10. Money Important MCQ Indian Economy

1. The RBI issues currency notes under the:

(a) Fixed Fiduciary System

(b) Maximum Fiduciary System

(c) Minimum Reserve System

(d) Proportional Reserve System

2. During period of inflation, rates should:

(a) increase

(b) decrease

(c) remain constant

(d) fluctuate

3. The existence of a parallel economy or Black Money

(a) makes the economy more competitive

(b) makes the monetary policy less effective

(c) ensures a better distribution of income and wealth

(d) ensures increasing productive investment

4. Consider the following statements :

In order to increase the supply of the money,

I. The amount of rupee coins and printed paper notes increase in the same proportion.

II. The amount of rupee-coin can not increase commensurate with the paper money.

III. Paper money is the best form of money.

Which of the statements given above is/are correct ?

(a) I only 

(b) II only

(c) I and II

(d) II and II 

5. In the parlance of economy/commerce, what is “Gilt-edged market’ ?

(a) Gold and silver market 

(b) Industrial securities market

(c) Market of safe (such as Government) securities

(d) Market for software technology/service products

6. Foreign investments in India are normally known as..

(a) FDI

(b) CII

(c) SFI

(d) SME

(e) MDI

7. Many a time we read a term in the financial newspaper GDR. What is the full form of the same ?

(a) Global Depository Receipts

(b) Global Domestic Ratio

(c) Gross Domestic Revenue

(d) Gross Depository Revenue

(e) None of these 

8. The stock market index of London Stock Market is referred as:

(a) Sensex


(c) Footsic (FTSE)

(d) Bullish

(e) None of these

9. SEBI bans some companies for their role in F&O’ scam, was the news in some major newspapers. What is the full form of “F & O’ ?

(a) Future & Options

(b) Future & Operation

(c) Free & Operationalie 

(d) Fair & Optimum

(e) None of these

10. Many times we read the term ‘ECB’ in financial newspapers. What is the full form of ECB?

(a) External Commercial Borrowing

(b) External Credit and Business

(c) Essential Commercial Borrowing 

(d) Essential Credit and Business

(e) None of these

11. Which of the following is NOT the name of the sensitive index of any global stock exchange?

(a) Nasdaq

(b) Nikkei

(c) Kospi

(d) Dow 

(e) Combix

12. Long term funds in the capital market can be raised either by borrowing from certain institutions or through:

(a) issue of note

(b) taking loan from Government 

(c) Issue of securities

(d) taking loan from foreign institutions 

13. What is the name given to the common currency of the European Union ?

(a) Rupee

(b) Rouble

(c) Franc s

(d) Euro

14. Devaluation of currency leads to:

(a) expansion of export trade

(b) contraction of import trade

(c)expansion of import substitution

(d) all of the above

Important MCQ Indian Economy

15. The currency of Thailand is:

(a) Bhat

(b) Rupiah

(c) Yuan

(d) Yen

16. Which one of the following statements is correct?

(a) Good money drives bad money out of circulation

(b) Bad money drives good money out of circulation

(c) Good and bad money cannot circulate together

(d) Cannot say

17. Who has the sole right to issue paper currency in India?

(a) The Government of India

(b) The Finance Commission

(c) The Central Bank of India

(d) The Reserve Bank of India

18. Full convertibility of a rupee means :

(a) purchase of foreign exchange for rupees freely

(b) payment for imports in terms of rupees 

(c) repayment of loans in terms of rupees

(d) determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply

19. The present Indian monetary system is based on :

(a) Gold Reserve System

(b) Proportional Reserve System

(c) Convertible Currency System

(d) Minimum Reserve System

20. The term stagflation refers to a situation where:

(a) growth has no relation with the change in prices

(b) rate of growth and prices both are decreasing

(c) rate of growth is faster than the rate of price increase

(d) rate of growth is slower than the rate of price increase

21. The major aim of devaluation is to:

(a) Encourage exports 

(b) Encourage imports

(c) Encourage both exports and imports

(d) Discourage both exports and imports

22. Which amongst the following currencies is the costliest?

(a) French Franc

(b) Swiss Franc 

(c) Euro

(d) Pound Sterling

23. Which of the following Mahatma Gandhi series of currency notes issued by the RBI has ‘ecology’ depicted

(a) Rs. 500/-

(b) Rs. 100/-

(c) Rs. 50/-

(d) Rs. 5/- 

Important MCQ Indian Economy

24. Which of the following Mahatma Gandhi series currency notes issued by the RBI has a drawing of the ‘Parliament House’ depicted on it ?

