- National Income of India is estimated by –
(A) Planning Commission
(B) Finance Commission
(C) Reserve Bank of India
(D) Central Statistical Organisation
Answer: (D)
Explanation: The Central Statistical Organisation (CSO), now part of the National Statistical Office (NSO), estimates India’s national income, including GDP and related metrics, using standardized methodologies, unlike other bodies focused on planning or monetary policy. - Gross Domestic Product is measured in terms of –
(A) Total value of money
(B) Total value of goods
(C) Total value of services
(D) Total value of goods and services
Answer: (D)
Explanation: GDP measures the total monetary value of all final goods and services produced within a country. In India, this includes agricultural output, IT services, and manufacturing, reflecting economic activity comprehensively. - The concept of “Green GDP” emphasizes –
(A) Economic growth
(B) Growth with human development
(C) Growth with sustainable development
(D) Growth with savings
Answer: (C)
Explanation: Green GDP adjusts economic growth for environmental costs, promoting sustainability. In India, it accounts for pollution or resource depletion from industrial growth, unlike human development or savings-focused metrics. - Human Development Index (HDI) does NOT include –
(A) Education
(B) Life Expectancy
(C) Gross Enrolment
(D) Political Freedom
Answer: (D)
Explanation: HDI measures education, life expectancy, and per capita income, but excludes political freedom. In India, HDI reflects school enrollment and health outcomes, not governance or political metrics. - Which one of the following is not part of the capital budget?
(A) Expenditure on acquisition of assets
(B) Loans and advances
(C) Grants
(D) Defence Expenditure
Answer: (D)
Explanation: The capital budget covers asset creation and loans, like India’s infrastructure spending. Defence expenditure, primarily salaries and operations, falls under revenue expenditure, not capital budget items. - Planning Commission was replaced by –
(A) NITI Aayog
(B) Finance Commission
(C) RBI
(D) National Council for Development
Answer: (A)
Explanation: The Planning Commission, which designed India’s Five-Year Plans, was replaced by NITI Aayog in 2015 to promote cooperative federalism and policy innovation, unlike other bodies with distinct roles. - The Reserve Bank of India was nationalized in –
(A) 1935
(B) 1947
(C) 1949
(D) 1951
Answer: (C)
Explanation: The RBI was nationalized in 1949, bringing it under government control to align monetary policy with national goals, post-independence, marking a shift from its 1935 establishment. - CRR refers to –
(A) Cash Ratio Regulation
(B) Cash Reserve Ratio
(C) Credit Reserve Rate
(D) Current Risk Ratio
Answer: (B)
Explanation: Cash Reserve Ratio (CRR) is the share of bank deposits held with the RBI, controlling money supply. In India, a 4% CRR ensures liquidity management, unlike other regulatory terms. - Repo Rate is –
(A) Rate at which RBI gives loan to banks
(B) Rate at which banks lend to RBI
(C) Rate at which RBI lends to public
(D) None of the above
Answer: (A)
Explanation: Repo rate is the rate at which RBI lends to commercial banks against securities. In India, a higher repo rate (e.g., 6%) curbs inflation by raising borrowing costs for banks. - Fiscal policy deals with –
(A) Money supply
(B) Taxation and government spending
(C) Interest rates
(D) All of the above
Answer: (B)
Explanation: Fiscal policy involves taxation and government spending to influence the economy. In India, budget allocations for infrastructure or subsidies shape demand, unlike monetary tools like interest rates. - The largest source of revenue in India is –
(A) Income Tax
(B) GST
(C) Excise Duty
(D) Corporation Tax
Answer: (B)
Explanation: Goods and Services Tax (GST), introduced in 2017, is India’s largest revenue source, unifying indirect taxes on goods and services, surpassing income tax or excise collections in scale. - Disinvestment refers to –
(A) Investing in public enterprises
(B) Selling equity in public sector units
(C) Reducing foreign investment
(D) Increasing budget deficit
Answer: (B)
Explanation: Disinvestment involves selling government equity in public sector units, like India’s sale of Air India stakes, to raise funds and improve efficiency, unlike foreign investment or deficit policies. - The first Five-Year Plan in India was launched in –
(A) 1947
(B) 1950
(C) 1951
(D) 1952
Answer: (C)
Explanation: India’s first Five-Year Plan (1951–56) focused on agriculture and irrigation to boost post-independence growth, launched in 1951 under the Planning Commission, not earlier or later years. - The term ‘inflation’ means –
(A) Increase in GDP
(B) Increase in prices
(C) Decrease in money supply
(D) Decrease in production
Answer: (B)
