Economics MCQs – Set 5: Economic & Social Development for UPSC/PCS

  1. The ‘Silver Revolution’ in India refers to –
    (A) Oilseed production
    (B) Egg production
    (C) Dairy farming
    (D) Irrigation development
    Answer: (B)
  2. The base year for Wholesale Price Index (WPI) in India (as of the latest revision) is –
    (A) 2004–05
    (B) 2011–12
    (C) 2015–16
    (D) 2016–17
    Answer: (B)
  3. Which of the following is not a monetary aggregate classified by RBI?
    (A) M1
    (B) M2
    (C) M4
    (D) M6
    Answer: (D)
  4. The CRAR (Capital to Risk-Weighted Assets Ratio) norm is prescribed by –
    (A) IMF
    (B) World Bank
    (C) Basel Committee
    (D) RBI only
    Answer: (C)
  5. Which of the following is NOT a function of commercial banks?
    (A) Credit creation
    (B) Issuing currency
    (C) Accepting deposits
    (D) Providing loans
    Answer: (B)
  6. India’s largest trading partner (goods) in recent years is –
    (A) USA
    (B) UAE
    (C) China
    (D) Japan
    Answer: (C)
  7. “PPP” in economic terms stands for –
    (A) Public Policy Programme
    (B) Purchasing Power Parity
    (C) Private Portfolio Planning
    (D) Price Policy Proposal
    Answer: (B)
  8. The “National Monetisation Pipeline (NMP)” aims to –
    (A) Sell PSU shares
    (B) Lease existing public infrastructure assets
    (C) Reduce fiscal deficit
    (D) Monetise agriculture produce
    Answer: (B)
  9. Which of the following is included in the current account of Balance of Payments?
    (A) FDI
    (B) FII
    (C) Export and import of goods and services
    (D) External commercial borrowings
    Answer: (C)
  10. The headquarters of WTO is located in –
    (A) New York
    (B) Washington D.C.
    (C) Paris
    (D) Geneva
    Answer: (D)
  11. The ‘Green Revolution’ was initiated in India during –
    (A) First Five-Year Plan
    (B) Second Five-Year Plan
    (C) Third Five-Year Plan
    (D) Fourth Five-Year Plan
    Answer: (C)
  12. What is the minimum age to open a Sukanya Samriddhi Yojana account?
    (A) 5 years
    (B) 10 years
    (C) Girl child below 10 years
    (D) Girl child below 15 years
    Answer: (C)
  13. The income tax in India is –
    (A) Regressive
    (B) Progressive
    (C) Proportional
    (D) None of the above
    Answer: (B)
  14. Which of the following is an outcome of the 1991 economic reforms in India?
    (A) Increase in import tariffs
    (B) Nationalisation of private firms
    (C) Abolishment of license raj
    (D) Decrease in FDI
    Answer: (C)
  15. The inflation measured in India for monetary policy purposes is –
    (A) WPI
    (B) CPI (Combined)
    (C) GDP deflator
    (D) CPI (Rural)
    Answer: (B)
  16. Which Five-Year Plan emphasized “growth with social justice”?
    (A) Fifth
    (B) Seventh
    (C) Ninth
    (D) Eleventh
    Answer: (D)
  17. The PMFBY (Pradhan Mantri Fasal Bima Yojana) is related to –
    (A) Minimum support price
    (B) Crop insurance
    (C) Soil health
    (D) Irrigation
    Answer: (B)
  18. The Financial Year in India starts from –
    (A) January 1
    (B) March 1
    (C) April 1
    (D) July 1
    Answer: (C)
  19. The ‘Bretton Woods Twins’ refers to –
    (A) IMF and WTO
    (B) World Bank and WTO
    (C) IMF and World Bank
    (D) IMF and OECD
    Answer: (C)
  20. What is “Quantitative Easing”?
    (A) Reducing fiscal deficit
    (B) Increasing taxes
    (C) Buying of government securities by central bank to inject liquidity
    (D) Selling government securities
    Answer: (C)
  21. Which of the following is not a priority sector under RBI’s norms?
    (A) Agriculture
    (B) MSMEs
    (C) Real Estate
    (D) Education
    Answer: (C)
  22. The “Index of Industrial Production (IIP)” is published by –
    (A) RBI
    (B) CSO
    (C) SEBI
    (D) Ministry of Finance
    Answer: (B)
  23. Which of the following is a component of Aggregate Demand?
    (A) Private consumption
    (B) Government spending
    (C) Net exports
    (D) All of the above
    Answer: (D)
  24. The headquarters of NABARD is located in –
    (A) Hyderabad
    (B) New Delhi
    (C) Mumbai
    (D) Chennai
    Answer: (C)