(a) Rs. 500/-

(b) Rs. 100/-

(c) Rs. 50/-

(d) Rs. 10/-

25. Inflation is caused by :

(a) Increase in supply of goods

(b) Increase in cash with the Government

(c) Decrease in money supply

(d) Increase in money supply

26. Devaluation usually causes the internal prices to:

(a) Fall

(b) Rise

(c) Remain unchanged

(d) None of these

27. Currency notes of Rs. 2 denomination and above are liabilities of :

(a) Government of India

(b) Reserve Bank of India

(c) State Bank of India

(d) All of the above

28. Under the minimum reserve system, the Reserve Bank of India as the sole authority of note issue is required to maintain assets worth not less than:

(a) 85 crore of rupees

(b) 115 crore of rupees

(c) 200 crore of rupees

(d) 210 crore of rupees

29. In India, one-rupee coins and notes and subsidiary coins are issued by:

(a) The Reserve Bank of India

(b) The Central Government

(c) The State Bank of India

(d) The Unit Trust of India

30. New capital issue is placed in:

(a) Primary market 

(b) Secondary market

(c) Grey market 

(d) Black market

31. The Process of curing inflation by reducing money supply is called:

(a) Cost-push inflation

(b) Down-pull inflation

(c) Disinflation

(d) Reflation

32. Which of the following organizations is known as Market Regulator in India?

(a) IBA

(b) SEBI 

(c) AMFI

(d) NSDL

(e) None of these

33. Which of the following is NOT a part of India’s Money Market ?

(a) Bill Markets 

(b) Call Money Market

(c) Banks

(d) Mutual Fund

(e) Indian Gold Council 

Important MCQ Indian Economy

34 Yen is the currency of . 

(a) China

(b) Taiwan

(c) North Korea 

(d) South Korea

(e) None of these

35. Which of the following is the currency of Dubai ?

(a) Taka

(b) Dinar

(c) Dollar 

(d) Dirham

(e) None of these

36. Earlier it was thought safe to allow each financial institution to carry out only one type of finance service. But now Banks are selling shares, Insurance companies can sell banking services. These New financial conglomerates are colloquially referred to as :

(a) Multinationals

(b) Financial Supermarkets

(c) Market Regulators

(d) Brand Promoters 

(e) None of these

37. Expand the term LIBOR:

(a) London Inter-Bank offered Rate 

(b) London Inter-Bank Operational Rate

(c) London Inter-Bank Offsite Rate

(d) London Inter-Bank Onsite Rate

(e) None of these

38. Which of the following agencies: recently laid down guidelines for foreign companies who wish to raise money from the Indian capital markets ?

(a) RBI 

(b) IRDA

(c) Registrar of Companies 

(d) SEBI

(e) None of these

39. Sheqel is the currency of:

(a) Israel

(b) Kenya

(c) Iran

(d) Iraq

(e) None of these

40. Shilling is the currency of :

(a) Kenya

(b) South Korea

(c) Israel

(d) Ghana

(e) None of these

41. As we all know, the Indian Money Market is divided in three sectors, namely organised sector, unorganised sector and cooperative sectors. Call the money market is the part of which of the following?

