MCQs on Economy

[Set - 8]

1. The 'Goods and Services Tax' (GST) in India is a:

A) Direct tax
B) Indirect tax
C) Corporate tax
D) Wealth tax

Correct Answer: B) Indirect tax
Explanation: GST is an indirect tax that has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. It is aimed at being comprehensive for most goods and services.

2. Which body is primarily responsible for the regulation of the insurance industry in India?

A) RBI
B) SEBI
C) IRDAI
D) AMFI

Correct Answer: C) IRDAI
Explanation: The Insurance Regulatory and Development Authority of India (IRDAI) is the regulatory body responsible for regulating and promoting the insurance and re-insurance industries in India.

3. The 'Pradhan Mantri Jan Dhan Yojana' aims to increase banking penetration among which segment of the population?

A) Urban upper class
B) Non-resident Indians
C) Rural and urban poor
D) Corporate entities

Correct Answer: C) Rural and urban poor
Explanation: The Pradhan Mantri Jan Dhan Yojana (PMJDY) aims to increase banking services’ accessibility to the rural and urban poor, promoting financial inclusion.

4. The term 'Statutory Liquidity Ratio' (SLR) is used by the RBI to control which aspect of banking?

A) Interest rates
B) Inflation
C) Bank credit
D) Liquidity and credit

Correct Answer: D) Liquidity and credit
Explanation: SLR (Statutory Liquidity Ratio) is a term used by banks to control the credit growth and liquidity by requiring banks to maintain a certain percentage of their net demand and time liabilities in liquid assets.

5. 'Digital India' campaign is primarily aimed at:

A) Enhancing online infrastructure and internet connectivity
B) Promoting digital transactions over cash
C) Both A and B
D) Developing the software export industry

Correct Answer: C) Both A and B
Explanation: ‘Digital India’ is a campaign launched by the Government of India to ensure government services are made available to citizens electronically by improving online infrastructure and by increasing internet connectivity and making the country digitally empowered in the field of technology.

6. 'Startup India' initiative aims to:

A) Facilitate bank loans for large industries
B) Provide tax relief to multinational companies
C) Promote sustainable development goals
D) Foster innovation through funding and incentives

Correct Answer: D) Foster innovation through funding and incentives
Explanation: ‘Startup India’ is a flagship initiative of the Government of India intended to build a strong ecosystem for nurturing innovation and startups in the country that will drive sustainable economic growth and generate large scale employment opportunities.

7. 'National Financial Reporting Authority' (NFRA) was established to:

A) Monitor fiscal deficits of the states
B) Oversee compliance by financial institutions with various regulations
C) Regulate financial reporting by companies
D) Manage RBI’s financial reporting needs

Correct Answer: C) Regulate financial reporting by companies
Explanation: NFRA aims to improve the transparency and reliability of financial statements and information provided by companies, ensuring their compliance with accounting and financial reporting standards.

8. The 'Insolvency and Bankruptcy Code' (IBC) was enacted in India in:

A) 2005
B) 2016
C) 2012
D) 2018

Correct Answer: B) 2016
Explanation: The Insolvency and Bankruptcy Code, 2016, is a bankruptcy law in India seeking to consolidate the existing framework by creating a single law for insolvency and bankruptcy.

9. Which initiative was launched to upgrade the infrastructure of the MSME sector in India?

A) Make in India
B) Digital India
C) Skill India
D) Zero Defect Zero Effect

Correct Answer: D) Zero Defect Zero Effect
Explanation: ‘Zero Defect Zero Effect’ is an initiative launched for the MSME sector under which products that are manufactured for export have to adhere to certain quality standards while ensuring that the manufacturing process does not have a negative impact on the environment.

10. Which body is responsible for the regulation of commodity market transactions in India?

A) SEBI
B) RBI
C) FMC
D) NABARD

Correct Answer: A) SEBI
Explanation: SEBI (Securities and Exchange Board of India) regulates commodity market transactions in India after the merger of the Forward Markets Commission (FMC) with SEBI in 2015.

