Indian Economy Issues And Challenges MCQ with Answers – Part-1
Indian Economy Issues And Challenges MCQ with Answers – Part-1: An Economy is the process of making economic decisions on how a country uses its resources to produce and distribute goods and services. The Indian Economy, once considered underdeveloped, has now transitioned into a developing economy. It is commonly referred to as a mixed economy.
Here are some important multiple-choice questions (MCQs) on the Indian Economy to assess your comprehension of the subject. The answers are provided for your convenience.
Indian Economy Issues And Challenges MCQ with Answers – Part-1
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1. The best indicator of economic development of any country is:
A. Agriculture
B. Transport
C. Gross Production
D. Per Capita Income
Answer: D. Per Capita Income
2. Which of the following explains economic growth?
A. Increase in per capita production
B. Increase in per capita real income
C. Structural change in the economy
D. All the above are right
Answer: D. All the above are right
3. Economic development is characterized by
A. Structural change in the economy
B. Change in the occupational structure
C. Both a and b
D. None of the above
Answer: C. Both a and b
4. An underdeveloped economy is characterized by
A. High per capita real income
B. Large proportion of labor force in the tertiary sector
C. State of deprivation of large proportion of population
D. All the above
Answer: C. State of deprivation of large proportion of population
5. Scarcity of capital, technological backwardness and unemployment are generally found in:
A. Developed countries
B. Asian Countries
C. Underdeveloped countries
D. None of the above
Answer: C. Underdeveloped countries
6. Which of the following denotes an underdeveloped economy?
A. High level of inequality
B. Low level of capital productivity
C. A relatively closed economy
D. All the above
Answer: D. All the above
7. Which of the following estimates National Income in India?
A. Central Statistical Organization
B. National Income Committee
C. Planning Commission
D. Reserve bank of India
Answer: A. Central Statistical Organization
8. National Income is the:
A. Net National Product at market price
B. Net National Product at factor cost
C. Net Domestic Product at market price
D. Net Domestic Product at factor cost
Answer: C. Net Domestic Product at market price
9. Development means economic growth with:
A. Price Stability
B. Social Change
C. Inflation
D. Deflation
Answer: B. Social Change
10. To get the Net National Product, we deduct what from the Gross National Product:
A. Direct Taxes
B. Imports
C. Interim payments
D. Depreciation
Answer: D. Depreciation
Indian Economy Issues And Challenges MCQ with Answers – Part-1
11. What is Gross National Product:
A. The total output of goods and services produced by the country’s economy
B. The total domestic and foreign output claimed by residents of the country
C. The sum of gross domestic product and investment
D. National Income minus National Expenditure
Answer: B. The total domestic and foreign output claimed by residents of the country
12. National Income ignores:
A. Sales of a firm
B. Salary of Employees
C. Exports of the IT Sector
D. Sale of land
Answer: D. Sale of land
13. The most simple and popular method of measuring economic development is to calculate the trend of Gross National Product (GNP) at:
A. Current Prices
B. Constant Prices
C. Both of the above
D. None of the above
Answer: B. Constant Prices
14 When and by whom was HDI introduced?
A. In 1990 by UNDP
B. In 1989 by World Bank
C. In 1990 by UNO
D. In 1989 by IMF
Answer: A. In 1990 by UNDP
15 When National Income is calculated with reference to a base year, it is called:
A. Nominal National Income
B. Net National Income
C. Real National Income
D. Gross National Income
Answer: C. Real National Income
16 When and by whom was HDI introduced?
A. In 1990 by UNDP
B. In 1989 by World Bank
C. In 1990 by UNO
D. In 1989 by IMF
Answer: A. In 1990 by UNDP
17 The Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development like ——-
A. Longevity
B. Educational Attainment
C. Standard of Living
D. All of the above
Answer: D. All of the above
18 What measures Longevity-a long and healthy life in an economy?
A. Life Expectancy Index
B. Education Index
C. GNI Index
D. None of the above
Answer: A. Life Expectancy Index
19 What measures Literacy rate- being knowledgeablein an economy?
A. Life Expectancy Index
B. Education Index
C. GNI Index
D. None of the above
Answer: B. Education Index
20 What measures a decent standard of livingin an economy?
A. Life Expectancy Index
B. Education Index
C. GNI Index
D. None of the above
Answer: C. GNI Index
Indian Economy Issues And Challenges MCQ with Answers – Part-1
21 Which Five Year Plan gave emphasis on removal of poverty for the first time?
A. Fourth
B. Fifth
C. Sixth
D. Seventh
Answer: B. Fifth
22 The age composition of Indian population is bottom heavy. It implies that ratio of persons in age group 0-14 is relatively high. Children below 14 years in 2019 were—-
A. 14%
B. 40%
C. 30%
D. 26%
Answer: D. 26%
23 The Life expectancy in India has increased up to ———in 2020.
A. 70 years
B. 59 years
C. 33 years
D. 48 years
Answer: A. 70 years
24 The major cause of population explosion in India is …………
A. Universality of marriage
B. Religious & social superstitions
C. Lack of education
D. All Above
Answer: D. All Above
25 As per human development report 2020India ranks at ———— out of 189 indicating ‘Inequality and deprivation continues to be high in the country’.
