Economy MCQ Quiz - Objective Question with Answer for Economy - Download Free PDF

The correct answer is - RBI

Key Points

• Reserve Bank of India (RBI)
  • The Reserve Bank of India (RBI) is India's central banking institution, which controls the issuance and supply of the Indian rupee.
  • It commenced operations on April 1, 1935, during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • The RBI is responsible for the design, production, and overall management of the nation's currency, with the goal of ensuring adequate supply of clean and genuine notes.
  • The RBI also plays a crucial role in the development strategy of the Government of India.

Additional Information

• Commercial Banks
  • Commercial banks are financial institutions that accept deposits, offer checking account services, and make various loans.
  • They do not have the authority to issue currency notes.
• Government of India
  • The Government of India can influence monetary policy and regulation but does not directly issue currency notes.
  • The RBI acts as the issuer on behalf of the Government of India.
• State Bank of India (SBI)
  • State Bank of India (SBI) is a public sector banking and financial services statutory body headquartered in Mumbai, Maharashtra.
  • While SBI is the largest commercial bank in India, it does not have the authority to issue currency notes.

The Bureau of Indian Standards (BIS) is the National Standard Body of India . Bureau of Indian Standards caters to Industrial and consumer goods.

Key Points

• BIS is a National Standard Body of India.
• It was formerly known as the ISI, Indian Standards Institution. 
• BIS is responsible for the harmonious development of the activities of standardization, marking and quality certification of goods and for matters connected therewith or incidental thereto.

• The main objectives of BIS are standardization, marking, and quality control of goods and production.

• The Bureau of Indian Standards (BIS) Headquarters is located in New Delhi.

• Bureau of Indian Standards caters to Industrial and consumer goods.

The correct answer is Option 4.

Key Points

• China’s reform and opening-up policies of 1978 introduced private business and market incentives to what was a state-led communist system.
• Prior to 1978, the private sector was virtually non-existent; today, private firms contribute to approximately 70 percent of China’s GDP.
• To get to this point, China underwent vast changes to its economic system over the past 40 years.
• Despite the breadth of the changes, however, China’s economic reforms have been characterized by gradualism and experimentalism, or “crossing the river by feeling the stones” as Deng famously once said.
• Special Economic Zones (SEZs) typified this gradualism and experimentalism, where the government piloted new reforms in geographically contained areas.

The correct answer is 1960-61. 

Key Points

• Intensive Agriculture District Programme (IADP)
  • The Intensive Agriculture District Programme, popularly known as package programme was launched in India during the kharif season in 1960.
  • The central idea behind the launch of IADP was that increased agricultural productivity would lead to economic growth, which would ensure the welfare of the society.
  • The method adopted in IADP was to demonstrate the feasibility of increased agricultural production rapidly by concentrating on all factors of production at the same time in an integrated action programme in selected districts fulfilling optimum conditions.
  • The programme was known as a package programme because of the collective and simultaneous application of all improved practices namely improved seeds, irrigation, fertilizer, plant protection, implements, storage facilities, marketing and credit facilities etc.
  • Initially, 7 districts were covered under the programme namely Thanjavur (Tamil Nadu), West Godavari (Andhra Pradesh), Sahabad (Bihar), Raipur (Madhya Pradesh), Aligarh (Uttar Pradesh), Ludhiana (Punjab), and Pali (Rajasthan). 
  • The selection of districts was done on the basis of their high potential for increasing the agricultural yield in a shorter time.
  • These selected districts had assured water supply for irrigation, well-developed cooperatives, good physical infrastructure and minimum hazards.

Important Points

• Objectives of IADP
  • To achieve rapid increase in agricultural production through concentration of financial, technical, and administrative resources.
  • To achieve a self-generating breakthrough in productivity and to raise the production potential by stimulating the human and physical process of change.
  • To demonstrate the most effective ways of increasing production and thus, to provide lessons for promoting such intensive agricultural production programmes to other areas. 

Thus, The Intensive Agriculture District Programme (IADP) was launched in the year 1960-61.