11. The 'Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)' provides income support to:

A) All farmers
B) Small and marginal farmers
C) Landless agricultural laborers
D) Women farmers

Correct Answer: B) Small and marginal farmers
Explanation: The PM-KISAN scheme provides income support to all small and marginal farmers’ families across the country, aiming to meet their financial needs for procuring inputs related to agriculture and allied activities.

12. 'RERA' stands for:

A) Real Estate Regulatory Authority
B) Rural Economic Regulatory Agency
C) Renewable Energy Regulations Act
D) Real Estate Reforms Act

Correct Answer: A) Real Estate Regulatory Authority
Explanation: RERA, or Real Estate Regulatory Authority, was established to regulate and promote the real estate sector in India, ensuring the sale of plot, apartment, or building, or sale of a real estate project, in an efficient and transparent manner.

13. Which initiative was launched to improve the infrastructure for charging electric vehicles across India?

A) AMRUT
B) UDAY
C) Smart City Mission
D) FAME India

Correct Answer: D) FAME India
Explanation: FAME India (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) aims to support the development of electric and hybrid vehicle markets and their manufacturing ecosystem to achieve self-sustenance.

14. 'Operation Greens' aims to stabilize the supply of which commodities?

A) Pulses and cereals
B) Oilseeds and vegetables
C) Tomato, Onion, and Potato (TOP)
D) Fruits and nuts

Correct Answer: C) Tomato, Onion, and Potato (TOP)
Explanation: Operation Greens aims to stabilize the supply chain for Tomato, Onion, and Potato (TOP), preventing fluctuations in the prices and ensuring farmer sustainability.

15. The 'Atal Innovation Mission' is a government initiative designed to promote:

A) Cultural heritage
B) Innovation and entrepreneurship
C) Traditional arts and crafts
D) Rural tourism

Correct Answer: B) Innovation and entrepreneurship
Explanation: The Atal Innovation Mission (AIM) is aimed at fostering curiosity, creativity, and imagination in young minds and inculcating skills such as design thinking, problem-solving, adaptive learning, and physical computing among others.

16. 'Electoral Bonds' in India can be purchased from which institution?

A) Reserve Bank of India
B) State Bank of India
C) Ministry of Finance
D) Securities and Exchange Board of India

Correct Answer: B) State Bank of India
Explanation: Electoral Bonds can be purchased by any citizen of India or entities incorporated or established in India from specified branches of the State Bank of India.

17. Inflation in an economy can be measured by changes in:

A) Consumer Price Index (CPI)
B) Gross Domestic Product (GDP)
C) Fiscal Deficit
D) Balance of Trade

Correct Answer: A) Consumer Price Index (CPI)
Explanation: CPI measures changes in the price level of a market basket of consumer goods and services purchased by households, reflecting the rate of inflation.

18. Which indicator best reflects the economic activity of a country?

A) Stock market index
B) GDP growth rate
C) Unemployment rate
D) National debt percentage

Correct Answer: B) GDP growth rate
Explanation: GDP growth rate is a key indicator that reflects the economic activity and health of a country’s economy, showing how much it has grown or contracted in a specific period.

19. Fiscal policy in India is formulated by:

A) The Reserve Bank of India
B) The Ministry of Finance
C) Securities and Exchange Board of India
D) The Planning Commission

Correct Answer: B) The Ministry of Finance
Explanation: The Ministry of Finance is responsible for formulating fiscal policy, which involves government revenue and expenditure decisions.

20. Which phenomenon occurs when the supply of goods and services in an economy decreases leading to a rise in prices?

A) Stagflation
B) Hyperinflation
C) Deflation
D) Cost-push inflation

Correct Answer: D) Cost-push inflation
Explanation: Cost-push inflation occurs when the overall prices increase (inflation) due to increases in the cost of wages and raw materials.

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