(a) Organised Sector

(b) Unorganised Sector

(c) Co-operative Sector

(d) Only ‘a’ & “b’

(e) AIl ‘a’, “b’ and ‘c’

42. At present Indian Rupee is :

(a) partially convertible on current account

(b) fully convertible on current account

(c) partially convertible on capital account

(d) fully convertible on capital account

(e) fully convertible on current and capital account both

Important MCQ Indian Economy

43. Which of the following terms is NOT a financial term ?

(a) Investment

(b) Core Banking Solution

(c) RTGS

(d) El Nino effect

(e) All are financial terms

44. Which of the following is NOT a mode of foreign capital Inflow to India ?

(a) FDI

(b) FPI

(c) NRI Accounts

(d) No-Frills Accounts

(e) All these are valid foreign capital inflow

45. Many a time we read the term PPP in financial newspapers.

What is the full form of the PPP?

(a) Purchasing Power Parity

(b) Public Per capita Power

(c) Per capita Potential Purchases 

(d) Present Purchasing Power

(e) None of these

46. Dinaris the currency of which of the following countries?

(a) Sudan

(b) Myanmar

(c) Afghanistan

(d) Pakistan

(e) Iraq

47. Lot of discussion is going on these days on the issue of Participatory Notes’ (P Notes) used in the financial sector/money market. What is a Participatory Note ?

(a) It is an offshore derivative instrument used by overseas buyers/investors who buy shares of Indian companies listed in Indian Stock Exchange anonymously.

(b) It is nothing but another name of the banking operation by which banks exchange Indian Rupees into US Dollars without depositing a single rupee in the account of the party who are NRIs. The entire operation is carried out by the banks solely on the basis of the credit and goodwill of the NRI party.

(c) It is nothing but a type of undertaking given to the banks that they should continue investing money in stock markets on behalf of NRIs and in case the market crashes NRIs will make the losses good without delay.

(d) All ‘a’, ‘b’ and ‘c

(e) None of these

48. Which of the following is the correct definition of the term ‘Commercial Papers’?

(a) It is nothing but the popular name of the judicial stamp papers used to register financial transactions.

(b) It is one of the instruments through which corporates raise debt from the market.

(c) It is the name of the ‘Certificate of Deposits’ provided by the Banks to its retail customers.

(d) Both ‘a and ‘b

(e) All’a’, b’ and ‘c’

49. Many a time we read in the newspapers the term ‘Hot Money’. Which of the following is the correct definition of Hot Money ?

(a) This is the fund which is dumped into a country to get the advantage of a favourable interest rate and hence brings higher returns.

(b) This is the fund which is provided by a bank in US Dollar at very short notice and at a very high rate of interest and for a longer period of repayment.

(c) This is the fund which is pushed into the market through Hawala or some other such illegal method and is sometimes referred to also as Black Money.

(d) Both ‘a and b

(e) Both ‘a’ and ‘ c

50. The European Union has adopted which of the following as a common currency ?

(a) Dollar

(b) Dinar

(c) Yen

(d) Peso

(e) Euro

Important MCQ Indian Economy

51. Which of the following is known as Plastic Money ?

1. Demand Draft

2. Credit Card

3. Debit Card

(a) Only 1

(b) Only 2

(c) Only 3

(d) Both 2 and 3

(e) All 1, 2 and 3

52. Many a time we see a term in newspaper IPO. What is the full form of the same ?

(a) Initial Public Offer

(b) Indian Public Offer

(c) Institutional Purchase Offer

(d) Industrial Purchase Offer

(e) Indian Purchase Offer

53. Federal Reserves is the financial organisation of 😮

(a) USA

(b) Britain

(c) France

(d) Japan

(e) Germany

54. Which of the following organisations is known as the

market regulator in India ?

(a) SEBI

(b) IBA

(c) AMFI

(d) NSDL

(e) None of these

55. Many times we read the term Hot Money in the newspaper.

What is/are the characteristics of Hot Money?.

1. The term is used for fresh currency notes issued by the RBI.

2. It is the fund which flows in the market to take advantage of high interest rates.

3. It is the fund which is thrown in the market to create imbalance in the stock markets.

(a) Only 1

(b) Only 2

(c) Only 3

(e) None of these

(d) All 1, 2 and 3

56. What is an Indian Depository Receipt (IDR)?

(a) A deposit account with a public sector Bank.

(b) A depository account with any of the Depositories in India.

(c) An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company.

