- What does MGNREGA guarantee?
(A) Urban employment
(B) Food security
(C) 100 days of wage employment in rural areas
(D) Health services for the poor
Answer: (C)
Explanation: MGNREGA, enacted in 2005, guarantees 100 days of wage employment annually to rural households in India, supporting livelihoods through projects like road construction, unlike urban or health-focused schemes. - The ‘Capital Market’ deals with –
(A) Short-term funds
(B) Long-term funds
(C) Foreign exchange
(D) Derivatives only
Answer: (B)
Explanation: The capital market facilitates long-term funding through stocks and bonds, like India’s BSE, enabling firms to raise capital for expansion, unlike short-term money markets or forex. - The slogan “Garibi Hatao” was given in which Five-Year Plan?
(A) Fourth Plan
(B) Fifth Plan
(C) Sixth Plan
(D) Seventh Plan
Answer: (B)
Explanation: The slogan “Garibi Hatao” (Remove Poverty) was popularized during the Fifth Five-Year Plan (1974–79), emphasizing poverty alleviation through employment and social programs in India. - In economics, which of the following is not a factor of production?
(A) Land
(B) Labor
(C) Capital
(D) Bank
Answer: (D)
Explanation: Factors of production include land, labor, capital, and entrepreneurship. Banks, while facilitating capital, are not a factor themselves, unlike land used in Indian agriculture or labor in industries. - Which of the following is a renewable source of energy?
(A) Coal
(B) Natural Gas
(C) Solar Energy
(D) Petroleum
Answer: (C)
Explanation: Solar energy, abundant in India, is renewable, unlike finite fossil fuels like coal or petroleum, supporting sustainable energy goals through solar parks. - Which of the following is NOT an outcome of globalisation?
(A) Increase in foreign direct investment
(B) Spread of technology
(C) Self-sufficiency in economy
(D) Integration of markets
Answer: (C)
Explanation: Globalisation boosts FDI, technology transfer, and market integration, as seen in India’s IT sector. Self-sufficiency, like pre-1991 policies, contradicts global trade reliance. - The ‘Pink Revolution’ in India is related to –
(A) Onion production
(B) Poultry and meat processing
(C) Pharmaceutical production
(D) Cotton farming
Answer: (B)
Explanation: The Pink Revolution focuses on poultry and meat processing in India, enhancing livestock-based industries, unlike onion (Operation Green) or pharmaceuticals. - The ‘Primary deficit’ is –
(A) Fiscal deficit – interest payments
(B) Fiscal deficit + interest payments
(C) Revenue deficit – capital receipts
(D) Budget deficit – total expenditure
Answer: (A)
Explanation: Primary deficit is fiscal deficit minus interest payments, reflecting borrowing needs excluding past debt costs. In India, it indicates fiscal health beyond legacy obligations. - Which institution releases the “World Investment Report”?
(A) IMF
(B) UNCTAD
(C) World Bank
(D) WTO
Answer: (B)
Explanation: UNCTAD publishes the World Investment Report, analyzing global FDI trends, including India’s inflows in sectors like IT, unlike IMF or WTO reports. - India became a member of WTO in –
(A) 1991
(B) 1993
(C) 1995
(D) 1999
Answer: (C)
Explanation: India joined the WTO in 1995, committing to global trade rules, boosting exports like textiles, following the Uruguay Round agreements. - In India, the responsibility of economic planning lies with –
(A) RBI
(B) Finance Commission
(C) NITI Aayog
(D) Ministry of External Affairs
Answer: (C)
Explanation: NITI Aayog, replacing the Planning Commission in 2015, guides India’s economic planning, promoting cooperative federalism, unlike RBI’s monetary or Finance Commission’s tax roles. - Which tax reform is considered as the biggest in post-liberalisation India?
(A) Income Tax Reforms
(B) Excise Reforms
(C) GST
(D) VAT
Answer: (C)
Explanation: GST, implemented in 2017, is India’s largest tax reform, unifying indirect taxes like VAT and excise, simplifying taxation and boosting compliance across states. - Which of the following is used to measure fiscal health of a nation?
