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- Indian Economy Important Questions
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- Question 1 of 50
Government securities are considered liquid because they are:
A liquid asset is an asset that can easily be converted into cash in a short amount of time. Liquid assets include things like cash, money market instruments, and marketable securities. Government securities are quickly and easily marketable.
- Question 2 of 50
Which one of the following has facilitated globalisation of international trade the most?
Lowering the tariff barriers has facilitated globalisation of international trade the most. In International Business Tariff Barriers are related taxes imposed by Governments to control Import Export of one or more products with a particular country.
- Question 3 of 50
Entrepreneurial ability is a special kind of labour that:
Entrepreneurship is an individual’s ability to turn ideas into action. It includes creativity, innovation and risk-taking, as well as the ability to plan and manage projects in order to achieve objectives. Entrepreneurs have the ability to organize the process of production.
- Question 4 of 50
What has been a major feature of successful businesses in the past decade?
Successful companies, big and small, need good management, from the top-level down to people like foremen and shift supervisors. Quality leaders offer employees communication, a natural company culture, and clear goals and objectives.
- Question 5 of 50
What is narrow money?
The term “narrow money” typically covers the most liquid forms of money, i.e. currency (banknotes and coins) as well as bank-account balances that can immediately be converted into currency or used for cashless payments.
- Question 6 of 50
The Consumer Price Index (CPI) reflects:
A Consumer Price Index (CPI) is designed to measure the changes over time in general level of retail prices of selected goods and services that households purchase for the purpose of consumption. Such changes affect the real purchasing power of consumers’ income and their welfare.
- Question 7 of 50
The main source of long-term credit for a business unit is:
Companies issue stocks and bonds (securities) to the public to raise funds. A company decides to sell stock when it needs long-term access to capital.
- Question 8 of 50
Transfer earning or alternative cost is otherwise known as:
Alternative cost is otherwise known as Opportunity cost. Opportunity cost is the profit lost when one alternative is selected over another. The concept is useful simply as a reminder to examine all reasonable alternatives before making a decision.
- Question 9 of 50
The best measure to assess a country’s economic growth is:
Economists and statisticians use several methods to track economic growth. The most well-known and frequently tracked is the gross domestic product (GDP).
- Question 10 of 50
Which of the following concepts are most closely associated with J.M. Keynes?
The term “marginal efficiency of capital” was introduced by J.M. Keynes in his General Theory, and defined as “the rate of discount which would make the present value of the series of annuities given by the returns expected from the capital asset during its life just equal its supply price”.
- Question 11 of 50
Capital formation in an economy depends on:
The process of capital formation includes increasing savings, mobilization of savings, and investment of saving in such a way that will increase the stock of real capital.
- Question 12 of 50
If the tax rate increases with the higher level of income, it shall be called:
A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term progressive refers to the way the tax rate progresses from low to high, with the result that a taxpayer’s average tax rate is less than the person’s marginal tax rate.
- Question 13 of 50
In India, one-rupee coins and notes and subsidiary coins are issued by:
In India, one-rupee coins and notes and subsidiary coins are issued by the Central Government. The Indian 1-rupee note (₹1) is the smallest Indian banknote in circulation and the only one being issued by the Government of India, as all other banknotes in circulation are issued by the Reserve Bank of India.
- Question 14 of 50
Which is the highest body that approves Five Year Plans in the country?
The apex body gives final approval to a five-year plan in India is National Development Council (Rashtriya Vikas Parishad). The National Development Council (NDC) is the apex body for decision making and deliberations on development matters in India
- Question 15 of 50
In India, population density is defined as the number of persons:
Population density is the number of individuals per unit geographic area, for example, number per square meter, per hectare, or per square kilometer.
- Question 16 of 50
Prime cost is equal to:
A prime cost is the total direct costs of production, including raw materials and labor. Indirect costs, such as utilities, manager salaries, and delivery costs, are not included in prime costs. The prime cost equation is equal to the cost of raw materials plus direct labor. All the prime costs are variable costs and they are directly attributable. They do not include indirect variable costs and any fixed costs.
- Question 17 of 50
New capital issue is placed in:
The primary market is the part of the capital market that deals with the issuance and sale of equity-backed securities to investors directly by the issuer. Investors buy securities that were never traded before.
- Question 18 of 50
Bank deposits that can be withdrawn without notice are called:
Bank deposits that can be withdrawn without notice are called demand deposits. A demand deposit account (DDA) is a bank account from which deposited funds can be withdrawn at any time, without advance notice.