A. 92
B. 131
C. 74
D. 112
Answer: B. 131
26 The HDI fails to show the wide discrepancies of ————–within a country.
A. Political parties
B. Production of different sectors
C. Income and gender bias
D. None
Answer: C. Income and gender bias
27 Acc. to the poverty lines of the World Bank people earning & spending less than —– a day in India are considered living below subsistence level.
A. U.S. dollar 2.00
B. U.S. dollar 1.25
C. U.S. dollar 5.00
D. None of the above
Answer: A. U.S. dollar 2.00
28 If in an economy most of the people are living below subsistence level, it is called:
A. Relative poverty
B. Absolute poverty
C. Multidimensional poverty
D. All of the above
Answer: B. Absolute poverty
29 If in an economy there is a huge gap in the level of incomes of its people, it is called:
A Relative poverty
B Absolute poverty
C Multidimensional poverty
D All of the above
Answer: A Relative poverty
30 The MPI identifies ————–across health, education and living standards
A. Achievements
B. Failures
C. deprivations
D. None
Answer: C. deprivations
Indian Economy Issues And Challenges MCQ with Answers – Part-1
31. Steel is a …………. industrial sector.
A. Labor-intensive
B. capital-intensive
C. Both
D. None
Answer: B. capital-intensive
32. Railways are naturally the ———– of transportation for large scale industry like steel.
A. Neglected mode
B. preferred mode
C. preferred mode
D. None
Answer: C. preferred mode
33. Solid wastes and emissions like GHGs are byproducts of the steel manufacturing process and result in———–.
A. Water pollution
B. environmental pollution
C. soil pollution
D. None
Answer: B. environmental pollution
34. Regional disparity in per capita income in India has increased in the post-reform period due to factors.
A. Decline in the share of public investment
B. Change in policy regime regulating investment location
C. Poor governance and poor infrastructure
D. Allocation of funds by the central Government
Answer: B. Change in policy regime regulating investment location
35. First Industrial Policy Resolution was passed in ———– keeping in view speedy Industrial growth and various tax concessions to the Industry by the Govt.
A. 1956
B. 1987
C. 1991
D. 2014
Answer: A. 1956
36. First Industrial Policy Resolution provided more powers to the ————- for industrial development of India
A. Foreign sector
B. governmental machinery
C. Private sector
D. None
Answer: B. governmental machinery
37. In the year —–Industrial trade and Foreign Investment Policies were substantially liberalized.
A. 1956
B. 1987
C. 1991
D. 2014
Answer: C. 1991
38 The category of industries left to the ———-sector was kept under state control through a system of licenses under First Industrial Policy Resolution by the Govt.
A. Government
B. Private
C. Foreign
D. Social
Answer: B. Private
39 Sugar is a ———–industry, with multiple linkages from cane-growing to sugar and alcohol production.
A. labour-Intensive
B. capital-intensive
C. technology-based
D. None
Answer: B. capital-intensive
40 Indian government has come up with a number of export promotion policies for the textiles sector, like It has also allowed ————-in the sector under the automatic route.
A. 25%
B. 75%
C. 100% FDI
D. None
Answer: C. 100% FDI
Indian Economy Issues And Challenges MCQ with Answers – Part-1
41. The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry – readymade garments and made-ups – from ——
A. 0% to 1%.
B. 1% to 2%.
C. 2% to 3%.
D. 2% to 4%.
Answer: D. 2% to 4%.
42 India earns maximum foreign exchange by the export of?
A. Iron
B. Handloom
C. Textiles
D. Tea
Answer: A. Iron
43 The largest trading partner of India is _____.
A. Russia
B. China
C. America
D. Britain
Answer: B. China
44. High cost of sugarcane is due to——–, and
A. inefficient technology
B. uneconomic process of production
C. heavy excise duty result in high cost of manufacturing.
D. All Above
Answer: D. All Above
45. In India, the vast majority of ethanol is produced from sugarcane molasses, a by-product of ——-
A. Sugar
B. Cotton
C. Cement
D. Steel
Answer: A. Sugar
46 The major objectives of NITI Aayog are to –
A. provide technical advice to the Centre and State
B. design strategic and long-term policies/ programmes for Govt.
C. Both of above
D. None
Answer: C. Both of above
47 Planning is essentially a way of organizing and utilizing the resources of a country to get maximum advantage in terms of defined social ends.