(d) An instrument in the form of deposit receipt issued by Indian depositories

(e) None of these

Important MCQ Indian Economy

57. In the Capital Market, the term arbitrage is used with reference to:

(a) purchase of securities to cover the sale

(b) sale of securities to reduce the loss on purchase

(c) simultaneous purchase and sale of securities to make profits from price

(d) variation in different markets

(e) Any of the above

58. Currency Swap is an instrument to manage: a

(a) currency risk,

(b) interest rate risk

(c) currency and interest rate risk

(d) cash flows in different currencies

(e) any of the above

59. Money Laundering normally involves :

(a) placement of funds

(b) layering of funds

(c) integration of funds 

(d) all of a, b and c

(e) none of a, b and c 

60. Capital Market Regulator is :

(a) RBI

(b) IRDA

(c) NSE 

(d) BSE

(e) SEBI

61. FDI refers to

(a) Fixed Deposit Interest

(b) Fixed Deposit Investment

(c) Foreign Direct Investment

(d) Future Derivative Investment 3tadooi2

(e) None of these

62. What is Call Money?

(a) Money borrowed or lent for a day or overnight

(b) Money borrowed for more than one day but upto 3 days

(c) Money borrowed for more than one day but upto 7 days

(d) Money borrowed for more than one day but upto 14 days

(e) None of these

63. Which is the first Indian Company to be listed on NASDAQ ?

(a) Reliance 

(b) TCS

(c) HCL

(d) Infosys

(e) None of these

64. Which is the following is the regulator of the credit rating agencies in India ?

(a) RBI 

(b) SBI 


(d) SFBI

(e) None of these

Important MCQ Indian Economy

65. Marny times we read about Future Trading in newspapers. What is ‘Future Trading’ ?

1. It is nothing but a trade between any two stock exchanges wherein it is decided to purchase the stocks of each other on a fixed price throughout the year.

2. It is an agreement between two parties to buy or sell an underlying asset in the future at a predetermined price.

3. It is an agreement between stock exchanges that they will not trade the stocks of each other under any circumstances in future or for a given period of time.

(a) Only 1

(b) Only

(c) Only 3

(d) All 1, 2 and 3

(e) None of these

66. Inflation in India is measured on which of the following indexes/indicators?

(a) Cost of Living Index (CLI)

(b) Consumer Price Index (CPI)

(c) Gross Domestic Product (GDP)

(d) Wholesale Price Index (WPI)

(e) None of these

67. Very often we read in newspapers/magazines about ‘Sovereign Wealth Funds’. Which of the following is the correct description of the same ? 

(a) These are the funds or the reserves of a government YRS Aor central bank of a country which are invested further to earn profitable returns

(b) These are the funds which were accumulated by some people over the years but were not put in active circulation as they retain them as Black Money for several years

(c) The funds which are created to be used as relief funds or bailout packages are known as sovereign funds.

(d) Both b and ‘c

(e) None of these

68. In a company the use of price sensitive corporate information by the company-people to make gains or cover losses is known as

(a) inside trading

(b) future trading

(c) foreign trading

(d) stock trading

(e) none of these

69. Which Of the following cannot be called a DebtInstrument as referred to in financial transactions?

(a) Certificate of Deposits 

(b) Bonds

(c) Stocks

(d) Commercial Papers

(e) Loans

70. The actual return of an investor is reduced sometimes as the prices of the commodities go up all of a sudden. In financial sector this type of phenomenon is known as:

(a) Probability risk

(b) Market risk

(c) Inflation risk

(d) Credit risk

(e) None of these

71. When the prices of commodities, goods and services start declining consistently, the phenomenon is known as:

(a) Discount yield

(b) Deflation

(c) Negative growth

(d) Market capitalism

(e) None of these

72. Which of the following policies of the financial sectors is basically designed to transfer local financial assets into foreign financial assets freely and at market determined exchange rates ? Policy of:

(a) Capital Account Convertibility

(b) Financial Deficit Management 

(c) Minimum Support Price

(d) Restrictive Trade Practices

(e) None of these

Important MCQ Indian Economy

73. As we all know, the Wholesale Price Index is divided into five main commodity groups. Which of the following is NOT considered separately as a group while calculating Wholesale Price Index (WPI) ?

