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Indian Economy MCQs

The Economy of India is portrayed as a center pay creating a market economy. It is the world's 6th biggest economy by ostensible GDP and the third-biggest by purchasing power parity (PPP). As indicated by the International Monetary Fund (IMF), for each capita pay premise, India is positioned 145th by GDP (ostensible) and 122nd by GDP (PPP). From freedom in 1947 until 1991, progressive legislatures advanced protectionist financial strategies, with broad state mediation and monetary guideline. This is described as dirigism, as the License Raj. The finish of the Cold War and an intense equilibrium of installments emergency in 1991 prompted the reception of an expansive financial progression in India. Since the beginning of the 21st century, yearly normal GDP development has been 6% to 7%, and from 2013 to 2018, India was the world's quickest developing significant economy, outperforming China. All things considered, India was the biggest economy on the planet for the greater part of the two centuries from the first until the nineteenth century.

Indian Economy MCQs: This section contains multiple-choice questions and answers on the Indian Economy. It will help the students to prepare well for their exams.

List of Indian Economy MCQs

1. Who presents the Union Budget of India and in which house?

  1. Finance Minister of India; Lok Sabha
  2. Prime Minister of India; Rajya Sabha
  3. Cabinet Secretary; Both Lok Sabha and Rajya Sabha
  4. President of India; in the joint session of Parliament

Answer: A) Finance Minister of India; Lok Sabha

Explanation:

The Union Budget of India alluded to as the Annual Financial Statement in Article 112 of the Constitution of India, is the yearly spending plan of the Republic of India, introduced every year on the absolute first day of February by the Finance Minister of India in Parliament.

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2. When was the first budget of Independent India presented and by whom?

  1. Manmohan Singh
  2. Jawaharlal Nehru
  3. R K Shanmukham Chetty
  4. D. Tiwari

Answer: C) R K Shanmukham Chetty

Explanation:

The India first union budget of independent India was introduced by R. K. Shanmukham Chetty on 26 November 1947. Complete incomes remained at ₹171.15 crores, and the monetary shortage was ₹24.59 crore.

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3. When is the Union Budget of India presented?

  1. First Day of January
  2. Last Day of January
  3. First Day of March
  4. First Day of February

Answer: D) First Day of February

Explanation:

The Union Budget of India alluded to as the Annual Financial Statement in Article 112 of the Constitution of India, is the yearly spending plan of the Republic of India, introduced every year on the absolute first day of February by the Finance Minister of India in Parliament.

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4. Which Budget is known as the Black Budget of India?

  1. 1973-74
  2. 1950-51
  3. 1948-49
  4. 1991-92

Answer: A) 1973-74

Explanation:

The 1973-74 spending plan was introduced during serious monetary pressure, coming directly following a bombed rainstorm and the 1971 Bangladesh war. It was named the Black Budget for the deficiency of Rs 550 crore it showed and the arrangement to nationalize general insurance agencies and coal mineshafts.

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5. In which budget was service tax introduced in India?

  1. Budget 1997-98
  2. Budget 1973-74
  3. Budget 1994-95
  4. Budget 1990-91

Answer: C) Budget 1994-95

Explanation:

The arrangements connecting with Service Tax were carried into power with impact from July 1, 1994, vide part V of the Finance Act, 1994. It stretches out to the entire of India aside from the State of Jammu and Kashmir.

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6. The Purpose of Central & State Warehousing Corporation is?

  1. To Provide Storage Facilities
  2. To Provide Raw Materials
  3. Provide New Farming Tools
  4. Provide Fertilisers

Answer: A) To Provide Storage Facilities

Explanation:

The targets of the Corporation is to procure/construct Warehouses for the capacity of agrarian produce, seeds, composts, manures, and other advised wares. To set up particular stockrooms and Container Freight Station/Inland Clearance Depots for putting away modern/exportable and imported merchandise.

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7. Which expense is not included in the development expenditure?

  1. State Grants
  2. Economic Expenses
  3. Defence Expenses
  4. Social Community Expenses

Answer: C) Defence Expenses

Explanation:

Development Expenditure is the cash spent by the government on formative and government assistance programs. Use of financial assistance, consumption on friendly and socialist administrations, awards to states are instances of formative uses. Among the given choices, protection use isn't an illustration of formative use.

