MCQs with Solutions for all Competitive Examinations

Indian Economy MCQ for Competitive Examination

Q. 121
Foreign Exchange Management Act came into force in the year

(A) 2000
(B) 1973
(C) 2001
(D) 1991

Answer: (A) 2000
Explanation: N/A

Q. 122
The International Monetary Fund (IMF) was established in the year

(A) 1950
(B) 1945
(C) 1943
(D) 1948

Answer: (B) 1945
Explanation: N/A

Q. 123
International Bank for Reconstruction and Development (IBRD) was established in

(A) 1950
(B) 1942
(C) 1944
(D) 1972

Answer: (C) 1944
Explanation: N/A

Q. 124
Where is the headquarters of the International Monetary Fund?

(A) New York
(B) Geneva
(C) Paris
(D) Washington DC

Answer: (D) Washington DC
Explanation: N/A

Q. 125
The Headquarter of World Trade Organisation is at

(A) Geneva
(B) New York
(C) Washington DC
(D) London

Answer: (A) Geneva
Explanation: N/A

Q. 126
The Principle of Population given by

(A) Thomas Robert Malthus
(B) Abraham Maslow
(C) Adam Smith
(D) David Ricardo

Answer: (A) Thomas Robert Malthus
Explanation: N/A

Q. 127
When too much money is chasing too few goods, the situation is

(A) Deflation
(B) Inflation
(C) Recession
(D) Stagflation

Answer: (B) Inflation
Explanation: N/A

Q. 128
Bank Rate is the rate of interest

(A) At which public borrows money from Commercial Bank
(B) At which public borrows money from RBI
(C) At which Commercial Banks borrow money from RBI
(D) At which Commercial Banks borrow money from public

Answer: (C) At which Commercial Banks borrow money from RBI
Explanation: N/A

Q. 129
The major aim of devaluation is to

(A) Encourage imports
(B) Encourage exports
(C) Encourage both exports and imports
(D) Discourage both exports and imports

Answer: (B) Encourage exports
Explanation: N/A

Q. 130
The balance of payments of a country is in equilibrium when the

(A) Demand as well as supply of the domestic currency are the highest
(B) Demand for the domestic currency is equal to its supply
(C) Demand for the domestic currency is the highest
(D) Demand for the domestic currency is the lowest

Answer: (B) Demand for the domestic currency is equal to its supply
Explanation: N/A

Q. 131
A favourable Balance of Trade of a country implies that

(A) Imports exceed Exports
(B) Exports exceed Imports
(C) Both Imports and Exports are equal
(D) Rising Imports and Falling Exports

Answer: (B) Exports exceed Imports
Explanation: N/A

Q. 132
Which country is the largest producer of tobacco?

(A) China
(B) India
(C) Thailand
(D) Philipines

Answer: (A) China
Explanation: N/A

Q. 133
Big Push Model is a concept in development economics or welfare economics put forwarded by

(A) J. Keynes
(B) R. Rodan
(C) Milton Friedman
(D) Daniel Kahneman

Answer: (B) R. Rodan
Explanation: N/A

Q. 134
Which of the following term is not related to banking?

(D) Fixed Deposit

Answer: (B) NEER
Explanation: CRR-Cash Reserve Ration; NEER-Nominal Effective Exchange Rate; SLR-Statutory Liquidity Ratio

Q. 135
Stagflation refers to a situation which is characterized by

(A) Stagnant employment and deflation
(B) Deflation and rising employment
(C) Inflation and rising employment
(D) Inflation and rising unemployment

Answer: (D) Inflation and rising unemployment
Explanation: N/A

Q. 136
The headquarters of Asian Development Bank is at

(A) Manila
(B) Beijing
(C) Shanghai
(D) Jakarta

Answer: (A) Manila
Explanation: N/A

Q. 137
Equilibrium price is the price when

(A) Supply is greater than demand
(B) Supply is less than demand
(C) Demand is very high
(D) Supply is equal to demand

Answer: (D) Supply is equal to demand
Explanation: N/A

Q. 138
The terms ‘Bull’ and ‘Bear’ are associated with

(A) Banking
(B) Foreign Trade
(C) Stock Market
(D) Internet Trade

Answer: (C) Stock Market
Explanation: N/A

Q. 139
‘Closed Economy’ means

(A) No provision for public sector
(B) No provision for private sector
(C) Economy policy not well defined
(D) A country having no imports and exports

Answer: (D) A country having no imports and exports
Explanation: N/A

Q. 140
‘Take-off stage’ in an economy means

(A) Steady growth begins
(B) Economy is stagnant
(C) Economy is about to collapse
(D) All controls are removed

Answer: (A) Steady growth begins
Explanation: N/A

Q. 141
One of the features of a free market economy is

(A) Active state intervention
(B) Public ownership of factors of production
(C) Rationing and price control
(D) Consumer’s sovereignty

Answer: (D) Consumer’s sovereignty
Explanation: N/A

Q. 142
A persistent fall in the general price level of goods and services is known as

(A) Inflation
(B) Depression
(C) Deflation
(D) Recession

Answer: (C) Deflation
Explanation: N/A

Q. 143
In economics, Production means

(A) Farming
(B) Manufacturing
(C) Creating utility
(D) Making

Answer: (C) Creating utility
Explanation: N/A

Q. 144
FDI stands for

(A) Future Direct Investment
(B) Foreign Direct investment
(C) Further Direct Investment
(D) Fund for Direct Investment

Answer: (B) Foreign Direct investment
Explanation: N/A

Q. 145
Who said ‘Supply creates its own Demand’?

(A) Adam Smith
(B) J.B. Say
(C) Marshall
(D) Ricardo

Answer: (B) J.B. Say
Explanation: N/A

Q. 146
Pegging up of a currency means, fixing the value of a currency

(A) At a constant level
(B) At a lower level
(C) At a higher level
(D) Leaving it to market forces

Answer: (A) At a constant level
Explanation: N/A

Q. 147
Regional Rural Banks were started in the year

(A) 1956
(B) 1972
(C) 1964
(D) 1978

Answer: (B) 1972
Explanation: N/A

Q. 148
During a period of inflation tax rate should 

(A) Increase
(B) Decrease
(C) Remains constant
(D) Fluctuate

Answer: (A) Increase
Explanation: N/A

Q. 149
A demand curve which is parallel to the horizontal axis showing quantity has the price elasticity equal to

(A) Zero
(B) One
(C) Less than one
(D) Infinity

Answer: (D) Infinity
Explanation: N/A

Q. 150
Perfectly inelastic demand is equal to

(A) One
(B) Zero
(C) Infinity
(D) Greater than one

Answer: (B) Zero
Explanation: N/A

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