A. Growth with justice and equity
B. Faster, Sustainable and More Inclusive Growth
C. Faster and More Inclusive Growth
D. Cooperative & Competitive Federalism
Answer: A. Growth with justice and equit
48 The main objectives of Economic planning in India are–
A A higher rate of growth & Fuller employment opportunities
B A greater degree of economic equality than earlier possible under free enterprise
C Larger provision for capital formation to accelerate the rate of growth.
D All above
Answer: D All above
49 What was the motto/ slogan for Ninth Five Year Plan?
A. Growth with justice and equity
B. Faster, Sustainable and More Inclusive Growth
C. Faster and More Inclusive Growth
D. Cooperative & Competitive Federalism
Answer: A. Growth with justice and equity
50 India has one of the world’s highest number of billionaires but has extreme income inequality, being a vast informal economy, as barely ———-of Indians pay income taxes.
A. 5%
B. 2%
C. 20%
D. 15%
Answer: B. 2%
Indian Economy Issues And Challenges MCQ with Answers – Part-1
51 Atmanirbhar Bharat’ scheme focuses to enhance—-
A. import-substitution
B. export industrialization
C. both A & B
D. None
Answer: C. both A & B
52 Regional development means economic development of all the regions by———, and——-
A. exploiting various natural and human resources
B. increasing per capita income
C. increasing living standard of people
D. All above
Answer: D. All above
53 Modernization as a planning goal meant a change in the —————–set up of an economic activity, which could transform a feudal and colonial economy into a progressive and forward looking economy.
A. Structural and institutional
B. Industrial
C. Agricultural
D. None
Answer: A. Structural and institutional
54 Planning in India was ————-in nature, as it did not carry the burden of compulsion in socialist economies, nor did it give complete freedom as in capitalist economies.
A. directive
B. indicative
C. instructional
D. None
Answer: B. indicative
55 Indian planners chose the path of…………., where private sector was allowed to operate freely along with public sector.
A. capitalist economy
B. socialistic economy
C. mixed economy
D. None
Answer: C. mixed economy
56 The plan holiday in India was observed from 1966 to 1969.
A. 1951 to 1956
B. 1966 to 1969
C. 1966 to 1975
D. None
Answer: B. 1966 to 1969
57 Fifth Five Year Plan aimed at growth of ——————to provide large scale employment and remove poverty through Anti-poverty programs. Growth process in India started from here.
A. Industrialization
B. Globalization
C. Localization
D. None
Answer: A. Industrialization
58 Seventh Five Year Plan aimed at————-
A. Infrastructure
B. Import-substitution
C. both A & B
D. None
Answer: C. both A & B
59 The per capita income is ————-in the year 2020
A. USD 6390
B. USD 7120
C. USD 5000
D. None
Answer: A. USD 6390
Indian Economy Issues And Challenges MCQ with Answers – Part-1
60 Opportunities like Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) have been implemented to provide——
A. legal guarantee of wage employment to the adult members of rural households who are willing to do unskilled manual labour subject to a maximum of 100 days per household
B. Wages are paid according to State Minimum Wage rate notified under Minimum Wages Act 1948. The current wage rate is Rs.117/- for all unskilled work and Rs. 120/- for skilled labour.
C Equal payment for men and women
D. All above
Answer: D. All above
61.What option does the central government not include in the development expenditure?
A. Grants to states
B. Expenditure on social and community services
C. Expenditure on economic services
D. Defence expenditure
Answer: D. Defence expenditure
62. Which of the following defines depreciation?
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. Loss of equipment over time due to wear and tear
63. Generally, deficit financing can create inflation. However, 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 the aggregate demand is increased.
D. All of the above
Answer: D. All of the above
64.With which of the following did the ARDC merged with on 12 July, 1982?
A. NABARD
B. EXIM Bank
C. RBI
D. None of the above
Answer: A. NABARD
65. What is the main cause of the export surplus?
A. The country’s stringent import policy
B. Developments in national and international markets
C. The country’s exports promotion value
D. None of the above
Answer: B. Developments in national and international markets
66. If RBI reduces the cash reserve ratio, what will happen to the credit creation?
A. There will be no impact.
B. It will decrease.
C. It will increase.
D. None of the above
Answer: C. It will increase.
67. Which option is not mentioned in a firm’s balance sheet?
A).Cash held at the bank
B. Revenue from sales of the company’s products
C. Total issued capital
D. Value of the stocks of raw materials held
Answer: B. Revenue from sales of the company’s products
68. Which of the following does the state financial corporation in the State Bank of India give special assistance to?
A. Medium and small-scale industries
B. Large-scale industries
C. Cottage industry
D. Agricultural farms
Answer: A. Medium and small-scale industries
69. Which of the following are the central cooperative banks directly associated with?
A. Central government
B. Land development banks
C. State cooperative banks
D. Farmers
Answer: C. State cooperative banks
70. The first complete Indian Bank was established in which year?
A. 1794
B. 1894
C. 1896
D. 1902
Answer: B. 1894
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