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8. What is Deficit Financing?

  1. When government spends more money than it receives as revenue
  2. When expenses exceed revenue and indicate the financial health of a country
  3. Shortage of funds with the government to maintain its day-to-day affairs
  4. The shortfall in a government's income compared with its spending

Answer: A) When government spends more money than it receives as revenue

Explanation:

Deficit financing is the training where an administration spends more cash than it gets as income, the distinction being made up by acquiring or printing new assets. Even though financial plan shortfalls might happen for a considerable length of time, the term, as a rule, alludes to a cognizant endeavor to invigorate the economy by bringing down charge rates or expanding government uses.

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9. What is Budget Deficit?

  1. When expenses exceed revenue and indicate the financial health of a country
  2. Shortage of funds with the government to maintain its day-to-day affairs
  3. The shortfall in a government's income compared with its spending
  4. Difference between the current year's fiscal deficit and interest payment on previous borrowings

Answer: A) When expenses exceed revenue and indicate the financial health of a country

Explanation:

A budget deficit happens when costs surpass income and show the monetary strength of a country. The public authority for the most part utilizes the term financial plan deficiency when alluding to spending rather than organizations or people. Gathered deficiencies structure public obligation.

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10. What is Revenue Deficit?

  1. When expenses exceed revenue and indicate the financial health of a country
  2. Shortage of funds with the government to maintain its day-to-day affairs
  3. The shortfall in a government's income compared with its spending
  4. Difference between the current year's fiscal deficit and interest payment on previous borrowings

Answer: B) Shortage of funds with the government to maintain its day-to-day affairs

Explanation:

A Revenue Deficit happens when acknowledged net gain is not exactly the projected total compensation. This happens when the genuine measure of income or potentially the real measure of uses doesn't relate to planned income and uses. This is something contrary to an income excess, which happens when the real measure of total compensation surpasses the projected sum.

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11. What is a Fiscal Deficit?

  1. When expenses exceed revenue and indicate the financial health of a country
  2. Shortage of funds with the government to maintain its day-to-day affairs
  3. The shortfall in a government's income compared with its spending
  4. Difference between the current year's fiscal deficit and interest payment on previous borrowings

Answer: C) The shortfall in a government's income compared with its spending

Explanation:

A Fiscal Deficit is a setback in an administration's pay contrasted and its spending. The public authority that has a monetary shortfall is spending too far in the red. A Fiscal Deficit is determined as a level of (GDP), or just as complete dollars spent in abundance of pay. Regardless, the pay figure incorporates just assessments and different incomes and bars cash acquired to make up the deficit.

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12. What is a Primary Deficit?

  1. When expenses exceed revenue and indicate the financial health of a country
  2. Shortage of funds with the government to maintain its day-to-day affairs
  3. The shortfall in a government's income compared with its spending
  4. Difference between the current year's fiscal deficit and interest payment on previous borrowings

Answer: D) Difference between the current year's fiscal deficit and interest payment on previous borrowings

Explanation:

Primary Deficit alludes to the contrast between the current year's monetary shortage and interest installment on past borrowings. It demonstrates the getting prerequisites of the public authority, barring interest. It additionally shows the number of the public authority's costs, other than interest installment, that can be met through borrowings. The primary deficit can be determined by tracking down the contrast between the current year's monetary shortage and premium installment on the borrowings for the past year. A financial shortfall is determined as a level of total national output (GDP), or just as absolute dollars spent in abundance of pay. Regardless, the pay figure incorporates just charges and different incomes and rejects cash acquired to make up the deficit.

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13. What is Effective Revenue Deficit?

  1. The shortfall in a government's income compared with its spending
  2. Difference between the current year's fiscal deficit and interest payment on previous borrowings
  3. Difference between revenue deficit and grants for creation of capital assets
  4. Purchase of government bonds by the central bank to finance the spending needs of the government

Answer: C) Difference between revenue deficit and grants for creation of capital assets

Explanation:

The idea of an effective revenue deficit has been proposed by the Rengarajan Committee on Public Expenditure. It is intended to deduct the cash utilized out of getting to back capital consumption. The idea has been acquainted with learning the real deficiency in the income account after adapting to consumption of capital nature. Zeroing in on this will help in diminishing the destructive part of income deficiency and make space for expanded capital spending.