(a) Services and/or Production by Public Sector Units

(b) Agriculture

(c) Mining

(d) Manufacturing

(e) Exports and Imports

74. The investments done by ‘those financial entities which were launched or incorporated in a foreign country but are investing in an Indian Venture in India’ are generally

known as:

(a) Patent Money 

(b) Private Equity

(c) Foreign Institutional Investment 

(d) Current Account Money

(e) None of these

75. When was the decimal coinage system introduced in India?

(a) 1947

(b) 1950

(c) 1957 

(d) 1960 

76. What was the Saudi Arabian currency called ?

(a) Dirham

(b) Peso

(c) Dinar

(d) Riyal 

77. In which of the following years India switched over to decimal currencies ?

(a) 1955

(b) 1956

(c) 1957

(d) 1960

78. Bolivar is monetary unit of:

(a) Venezuela

(b) Brazil

(c) Bolivia

(d) Belarus

79. In which year the Indian rupee was devalued two times within a month ?

(a) 1990

(b) 1991 

(c) 1994 

(d) 1999

80. During which Five Year Plan the price level in the Indian Economy should decline ?

(a) Plan I

(b) Plan II

(c) Plan IV 

(d) Annual Plans

Important MCQ Indian Economy

81. In India currency-notes issue system is based on:

(a) Proportional Reserve System

(b) Minimum Reserve System

(c) Fixed Exchange Rate System

(d) Fully Convertibility System

82. Devaluation of Rupee was last time made on :

(a) July, 1991

(b) July, 1993

(c) July, 1997

(d) July, 2001

83. The one rupee note bears the signature of the:

(a) Secretary, Ministry of Finance

(b) Governor, RBI

(c) Finance Minister 

(d) None of these

84. Word ‘Bull and Big’ are associated with which branch of commercial activity

(a) Foreign Trade

(b) Banking

(c) Share Market

(d) Manufacturing

85. Which one of the following statements about Foreign exchange reserves of India, is NOT true?

(a) It includes foreign currency assets and gold holdings of Reserve Bank of India

(b) It is maintained with the Reserve Bank of India

(c) Special Drawing Rights (SDRs) are not included in it

(d) Presently foreign exchange situation is satisfactory in India

86. Consider the following statements and select the correct answer from the code given below

Assertion (A): Devaluation of a currency may promote export.

Reason (R) Price of the country’s product in the international market may fall due to devaluation.


(a) Both A and R are true and R is the correct explanation of A

(b) BothA and Rare true but R is not a correct explanation of A

(c) A is true but R is false but o moitstogeiri 

(d) A is false butR is true 

87. Euro Is the official currency of :

(a) all the States of Europe

(b) all the States of the European Union

(c) only 12 of the States of the European Union

(d) only 10 of the States of the European Union

88. Which of the following statements is related to Bombay Stock Exchange, is correct?

(a) It is the oldest stock exchange of India

(b) It is known by the name of Dalal Street

(c) It’s share index is known by the name of SENSEX

(d) All of the above

89. In Indian currency, the One Rupee Note is issued under the signature of :

(a) Governor of Reserve Bank of India 

(b) President of India

(c) Finance Secretary, Ministry of Finance, Government of India

(d) Finance Minister, Government of India

90. Which of the following is NOT a speculator in the Stock Exchange?

(a) Bull 

(b) Bear

(c) Brokero 

(d) Stag

91. If over a given period of time both prices and money income have been doubled, the real income will be:

(a) doubled

(b) halved

(c) unchanged

(d) prices do not affect real income 

Important MCQ Indian Economy

92. Convertibility of the Rupee as it exists at present means :

(a) Rupee is convertible into foreign currencies for all types of transactions

(b) Rupee is convertible into foreign currencies for trade transactions only

(c) Rupee is convertible into foreign currencies for all current transactions only

