Indian Economy – Multiple Choice Questions (MCQs)

1. 13. What is the main objective of the 'Fiscal Responsibility and Budget Management (FRBM) Act' in India?

   • A. To increase government spending
   • B. To reduce the fiscal deficit
   • C. To promote public sector investment
   • D. To control inflation

2. 14. The Goods and Services Tax (GST) in India is a?

   • A. Direct tax
   • B. Indirect tax
   • C. Progressive tax
   • D. Regressive tax

3. 15. What is 'demonetization' as implemented in India in 2016?

   • A. The introduction of new currency notes
   • B. The withdrawal of legal tender status of certain currency notes
   • C. The increase in the printing of currency notes
   • D. The regulation of foreign exchange rates

4. 16. Jan Dhan Yojana' is related to?

   • A. Financial inclusion
   • B. Skill development
   • C. Rural employment
   • D. Sanitation

5. 17. What is the primary aim of the 'Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)' scheme?

   • A. To provide pension to small farmers
   • B. To provide income support to all landholding farmers
   • C. To provide insurance for crop losses
   • D. To promote organic farming

6. 18. The 'Minimum Support Price (MSP)' is announced by the Government of India for?

   • A. Industrial products
   • B. Agricultural crops
   • C. Services sector
   • D. Export items

7. 19. What is the role of the Reserve Bank of India (RBI)?

   • A. To control government expenditure
   • B. To formulate the budget
   • C. To regulate the money supply and supervise banks
   • D. To promote foreign trade

8. 20. Non-Performing Assets (NPAs)' are associated with which sector?

   • A. Agriculture
   • B. Banking
   • C. Manufacturing
   • D. Services

9. 21. What is 'inflation' in the Indian economy?

   • A. A sustained increase in the general price level
   • B. A decrease in the value of the Indian Rupee against foreign currencies
   • C. Rapid economic growth
   • D. A decrease in unemployment

10. 22. The 'Consumer Price Index (CPI)' measures the change in prices of?

    • A. Industrial goods
    • B. Wholesale goods
    • C. Goods and services bought by households
    • D. Exported goods

11. 23. What is 'fiscal deficit' in the context of the Indian budget?

    • A. Excess of revenue over expenditure
    • B. Excess of expenditure over revenue
    • C. Total government borrowing
    • D. Revenue minus expenditure

12. 24. Balance of Payments (BoP)' refers to?

    • A. The difference between exports and imports
    • B. A statement of all transactions made between entities in one country and the rest of the world over a defined period
    • C. The total foreign exchange reserves of a country
    • D. The government's annual financial statement