MCQs on Indian Economy

An economy can be defined as a process of making economic choices on how the country utilises its resources to manufacture and allocate its goods and services. The Indian Economy which was known as an underdeveloped economy has now become a developing economy, however, it is described as a mixed economy.

Given below are essential MCQs on Indian Economy to analyze your understanding of the topic. The answers are also given for your reference.

Indian Economy MCQs:

1. What option does the central government does not include in development expenditure?

A) Grant to States

B) Expenditure on Social and Community Services

C) Expenditure on Economic Services

D) Defence Expenditure

Answer: D

2. Depreciation is defined as

A) destruction of a plant in a fire accident

B) loss of equipment over time due to wear and tear

C) closure of a plant due to labour trouble

D) closure of a plant due to lockout

Answer: B

3. In general, deficit financing can create inflation, but it can be checked if.

A) Government expenditure increases the aggregate supply in the aggregate demand ratio

B) All the investment is indicated as payment on national debt only

C) Only aggregate demand is increased

D) All of the above

Answer: D

4. On July 12, 1982, The ARDC collaborated with


B) EXIM Bank


D) None of the above

Answer: A

5. What is the main cause of exports surplus?

A) Country’s stringent import policy

B) Developments in national and international markets

C) Country’s exports promotion value

D) None of the above

Answer: B

6. If RBI reduces the cash reserve ratio, the credit creation will

A) No impact

B) Decrease

C) Increase

D) None of the above

Answer: C

7. Which option is not mentioned in a firms balance sheet?

A) Cash held at the bank

B) Revenue from sales of the company’s products

C) Total issued capital

D) Value of stocks of raw materials held

Answer: B

8. The state financial corporation in the State bank of India gives assistance especially to

A) Medium and Small-scale Industries

B) Large-scale Industries

C) Cottage Industry

D) Agricultural Farms

Answer: A

9. The central co-operative banks are directly associated with

A) Central Government

B) Land Development Banks

C) State Co-operative Banks

D) Farmers

Answer: C

10. The first complete Indian Bank was established in the year.

A) 1794

B) 1894

C) 1896

D) 1902

Answer: B

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