The correct answer is Agriculture DevelopmentKey Points

• The Rainbow Revolution in India refers to a series of initiatives and developments in the field of agriculture aimed at improving agricultural production through the use of various strategies like technological advancements, better seeds, and efficient irrigation practices.
• The term "Rainbow" signifies the variety of agricultural sectors covered under this revolution.
• It includes the following key components:
  • Green Revolution (for increasing food grain production, particularly wheat and rice),
  • White Revolution (for dairy farming and milk production),
  • Yellow Revolution (for oilseeds),
  • Blue Revolution (for fish production),
  • Golden Revolution (for fruits and honey),
  • Silver Revolution (for egg and poultry production),
  • Red Revolution (for meat and livestock production).
• The term Rainbow Revolution captures the combined efforts across these various sectors to improve India's agricultural productivity and self-sufficiency in food production.

Additional Information

​List of Revolution:

The correct answer is 1969.Key PointsFourth Five-Year Plan:

• It began in 1969 and ended in 1974.
• The Gadgil Formula served as the foundation for the Fourth Five-Year Plan (1969–1974), which placed a strong focus on growth with stability and the move toward self-reliance.
• It focused on the development of agriculture, industry, and infrastructure.
• It was implemented during Indira Gandhi's tenure as prime minister in an effort to address earlier shortcomings.
• The Green Revolution increased agriculture, and the government nationalized fourteen significant Indian banks.
• Additionally, the Drought Prone Area Program was introduced.
• The actual growth rate was 3.3% compared to the target growth rate of 5.6%.

Additional Information

• The Indian Planning Commission was established in 1950 to formulate and implement five-year plans for economic development in India.
  • It was replaced by NITI Aayog since January 1, 2015.
  • After the Planning Commission, the five year plans also stopped to be made in India.
• An overview of all Five Year Plans implemented in India is highlighted below:

The correct answer is Irving Fisher.Key Points

• Irving Fisher gave the concept of 'money illusion' for the first time.
• Money illusion refers to the tendency of people to think in nominal terms rather than real terms.
• For example, if a person's salary increases by 3% but inflation is also 3%, they may think they have received a raise when in reality their purchasing power has not changed.

Additional Information

• Adam Smith is known for his work on economics.
  • He is often referred to as the father of modern economics. 
• JM Keynes was a renowned economist.
  • He is known for his theories on macroeconomics and the role of government in managing the economy.
• Robertson was an economist who contributed to the development of monetary theory. 

The correct answer is Option 2.

Key Points

• Tata iron and steel company was set up by Dorabji Tata on August 25, 1907, as part of the Jamshedji Tata group.
• Tata Iron and Steel Company (TISCO) was founded by Jamsetji Tata and established by Dorabji Tata.
• It was completed in 1910 but the production started in 1911.
• It is known as TISCO (Tata Iron and steel company).
• The plant is located at Jamshedpur.
• Roads, railway wheels, railway lines, slabs, and sleepers are manufactured here.
• This plant is located at the confluence of River Kharkai and Swarnrekha.
• It is an important plant of the private sector which was established at Sakchi by Jamshedji Tata.

The correct answer is its value is backed by the issuing authority. Key Points

• The issuing authority, which is the government in this case, guarantees the value of the coin.
• This means that the coin can be used as a medium of exchange, as people trust that it is worth the value printed on it.
• The ten rupee coin is not finely or artistically minted, nor does it have an intrinsic value greater than Rs. 10.
• Its value is purely symbolic and based on the trust that people have in the issuing authority.

Additional Information

• The term "issuing authority" refers to the entity that is responsible for creating and distributing currency.
• In India, this is the Reserve Bank of India (RBI), which is the central bank of the country.
• Finely and artistically minted coins may have aesthetic value, but this does not necessarily make them more valuable as currency.
• The value of a coin is determined by its purchasing power, which is based on the trust that people have in the currency and the stability of the economy.
• The intrinsic value of a coin is the value of the metal or materials used to make it.
• For example, a gold coin may have an intrinsic value based on the current market price of gold.
• However, most modern currency is not based on intrinsic value, but on the trust and confidence that people have in the issuing authority.

• Indirect tax is not directly levied on the taxpayers.
• This tax is often levied on goods and services which results in their higher prices.
• A few examples of indirect taxes in India include service tax, central excise and customs duty, and value added tax (VAT).
• Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. GST is one indirect tax for the entire country.
• Direct Taxes, as the name suggests, are taxes that are directly paid to the government by the taxpayer.
• It is a tax applied on individuals and organizations directly by the government e.g. income tax, corporation tax, wealth tax etc.

The correct answer is Kerala.