(A) GDP
(B) NNP
(C) Fiscal deficit
(D) Trade surplus
Answer: (C)
Explanation: Fiscal deficit, measuring borrowing needs, reflects a nation’s fiscal health. India’s fiscal deficit target (e.g., 3% of GDP) signals budget discipline, unlike GDP or trade metrics. - The New Industrial Policy was introduced in –
(A) 1990
(B) 1991
(C) 1992
(D) 1995
Answer: (B)
Explanation: The 1991 New Industrial Policy liberalized India’s economy, reducing licensing and promoting private investment, aligning with LPG reforms post-balance of payments crisis. - ‘SWAYAM’ scheme launched by the Government of India is related to –
(A) Financial inclusion
(B) Online education
(C) Agricultural credit
(D) Startups
Answer: (B)
Explanation: SWAYAM, launched in 2017, provides free online education in India, offering courses to enhance skills, unlike financial or agricultural schemes. - What does FRBM stand for?
(A) Financial Responsibility and Budgetary Management
(B) Fiscal Responsibility and Budget Management
(C) Fiscal Reforms and Budget Monitoring
(D) Finance Reserve and Budget Mechanism
Answer: (B)
Explanation: FRBM Act, enacted in 2003, promotes fiscal discipline in India, setting deficit targets to ensure sustainable public finances, unlike other acronyms. - What is the objective of the ‘UDAY’ scheme?
(A) Renewable energy production
(B) Discom debt restructuring
(C) Agricultural reforms
(D) Clean India mission
Answer: (B)
Explanation: UDAY, launched in 2015, restructures debt of India’s power distribution companies (discoms), improving their financial health, unlike renewable energy or agricultural initiatives. - “Operation Twist” is associated with –
(A) RBI monetary policy
(B) Banking recapitalization
(C) SEBI reforms
(D) WTO tariff rules
Answer: (A)
Explanation: Operation Twist, used by RBI, involves buying long-term bonds and selling short-term ones to lower long-term interest rates, stimulating India’s economy, unlike SEBI or WTO actions. - Which of the following is included in Micro, Small and Medium Enterprises (MSME)?
(A) Companies with high turnover
(B) Firms with investment and turnover below a threshold
(C) All listed companies
(D) Government-owned industries
Answer: (B)
Explanation: MSMEs in India are defined by investment and turnover thresholds (e.g., micro: ₹1 crore investment, ₹5 crore turnover), supporting small businesses, unlike listed or government firms. - The ‘Golden Revolution’ in India is related to –
(A) Fruits
(B) Honey and horticulture
(C) Wheat
(D) Oilseeds
Answer: (B)
Explanation: The Golden Revolution boosts honey and horticulture in India, enhancing beekeeping and fruit production, unlike wheat (Green Revolution) or oilseeds (Yellow Revolution). - What is the primary aim of the Start-Up India Scheme?
(A) Subsidy on agriculture
(B) Promoting entrepreneurship
(C) Tax exemption to corporates
(D) Free higher education
Answer: (B)
Explanation: Start-Up India, launched in 2016, promotes entrepreneurship through funding, tax benefits, and ease of doing business, fostering innovation, unlike agricultural or educational schemes. - The ‘Blue Revolution’ in India refers to –
(A) Irrigation projects
(B) Fishing and aquaculture
(C) Textile production
(D) Sky farming
Answer: (B)
Explanation: The Blue Revolution enhances India’s fisheries and aquaculture, boosting coastal economies through schemes like PMMSY, unlike irrigation or textile initiatives. - Which organization regulates mutual funds in India?
(A) IRDAI
(B) RBI
(C) SEBI
(D) NABARD
Answer: (C)
Explanation: SEBI regulates mutual funds in India, ensuring investor protection and market stability, unlike IRDAI (insurance) or NABARD (rural credit). - The repo rate is –
(A) Interest rate at which RBI lends to banks
(B) Rate at which banks lend to RBI
(C) Rate of inflation
(D) Interbank lending rate
Answer: (A)
Explanation: Repo rate is the rate at which RBI lends to commercial banks, influencing India’s money supply and inflation, like a 4% rate curbing demand. - India’s current exchange rate regime is –
(A) Fixed
(B) Floating
(C) Managed floating
(D) Pegged
Answer: (C)
Explanation: India’s exchange rate is managed floating, with RBI intervening to stabilize the rupee against market forces, unlike fully fixed or floating regimes. - Which organization releases the Consumer Confidence Survey in India?