Explanation: Inflation is a sustained rise in general price levels. In India, rising food or fuel prices increase CPI, reducing purchasing power, unlike GDP growth or money supply changes. - ‘Monetary Policy’ is formulated by –
(A) Ministry of Finance
(B) SEBI
(C) RBI
(D) NITI Aayog
Answer: (C)
Explanation: The Reserve Bank of India formulates monetary policy, using tools like repo rates to control inflation and liquidity, unlike SEBI’s market regulation or NITI Aayog’s advisory role. - The base year for GDP calculation in India (current) is –
(A) 2004–05
(B) 2011–12
(C) 2001–02
(D) 1999–2000
Answer: (B)
Explanation: The base year for India’s GDP calculation is 2011–12, used to measure real GDP by fixing prices to that year, reflecting current economic structures, unlike outdated base years. - Which institution publishes the ‘World Economic Outlook’?
(A) World Bank
(B) IMF
(C) WTO
(D) OECD
Answer: (B)
Explanation: The International Monetary Fund (IMF) publishes the World Economic Outlook, analyzing global economic trends, including India’s growth forecasts, unlike WTO’s trade focus or World Bank’s development reports. - The ‘poverty line’ in India is based on –
(A) Income
(B) Expenditure
(C) Consumption
(D) All of the above
Answer: (C)
Explanation: India’s poverty line is based on consumption, particularly calorie intake (e.g., 2,400 kcal/day in rural areas), as per Tendulkar Committee norms, focusing on basic needs, not just income or expenditure. - FDI refers to –
(A) Foreign Direct Income
(B) Foreign Direct Investment
(C) Fiscal Development Investment
(D) Foreign Domestic Investment
Answer: (B)
Explanation: Foreign Direct Investment (FDI) involves foreign entities investing in Indian businesses, like Walmart’s stake in retail, boosting capital and jobs, unlike income or fiscal investment terms. - The National Development Council was set up in –
(A) 1947
(B) 1950
(C) 1951
(D) 1952
Answer: (D)
Explanation: The National Development Council (NDC), established in 1952, approved India’s Five-Year Plans, coordinating state and central planning, post-independence, unlike earlier years. - Which tax is levied by the Union and collected by States?
(A) Excise duty
(B) Income tax
(C) Stamp duty
(D) GST
Answer: (D)
Explanation: GST, a Union-levied tax, is shared with states, with SGST collected by states on intra-state sales, unlike excise or income taxes, which have different collection mechanisms. - The Goods and Services Tax (GST) was implemented in –
(A) 2016
(B) 2015
(C) 2017
(D) 2018
Answer: (C)
Explanation: GST was implemented in India on July 1, 2017, unifying indirect taxes like VAT and excise, streamlining taxation across goods and services, unlike earlier or later years. - The term ‘budget deficit’ refers to –
(A) Total expenditure > total revenue
(B) Total revenue > total expenditure
(C) Fiscal deficit + revenue deficit
(D) None of the above
Answer: (A)
Explanation: Budget deficit occurs when total expenditure exceeds total revenue, requiring borrowing. In India, a high budget deficit prompts government bonds to fund infrastructure or subsidies. - Full employment means –
(A) 100% employment
(B) Employment for all who seek work
(C) Zero unemployment
(D) No disguised unemployment
Answer: (B)
Explanation: Full employment implies all willing workers find jobs at prevailing wages, allowing for frictional unemployment. In India, it excludes disguised unemployment in agriculture, not zero unemployment. - NITI Aayog’s first Vice-Chairman was –
(A) Arvind Panagariya
(B) Raghuram Rajan
(C) C. Rangarajan
(D) Kaushik Basu
Answer: (A)
Explanation: Arvind Panagariya was NITI Aayog’s first Vice-Chairman (2015–17), shaping its policy framework, unlike economists like Raghuram Rajan, who served as RBI Governor. - The main feature of the Indian economy is –
(A) Industrial economy
(B) Agricultural economy
(C) Mixed economy
(D) Socialist economy
Answer: (C)
Explanation: India’s mixed economy combines private and public sectors, with agriculture, services (e.g., IT), and industry coexisting, unlike purely agricultural or socialist systems. - India’s foreign exchange reserves are held by –
(A) Ministry of Finance
(B) RBI
(C) SEBI
(D) SBI
Answer: (B)
Explanation: The RBI holds and manages India’s foreign exchange reserves, like dollars and gold, to stabilize the rupee and manage external payments, unlike SEBI or SBI’s roles. - The term ‘dumping’ in trade means –
(A) Selling goods below cost price
(B) Selling goods with profit
(C) Exporting expensive goods
(D) None of the above
Answer: (A)
Explanation: Dumping involves exporting goods below cost or domestic prices to capture markets. India imposes anti-dumping duties on Chinese steel to protect local industries, unlike profitable or expensive exports. - Which body regulates the stock market in India?