Key Points

• On May 17, 1998, former Prime Minister Atal Bihari Vajpayee officially launched Kudumbashree, the Kerala State Poverty Eradication Mission.
• Under the direction of Local Self Governments established and given authority by the 73rd and 74th Amendments to the Indian Constitution, the Mission aspires to remove absolute poverty within a set time frame of ten years.
• By putting the impoverished in community-based groups, the Mission established by the State Government with the active assistance of the Government of India and NABARD has adopted a novel approach to combating poverty.
• Instead of using a project-based strategy, the Mission uses a process approach. 
• Bringing together women from all walks of life to fight for their rights or for empowerment, Kudumbashree, a community organisation of Neighborhood Groups (NHGs) of women in Kerala, has been recognised as a successful method for the empowerment of women in rural as well as urban regions.

Important Points

• Kerala: (As of 2022)
  • Governor: Arif Mohammad Khan
  • Capital: Thiruvananthapuram
  • Chief Minister: Pinarayi Vijayan

The correct answer is secured credit.
Key Points

• Secured credit is a type of loan that is backed by collateral. 
• Secured credit is commonly used for mortgages, auto loans, and secured credit cards.
• Secured credit is considered less risky for lenders because they have a way to recover their money if the borrower defaults on the loan. This makes it easier for borrowers with poor credit to get approved for a loan.
• Collateral is an asset that the borrower pledges as security for the loan.
  • Collateral can take many forms, including real estate, vehicles, stocks, and jewellery.
  • If the borrower defaults on the loan, the lender can seize the collateral to recover the amount owed.

 Additional Information

• Unsecured credit is a type of loan which are not backed by collateral. Lenders rely on the borrower's creditworthiness to determine if they will be able to repay the loan. Unsecured credit is considered riskier for lenders and therefore, typically comes with higher interest rates.
  • Unsecured credit is commonly used for credit cards, personal loans, and student loans.
• Poor credit refers to a low credit score or a history of missed payments and defaults. Borrowers with poor credit may have difficulty getting approved for loans or may be charged higher interest rates to compensate for the increased risk.
• High credit refers to a good credit score and a history of responsible credit management. Borrowers with high credit are more likely to be approved for loans and may be offered lower interest rates.

The correct answer is surplus.

Key Points

• When a country exports more than it imports, it generates a surplus, which means it has more foreign currency to spend than its trading partners.
• It occurs due to a high demand for goods from a certain country in the global market.
• A trade surplus also implies that the country has a net inflow of its local currency from the outside market.
• A trade surplus can create employment and economic growth, but may also lead to higher prices and interest rates within an economy as well as a more expensive currency.

Additional Information

• A deficit is the opposite of a surplus.
  • ​It occurs when a country imports more than it exports, which means it has to borrow money from its trading partners to pay for the difference.
  • This can lead to a decrease in the country's wealth and economic growth.
• A zero budget means that the total amount of money spent by the government is equal to the total amount of money received.
  • This has nothing to do with trade surplus or deficit.
• Liability refers to the amount of money that a company or a country owes to others.

The correct answer is a - iii, b - i, c - iv, d - ii.

Key Points

List of some important books written by these famous writers:

The correct answer is the United Kingdom.

Key Points

• India has overtaken the U.K. to become the world's fifth-largest economy and is now behind only the US, China, Japan and Germany, according to IMF projections.

Additional Information

• A decade back, India was ranked 11th among the large economies while the U.K. was at the fifth position.
• The assumption of India overtaking the U.K. is based on calculations by Bloomberg using the IMF database and historic exchange rates on its terminal.
• On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in 'nominal' cash terms in the quarter through March was $854.7 billion. On the same basis, the U.K. was $816 billion
• India has a population 20 times that of the U.K. and so its GDP per capita is lower.
• India's GDP expanded 13.5% in the April-June quarter, the quickest pace in a year, to retain the world's fastest growing economy tag but rising interest costs and the looming threat of a recession in major world economies could slow the momentum in the coming quarters.
• Gross domestic product (GDP) growth of 13.5% year-on-year compares to a 20.1% expansion a year back and 4.09% growth in the previous three months to March.
• The growth, though lower than the Reserve Bank of India (RBI) estimate of 16.2%, was fuelled by consumption and signalled a revival of domestic demand, particularly in the services sector.
• The central bank has raised the benchmark policy rate by 140 basis points in three instalments since May and has vowed to do more to bring inflation under control.