(A) NITI Aayog
(B) RBI
(C) CSO
(D) Ministry of Statistics
Answer: (B)
Explanation: RBI conducts the Consumer Confidence Survey, gauging public sentiment on India’s economic conditions, guiding monetary policy, unlike NITI Aayog or CSO roles. - A situation where more money chases fewer goods is called –
(A) Deflation
(B) Inflation
(C) Stagflation
(D) Disinflation
Answer: (B)
Explanation: Inflation occurs when excess money supply chases limited goods, raising prices in India, like during demand surges, unlike deflation or stagflation. - The index that measures price movement from producer’s perspective is –
(A) CPI
(B) WPI
(C) PPI
(D) GNP deflator
Answer: (C)
Explanation: Producer Price Index (PPI) tracks price changes at the producer level, unlike CPI (consumer) or WPI (wholesale). India is transitioning to PPI for better inflation measurement. - The term ‘Hyperinflation’ is used when inflation is –
(A) More than 3%
(B) More than 10%
(C) Exceeds 50% per month
(D) Exceeds 5% per year
Answer: (C)
Explanation: Hyperinflation, exceeding 50% monthly, erodes purchasing power rapidly, unlike India’s moderate inflation (4–6%), seen in historical cases like Zimbabwe. - Which Indian state has the largest number of MSMEs?
(A) Maharashtra
(B) Tamil Nadu
(C) Uttar Pradesh
(D) Gujarat
Answer: (C)
Explanation: Uttar Pradesh hosts the most MSMEs in India, driven by its large population and small-scale industries like handicrafts, supporting economic decentralization. - Disinvestment in PSUs is done to –
(A) Increase tax base
(B) Reduce fiscal burden
(C) Create employment
(D) Promote agriculture
Answer: (B)
Explanation: Disinvestment, like selling Air India stakes, reduces India’s fiscal burden by lowering PSU subsidies, raising funds for development, unlike tax or employment goals. - The Bretton Woods Conference led to the establishment of –
(A) WTO and UNCTAD
(B) IMF and World Bank
(C) OECD and ADBendedor (D) UNDP and FAO
Answer: (B)
Explanation: The 1944 Bretton Woods Conference established IMF and World Bank, shaping global finance, supporting India’s development through loans, unlike WTO or UNDP. - Regressive tax is –
(A) Income tax
(B) Corporate tax
(C) GST
(D) Wealth tax
Answer: (C)
Explanation: GST, a flat-rate indirect tax, is regressive, impacting lower-income groups more in India, unlike progressive taxes like income tax, which scale with earnings. - The base year for India’s GDP series (as per latest revision) is –
(A) 2004–05
(B) 2011–12
(C) 2012–13
(D) 2015–16
Answer: (B)
Explanation: India’s GDP base year is 2011–12, used for real GDP calculations, reflecting current economic structures, unlike older or newer base years. - The term “Lorenz Curve” represents –
(A) Employment growth
(B) Income distribution
(C) Inflation trends
(D) Capital expenditure
Answer: (B)
Explanation: The Lorenz Curve graphs income distribution, showing inequality in India, where a bowed curve indicates greater disparity, used with Gini coefficient. - The key feature of a ‘command economy’ is –
(A) Market decides everything
(B) Prices are determined by supply and demand
(C) Government controls means of production
(D) Central bank is independent
Answer: (C)
Explanation: In a command economy, the government controls production, unlike India’s mixed economy, where markets and state coexist, distinct from independent central banks. - The “Chakravarty Committee” is associated with –
(A) Industrial Policy
(B) Agricultural reforms
(C) Monetary policy reforms
(D) Education policy
Answer: (C)
Explanation: The Chakravarty Committee (1985) reviewed India’s monetary policy, recommending improvements in credit and inflation control, unlike industrial or agricultural reforms. - Which of the following is a direct instrument of monetary policy?