(A) RBI
(B) IRDA
(C) SEBI
(D) FICCI
Answer: (C)
Explanation: The Securities and Exchange Board of India (SEBI) regulates stock markets, ensuring investor protection and market integrity, unlike RBI’s banking or IRDA’s insurance oversight. - Balance of Payments includes –
(A) Only imports and exports
(B) All economic transactions with foreign countries
(C) Domestic financial transfers
(D) Budget receipts
Answer: (B)
Explanation: Balance of Payments (BoP) records all economic transactions, including trade, FDI, and remittances, between India and the world, unlike domestic transfers or budget receipts. - The term ‘stagflation’ refers to –
(A) High inflation and high growth
(B) High growth and low inflation
(C) High inflation and high unemployment
(D) Low growth and low unemployment
Answer: (C)
Explanation: Stagflation combines high inflation and high unemployment with low growth, as seen in India during 1970s oil shocks, challenging economic stability, unlike high-growth scenarios. - Black money is –
(A) Unaccounted money
(B) Money kept in banks
(C) Money from exports
(D) Legitimate income
Answer: (A)
Explanation: Black money is unaccounted income, often from tax evasion or illegal activities. In India, demonetization in 2016 aimed to curb black money in cash transactions, unlike legitimate or export earnings. - The fiscal deficit is –
(A) Revenue deficit + capital receipts
(B) Total deficit minus revenue deficit
(C) Total expenditure – total receipts excluding borrowings
(D) None of these
Answer: (C)
Explanation: Fiscal deficit is total expenditure minus total receipts (excluding borrowings), reflecting borrowing needs. In India, a high fiscal deficit funds schemes like MGNREGA via bonds. - PPP stands for –
(A) Purchasing Power Parity
(B) Private Production Policy
(C) Price Promotion Protocol
(D) Public Price Planning
Answer: (A)
Explanation: Purchasing Power Parity (PPP) adjusts for cost-of-living differences across countries. India’s GDP in PPP terms reflects higher purchasing power than nominal GDP, unlike other acronyms. - Which of the following is a direct tax?
(A) GST
(B) Excise
(C) Customs
(D) Income Tax
Answer: (D)
Explanation: Income tax, a direct tax, is levied on individuals’ earnings in India, unlike indirect taxes like GST, excise, or customs, which apply to goods and services. - The GST Council is chaired by –
(A) Prime Minister
(B) Finance Secretary
(C) Union Finance Minister
(D) RBI Governor
Answer: (C)
Explanation: The GST Council, chaired by the Union Finance Minister, sets GST rates and policies, ensuring coordination between center and states, unlike other officials’ roles. - The World Bank is headquartered in –
(A) Geneva
(B) New York
(C) Washington DC
(D) Paris
Answer: (C)
Explanation: The World Bank, headquartered in Washington DC, funds development projects, like India’s infrastructure loans, unlike other international organizations based elsewhere. - Which index measures inflation in wholesale prices?