- Question 19 of 50
An expenditure that has been made and cannot be recovered is called:
A sunk cost is a cost that has already been incurred and cannot be recovered. Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken.
- Question 20 of 50
The practice of selling goods in a foreign country at a price below their domestic selling price is called:
Dumping, in economics, is a kind of injuring pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price below the normal price with an injuring effect.
- Question 21 of 50
Who propounded the market law?
J.B. Say propounded the market law. Say’s Law of Markets is theory from classical economics arguing that the ability to purchase something depends on the ability to produce and thereby generate income. Say reasoned that to have the means to buy, a buyer must first have produced something to sell.
- Question 22 of 50
A high growth rate of population is characterised by:
Population growth rate is affected by birth rates, death rates, immigration, and emigration. A high growth rate of population is characterised by high birth and low death rates.
- Question 23 of 50
Cartel is a form of:
A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. In a cartel type of collusive oligopoly, firms jointly fix a price and output policy through agreements.
- Question 24 of 50
“The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money.” — Who says this?
Sir John Hicks was a British economist. He is considered one of the most important and influential economists of the twentieth century. He was awarded the Nobel Prize in 1972 for his work in general equilibrium and welfare economics.
- Question 25 of 50
Capital-output ratio of a commodity measures:
Capital output ratio is the amount of capital needed to produce one unit of output. For example, suppose that investment in an economy, investment is 32% (of GDP), and the economic growth corresponding to this level of investment is 8%. Here, a Rs 32 investment produces an output of Rs 8.
- Question 26 of 50
Which one of the following items is not included in the current account of India’s Balance of Payments?
The current account balance of payments is a record of a country’s international transactions with the rest of the world. The nation’s current account is its imports, exports, net income, asset income, and direct transfers. Short-term commercial borrowings is not included in the current account of India’s Balance of Payments.
- Question 27 of 50
Engel’s Law states the relationship between:
Engel’s Law is an economic theory that describes the relationship between household income and a particular good or service expenditures. It states that as family income increases, the percentage of income spent on food decreases. Engel curve shows relationship between income and quantity demanded. The theory was introduced by German economist Ernst Engel in 1857.
- Question 28 of 50
Efficient allocation of resources is achieved to greatest extent under:
Efficient allocation of resources is achieved to greatest extent under Perfect competition. Efficient allocation of resources is a property of an efficient market whereby all goods and services are optimally distributed among buyers in an economy. It occurs when parties are able to use the accurate and readily available data reflected in the market to make decisions about how to utilize their resources.
- Question 29 of 50
Who said, “Supply creates its own demand.”?
“Supply creates its own demand” was said by JB Say. If a businessman produces a good, then he will be keen to sell it. This production creates wages for workers and income for the businessman. Therefore, the production has increased wealth and leads to demand for other goods.
- Question 30 of 50
The total number of nationalised banks in India is:
After the recent (2020) mergers of government banks, there are a total of 12 nationalized banks in India. They are: Punjab National Bank, Bank of Baroda, Bank of India, Central Bank of India, Canara Bank, Union Bank of India, Indian Overseas Bank, Punjab and Sind Bank, Indian Bank, UCO Bank, Bank of Maharashtra and State Bank Of India.
- Question 31 of 50
In which Five-Year Plan was self-reliance first emphasised?
From 1951 to 2017, the Indian economy was premised on the concept of planning. This was carried through the Five-Year Plans, developed, executed, and monitored by the Planning Commission. The Fourth Five-Year Plan (1969–1974) set before itself the two principal objectives – growth with stability and progress towards self-reliance.
- Question 32 of 50
International Monetary Fund (IMF) helps India with:
The World Bank Group works with developing countries to reduce poverty and increase shared prosperity, while the IMF serves to stabilize the international monetary system and acts as a monitor of the world’s currencies. When a country faces serious balance of payments problems because of structural weaknesses that require time to address, the IMF can assist through an Extended Fund Facility (EFF).
- Question 33 of 50
The demand curve for a Giffen good is:
Giffen goods are non-luxury items which generate higher demand when prices rise. Cheaper varieties of goods like bread, rice, potatoes, salt, etc. come under giffen goods. The demand curve for a Giffen good is upward rising.
- Question 34 of 50
Gandhiji believed that:
Gandhiji believed that means Justify end. For Gandhi, the end is satya or truth which requires no justification and the means- ahimsa or non-violence must be justified not only with reference to the end but also in itself. Every act must be justified with reference to satya and ahimsa.