  25. Which committee is associated with tax reforms in India?
    (A) Kelkar Committee
    (B) Rangarajan Committee
    (C) Gadgil Committee
    (D) Rakesh Mohan Committee
    Answer: (A)
  26. FDI inflows are recorded in the Balance of Payments under –
    (A) Capital account
    (B) Current account
    (C) Revenue account
    (D) Fiscal account
    Answer: (A)
  27. Repo rate and reverse repo rate are part of –
    (A) Fiscal policy
    (B) Foreign policy
    (C) Monetary policy
    (D) Income policy
    Answer: (C)
  28. What is a “Zero Coupon Bond”?
    (A) Bond with zero maturity
    (B) Bond with no interest
    (C) Bond sold at face value
    (D) Bond with no risk
    Answer: (B)
  29. Which one of the following is not a KYC document?
    (A) Aadhaar
    (B) PAN
    (C) Voter ID
    (D) School certificate
    Answer: (D)
  30. A budget that covers only recurring revenue and expenditure is called –
    (A) Capital budget
    (B) Revenue budget
    (C) Deficit budget
    (D) Performance budget
    Answer: (B)
  31. The ratio of tax revenue to GDP is known as –
    (A) Tax elasticity
    (B) Tax buoyancy
    (C) Tax to GDP ratio
    (D) Fiscal ratio
    Answer: (C)
  32. A situation where a worker is employed below his skill level is –
    (A) Seasonal unemployment
    (B) Structural unemployment
    (C) Underemployment
    (D) Frictional unemployment
    Answer: (C)
  33. What does “FIIs” stand for?
    (A) Foreign Institutional Investments
    (B) Fiscal Insurance Institutions
    (C) Foreign Investment Index
    (D) Financial International Institutions
    Answer: (A)
  34. The 15th Finance Commission’s chairman was –
    (A) C. Rangarajan
    (B) N. K. Singh
    (C) Y. V. Reddy
    (D) Vijay Kelkar
    Answer: (B)
  35. If a country imports more than it exports, it has –
    (A) Trade surplus
    (B) Current account surplus
    (C) Trade deficit
    (D) Balanced trade
    Answer: (C)
  36. The government sells securities in the open market to –
    (A) Control inflation
    (B) Reduce taxes
    (C) Boost exports
    (D) Increase subsidies
    Answer: (A)
  37. “Inflation-indexed bonds” are meant to –
    (A) Hedge investors from inflation
    (B) Track stock market
    (C) Support mutual funds
    (D) Fund foreign debt
    Answer: (A)
  38. The Ministry responsible for Census in India is –
    (A) Ministry of Home Affairs
    (B) Ministry of Finance
    (C) Ministry of Statistics
    (D) Ministry of External Affairs
    Answer: (A)
  39. A deficit financed by borrowing from RBI leads to –
    (A) Deflation
    (B) Disinflation
    (C) Monetized deficit
    (D) Fiscal contraction
    Answer: (C)
  40. The GST Council is a –
    (A) Constitutional body
    (B) Statutory body
    (C) Executive body
    (D) Judicial body
    Answer: (A)
  41. In India, ‘monsoon economy’ is a term often used for –
    (A) Service sector
    (B) Industrial sector
    (C) Agricultural sector
    (D) Export sector
    Answer: (C)
  42. The largest source of internal public debt in India is –
    (A) Treasury bills
    (B) Market loans
    (C) Provident funds
    (D) Small savings
    Answer: (B)
  43. The “Twin Deficit” problem in India refers to –
    (A) Fiscal and current account deficit
    (B) Revenue and capital deficit
    (C) Budget and trade deficit
    (D) Income and expenditure deficit
    Answer: (A)
  44. Which of the following does not influence demand?
    (A) Price of the good
    (B) Income of consumer
    (C) Availability of substitutes
    (D) Fixed cost of production
    Answer: (D)
  45. A price ceiling is likely to cause –
    (A) Surplus
    (B) Shortage
    (C) Equilibrium
    (D) Inflation
    Answer: (B)
  46. Supply curve slopes upward due to –
    (A) Law of diminishing marginal utility
    (B) Law of demand
    (C) Profit motive
    (D) Scarcity
    Answer: (C)
  47. Which of the following is not a method of controlling inflation?
    (A) Reducing interest rates
    (B) Reducing fiscal deficit
    (C) Raising reserve ratios
    (D) Selling government securities
    Answer: (A)
  48. Marginal cost is –
    (A) Cost of producing one extra unit
    (B) Total cost divided by output
    (C) Fixed cost plus variable cost
    (D) Cost at zero output
    Answer: (A)
  49. The elasticity of supply is zero when –
    (A) Supply curve is horizontal
    (B) Supply curve is vertical
    (C) Quantity supplied rises faster than price
    (D) None of the above
    Answer: (B)
  50. Which of the following is the best indicator of economic development?
    (A) GDP
    (B) National Income
    (C) Per capita income
    (D) HDI
    Answer: (D)

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