(A) CPI
(B) WPI
(C) GDP deflator
(D) Base price index
Answer: (B)
Explanation: The Wholesale Price Index (WPI) measures inflation in wholesale prices, like raw materials in India, unlike CPI (consumer prices) or GDP deflator (overall prices). - The term “inclusive growth” refers to –
(A) Growth of all sectors
(B) Growth benefiting all sections of society
(C) Growth with imports
(D) Industrial growth
Answer: (B)
Explanation: Inclusive growth ensures economic benefits reach all societal sections, like India’s rural poor via schemes like PM-KISAN, unlike sector-specific or import-driven growth. - The Mahatma Gandhi National Rural Employment Guarantee Act was enacted in –
(A) 2002
(B) 2003
(C) 2005
(D) 2006
Answer: (C)
Explanation: MGNREGA, enacted in 2005, guarantees 100 days of rural employment, boosting livelihoods in India’s villages, implemented fully by 2006, not earlier years. - The ‘Make in India’ initiative was launched in –
(A) 2013
(B) 2014
(C) 2015
(D) 2016
Answer: (B)
Explanation: Launched in 2014, ‘Make in India’ promotes manufacturing, attracting FDI in sectors like electronics, boosting India’s industrial growth, unlike adjacent years. - ‘Jan Dhan Yojana’ primarily aims at –
(A) Literacy
(B) Financial Inclusion
(C) Urban Employment
(D) Micro Loans
Answer: (B)
Explanation: Jan Dhan Yojana, launched in 2014, promotes financial inclusion by providing bank accounts to unbanked Indians, enabling access to credit and insurance, unlike literacy or employment goals. - The apex bank of rural credit in India is –
(A) NABARD
(B) SIDBI
(C) RBI
(D) SBI
Answer: (A)
Explanation: NABARD, the National Bank for Agriculture and Rural Development, oversees rural credit, supporting India’s farmers through refinancing, unlike SIDBI’s MSME focus or RBI’s broader role. - The IMF’s main function is –
(A) Lending to poor countries
(B) Monitoring global economic trends
(C) Maintaining exchange rate stability
(D) Facilitating trade
Answer: (C)
Explanation: The IMF primarily ensures global exchange rate stability, aiding countries like India during 1991’s BoP crisis with loans and policy advice, unlike trade (WTO) or trend monitoring. - A situation in which unemployment and inflation rise together is –
(A) Recession
(B) Stagflation
(C) Deflation
(D) Boom
Answer: (B)
Explanation: Stagflation combines high unemployment and inflation, as seen in India during global oil shocks, unlike recessions (low growth) or booms (high growth). - The poverty line in India is defined based on –
(A) Income
(B) Consumption
(C) Calorie intake
(D) Living standards
Answer: (C)
Explanation: India’s poverty line, based on calorie intake (e.g., 2,400 kcal/day rural, per Tendulkar norms), reflects minimum consumption needs, unlike income or broader living standards. - What does GDR stand for in capital markets?
(A) General Demand Ratio
(B) Global Development Reserve
(C) Global Depository Receipt
(D) General Debt Receipt
Answer: (C)
Explanation: Global Depository Receipts (GDRs) allow Indian firms to raise capital abroad by issuing shares via foreign depositories, unlike other financial or reserve terms. - The Planning Commission was established in –
(A) 1947
(B) 1950
(C) 1951
(D) 1955
Answer: (B)
Explanation: The Planning Commission, set up in 1950, guided India’s economic planning through Five-Year Plans, shaping post-independence development, replaced by NITI Aayog in 2015. - The term ‘base year’ in GDP calculation refers to –
(A) The year with the highest growth
(B) The reference year for comparison
(C) The latest year with available data
(D) A fiscal year
Answer: (B)
Explanation: The base year (e.g., 2011–12 in India) is the reference for constant-price GDP, fixing prices to measure real growth, unlike high-growth or latest data years. - Which of the following is NOT a function of money?
(A) Medium of exchange
(B) Unit of account
(C) Store of value
(D) Standard of living
Answer: (D)
Explanation: Money serves as a medium of exchange, unit of account, and store of value, facilitating trade and valuation in India. Standard of living is an outcome, not a money function.