by getting foreign aid
B.	less than what is needed
C.	in excess of revenue
D.	by borrowing from abroad
Answer» C. in excess of revenue

435.	Main bearers of the burden of indirect tax are:
A.	manufacturers
B.	traders
C.	consumes
D.	tax payers
Answer» C. consumes