(A) Repo Rate
(B) Moral Suasion
(C) CRR
(D) Open Market Operations
Answer: (C)
Explanation: CRR, requiring banks to hold reserves with RBI, is a direct monetary policy tool in India, controlling money supply, unlike indirect tools like moral suasion. - GDP at market prices includes –
(A) Factor cost + indirect taxes – subsidies
(B) Factor cost + subsidies – indirect taxes
(C) Factor cost – indirect taxes + subsidies
(D) Factor cost
Answer: (A)
Explanation: GDP at market prices equals factor cost plus indirect taxes (e.g., GST) minus subsidies, reflecting consumer prices in India, unlike factor cost alone. - ‘Equity’ in the capital market refers to –
(A) Debentures
(B) Preference shares
(C) Ownership shares
(D) Fixed deposits
Answer: (C)
Explanation: Equity refers to ownership shares in companies, like stocks traded on India’s NSE, representing investor stakes, unlike debentures or fixed deposits. - What is the key objective of the PM-KISAN scheme?
(A) Employment for rural youth
(B) Housing for farmers
(C) Direct income support to farmers
(D) Free fertilizers
Answer: (C)
Explanation: PM-KISAN, launched in 2019, provides ₹6,000 annually to small farmers in India, offering direct income support, unlike employment or fertilizer schemes. - Which of the following agencies is responsible for publishing CPI inflation data?
(A) RBI
(B) SEBI
(C) Ministry of Finance
(D) National Statistical Office (NSO)
Answer: (D)
Explanation: NSO publishes CPI inflation data in India, tracking consumer price changes, guiding RBI’s policy, unlike SEBI or finance ministry roles. - What is the upper limit for investment under micro enterprise as per MSME classification?
(A) Rs. 25 lakh
(B) Rs. 50 lakh
(C) Rs. 1 crore
(D) Rs. 5 crore
Answer: (C)
Explanation: As per 2020 MSME classification, micro enterprises have investments up to ₹1 crore and turnover up to ₹5 crore, supporting India’s small businesses. - “Minimum Alternate Tax (MAT)” is levied on –
(A) Farmers
(B) Small retailers
(C) Companies that show zero taxable income
(D) Exporters
Answer: (C)
Explanation: MAT ensures companies in India with book profits but zero taxable income (due to exemptions) pay a minimum tax, unlike farmers or retailers. - Which of the following is considered part of external debt?
(A) Government borrowings from RBI
(B) Commercial borrowings from foreign markets
(C) Public Provident Fund
(D) State government’s internal loans
Answer: (B)
Explanation: External debt includes commercial borrowings from foreign markets, like Indian firms’ overseas loans, unlike domestic RBI or PPF borrowings. - Inflation that occurs due to excessive demand is known as –
(A) Cost-push inflation
(B) Demand-pull inflation
(C) Creeping inflation
(D) Galloping inflation
Answer: (B)
Explanation: Demand-pull inflation arises when excessive demand outpaces supply, raising prices in India, like during festival seasons, unlike cost-push or creeping types. - Which of the following is not a tax under GST?
(A) CGST
(B) SGST
(C) IGST
(D) CST
Answer: (D)
Explanation: CGST, SGST, and IGST are GST components in India. CST (Central Sales Tax), an older tax on inter-state sales, was subsumed by GST. - The term “Angel Investor” refers to –
(A) Investor in large infrastructure
(B) High net worth individual investing in startups
(C) Government-owned investor
(D) Cooperative banks
Answer: (B)
Explanation: Angel investors, high net-worth individuals, fund Indian startups, like early-stage tech firms, providing capital and mentorship, unlike infrastructure or government investors. - The term “SWIFT” in banking stands for –
(A) Society for Worldwide Interbank Financial Telecommunication
(B) Simple Wireless Interface for Funds Transfer
(C) Secure Web International Funds Transfer
(D) Software for Web Interbank Transfers
Answer: (A)
Explanation: SWIFT facilitates secure global financial transactions, used by Indian banks for cross-border payments, ensuring efficient interbank communication. - The agency responsible for setting poverty lines in India is –
(A) RBI
(B) NSSO
(C) Planning Commission / NITI Aayog
(D) Finance Commission
Answer: (C)
Explanation: The Planning Commission, now NITI Aayog, sets India’s poverty lines through expert committees (e.g., Tendulkar), unlike NSSO (data collection) or RBI.