- Question 35 of 50
In India, disguised unemployment is generally observed in:
Disguised unemployment is unemployment that does not affect aggregate economic output. It occurs when productivity is low and too many workers are filling too few jobs. It can refer to any part of the population that is not employed at full capacity. In India, disguised unemployment is generally observed in the Agricultural sector.
- Question 36 of 50
If the commodities manufactured in Surat are sold in Mumbai or Delhi, then it is:
When buying and selling of goods and services takes place within the geographical boundaries of a country, it is referred to as internal trade or domestic trade.
- Question 37 of 50
Foreign currency which has a tendency of quick migration is called:
In economics, hot currency is the flow of funds from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts.
- Question 38 of 50
Which of the following is a better measurement of Economic Development?
The most comprehensive measure of overall economic performance is gross domestic product or GDP, which measures the “output” or total market value of goods and services produced in the domestic economy during a particular time period. Per capita income (or Average GDP/person) is very misleading as it includes the incomes of billionaires.
- Question 39 of 50
All of the goods which are scarce and limited in supply are called:
All of the goods which are scarce and limited in supply are called luxury goods. A luxury good is a good for which demand increases more than what is proportional as income rises.
- Question 40 of 50
The theory of monopolistic competition is developed by:
The theory of monopolistic competition is developed by American economist Edward Hastings Chamberlin in his book ‘Theory of Monopolistic Competition’ (1933).
- Question 41 of 50
The famous slogan “GARIBI HATAO” (Remove Poverty) was launched during the:
The fourth Five-Year Plan was from 1969 to 1974. It targeted achieving self-reliance through progressive movement and achieving stable growth. During the implementation of this plan, then Prime Minister Indira Gandhi called the slogan ‘GARIBI HATAO’.
- Question 42 of 50
Bank Rate refers to the interest rate at which:
A bank rate is the interest rate a nation’s central bank charges to its domestic banks to borrow money. In India, the RBI set the bank rate.
- Question 43 of 50
Which of the following has the sole right of issuing currency (except one rupee coins and notes) in India?
The one rupee note and coins are issued by the Ministry of Finance. In terms of Section 22 of the Act, Reserve Bank has the sole right to issue banknotes in India excluding one rupee note.
- Question 44 of 50
In the budget figures of the Government of India the difference between total expenditure and total receipts is called:
Budget deficit is the difference between total expenditure and total receipts. The solution to a budget deficit for a government would be to increase taxes, find new avenues for revenue and reduce government spending. Fiscal deficit is calculated by subtracting the total income from the total expenditure.
- Question 45 of 50
India’s biggest nationalised enterprise today:
India’s biggest nationalised enterprise today is Indian Railways. It manages the fourth largest railway network (after US, Russia and China.) in the world by size, comprising 1,21,407 km of track length over a route of 67,368 km.
- Question 46 of 50
The official agency responsible for estimating National Income in India is:
The main functions of CSO are to provide advisory services to other statistical agencies, keep liaison (public relation) with international statistical bodies, prepare and publish national accounts statistics, industrial statistics, conduct economic census, etc.
- Question 47 of 50
Which is the most essential function of an entrepreneur?
Risk-bearing is the most essential function of an entrepreneur. He has to pay to all the other factors of production in advance. There are chances that he may be rewarded with a handsome profit or he may suffer a heavy loss. Therefore, risk-bearing is the final responsibility of an entrepreneur.
- Question 48 of 50
Knowledge, technical skill, education, etc. in economics, are regarded as:
The term human capital refers to the economic value of a worker’s experience and skills. Human capital includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.
- Question 49 of 50
Excise duty on a commodity is payable with reference to its:
Excise duty is a form of indirect tax that is levied by the Central Government of India for the production of goods. Excise duty has been replaced by the Goods and Services Tax (GST) w.e.f. 1 July 2017. Today, excise duty applies only on petroleum and liquor.
- Question 50 of 50
The highest body which approves the Five Year Plan in India was the:
The highest body which approves the Five Year Plan in India was the National Development Council. Five-Year Plans, developed, executed, and monitored by the Planning Commission (1951-2014) and the NITI Aayog (2015-2017). On 1 January 2015, a Cabinet resolution was passed to replace the Planning Commission with the newly formed NITI Aayog (National Institution for Transforming India).