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14. What is Monetised Deficit?

  1. The shortfall in a government's income compared with its spending
  2. Difference between the current year's fiscal deficit and interest payment on previous borrowings
  3. Difference between revenue deficit and grants for creation of capital assets
  4. Purchase of government bonds by the central bank to finance the spending needs of the government

Answer: D) Purchase of government bonds by the central bank to finance the spending needs of the government

Explanation:

Monetised Deficit is the money-related help the Reserve Bank of India (RBI) reaches out to the Center as a feature of the public authority's acquiring program. At the end of the day, the term alludes to the acquisition of government bonds by the national bank to fund the spending needs of the public authority.

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15. How can the inflation created due to deficit financing be rectified?

  1. If government expenditure increases the aggregate supply in the aggregate demand ratio
  2. If all the investment is indicated as payment on national debt only
  3. If only the aggregate demand is increased
  4. All of the above

Answer: D) All of the above

Explanation:

A deficiency is a sum by which the uses in a financial plan surpass the pay. A Government Deficit is how much cash in the set spending plan by which the public authority consumption surpasses the public authority pay sum. This deficiency gives a sign of the monetary wellbeing of the economy. To lessen the shortage or the hole between the uses and pay, the public authority might scale back specific uses and increment income-producing exercises.

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16. NABARD merged with which organization in 1982?

  1. RBI
  2. Government
  3. ARDC
  4. EXIM Bank

Answer: C) ARDC

Explanation:

NABARD was set up on the proposals of the B.Sivaramman Committee (by Act 61, 1981 of Parliament) on 12 July 1982 to execute the National Bank for Agriculture and Rural Development Act 1981. It supplanted the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the chief organizations giving Rs.14080 crores (100 percent share). The approved offer capital is Rs.30,000 crore. Worldwide partners of NABARD incorporate World Bank-subsidiary associations and worldwide formative offices working in the field of horticulture and country advancement. These associations help NABARD by prompting and giving financial guide for the upliftment of individuals in the country regions and advancing the farming system.

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17. How is Export Surplus caused?

  1. Due to the country's stringent import policy
  2. Due to the Developments in national and international markets
  3. Due to the country's exports promotion value
  4. If only the aggregate demand is increased

Answer: B) Due to the Developments in national and international markets

Explanation:

An export surplus is a financial proportion of a positive equilibrium of exchange, where a nation's commodities surpass its imports. An exchange excess happens when the consequence of the above estimation is positive. An exchange excess addresses a net inflow of homegrown money from unfamiliar business sectors.

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18. How does Credit Creation Increase?

  1. If RBI increases cash reserve
  2. If RBI increases the cash reserve ratio
  3. If RBI reduces the cash reserve ratio
  4. If RBI reduces cash reserve

Answer: C) If RBI reduces the cash reserve ratio

Explanation:

Because of a decrease in the prerequisites of the CRR banks will have more assets with them to advance their loaning (credit creation), which will eventually prompt an expansion in their loaning.

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19. Which Industry gets special assistance from the state financial corporation in the State Bank of India?

  1. Large Scale Industries
  2. Cotton Industry
  3. Agricultural Industry
  4. Medium and Small Scale Industries

Answer: D) Medium and Small Scale Industries

Explanation:

In India, the state Financial Corporation has given help to essentially foster medium and limited scope ventures in the State Bank of India.

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20. When was the first Indian Bank established in India?

  1. 1947
  2. 1958
  3. 1770
  4. 1950

Answer: C) 1770

Explanation:

The first bank established in India was the Bank of Hindustan, which was started in 1770.

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More Commerce MCQs
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Capital Market MCQs Goods & Services Tax (GST) MCQs
Cooperative Society MCQs Sole Proprietorship MCQs
Depreciation MCQs All Commerce MCQs

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