(d) Rupee is convertible into foreign currencies for capital transactions only

93. Commercial paper is a source of credit for which one of the following?

(a) Corporate Industry

(b) Small Scale Industries

(c) Commercial Banks 

(d) Foreign Banks

94. When was the decimal method introduced in the Indian Monetary System?

(a) 1950

(b) 1954

(c) 1957

(d) 1960

95. BSE Sensex is an index to measure ups and downs in the share market. The number of companies covered under the index are:

(a) 30

(b) 50

(c) 100

(d) 150

96. Who formulates the monetary policy in India ?

(a) SEBI 

(b) RBI

(c) Finance Ministry

(d) Planning Commission

97. The question of full capital account convertibility of Indian Money (Rupee) was examined by the committee known as:

(a) Vaghul Committee

(b) Rangrajan Committee

(c) Tarapore Committee II

(d) Hashim Committee

98. Inside trading is related to:

(a) Share Market

(b) Horse racing

(c) Taxation

(d) International trade

99. The Government of India has replaced FERA by:

(a) The Competition Act

(b) The FEMA 

(c) The Monopolies Act

(d) The MRTP Act 

100. The base of Consumer Price Index (CPI) for industrial workers has been shifted from 1982 to :

(a) 1998 

(b) 2000 

(c) 2001 

(d) 2002

101. The basis of determining dearness allowance (d.a.) to Government employees in India is:

(a) National Income

(b) Consumer price index

(c) Standard for living it 

(d) Per Capita Income

102. In calculation of index of wholesale prices which one of the following sectors is assigned maximum weightage?

(a) Food articles

(b) Non-food articles

(c) Fuel, power, light and lubricants 

(d) Manufactured products

103. The most popular measure of inflation in India is:

(a) General price rise

(b) Wholesale price index 

(c) Consumer Price Index

(d) Consumer price index for industrial workers

104. Devaluation of rupee in India was first introduced in the year

(a) 1949

(b) 1966

(c) 1972

(d) 1990

Important MCQ Indian Economy

105. Base year for estimation of Gross Domestic Product at constant prices in India, at present, is:

(a) 1999-2000

(b) 2000-2001

(c) 2002-2003

(d) 2006-2007

106. In October 2009, a decision has been taken to shift thee Wholesale Price Index base year from 1993-94 to :

(a) 2001-2002

(b) 2002-2003

(c) 2003-2004

(d) 2004-2005

107. Treasury bills are sold in India by 8io srit tslsteno

(a) Reserve Bank of India

(b) State Governments

(c) Commercial Banks

(d) SEBI

108. Money multiplier in India is defined as : 

(a) Broad Money / Base Money 

(b) Broad Money / Reserve Money

(c) Reserve Money / Base Money

(d) Base Money / Reserve Money

109. The headquarter of RBI is situated at:

(a) Delhi

(b) Kolkata

(c) Chennai

(d) Mumbai

110. When did the ‘naya paisa’ introduced with the decimal system of coinage, become paise ?

(a) April 1, 1957

(b) October 2, 1961

(c) June 1, 1964

(d) April 1, 1965

111. From which year was the FEMA promulgated ?

(a) 1999

(b) 2000

(c) 2002

(d) 2003

112. Tick mark which is incorrect about inflation: iw

(a) Inflation indicates the rise in the price of a basket of commodities on a point-to-point basis.

(b) The inflation rate in India is calculated on the basis of the wholesale price index. 

(c) For some commodities retail prices are also considered for measurement of inflation.

(d) Inflation rate going down does not mean prices are declining 

113. Arise in SENSEX means:

(a) a rise in prices of shares of all companies registered with Bombay Stock Exchange 

(b) a rise in prices of shares of all companies registered with the National Stock Exchange.

(c) an overall rise in prices of shares of group up companies registered with Bombay Stock Exchange.

(d) a rise in prices of shares of all companies belonging to a group of companies registered with Bombay Stock Exchange.

114. Consider the following statements:

The Indian rupee is fully convertible :

1.in respect of Current Accounts of Balance of Payment

2. in respect of Capital Accounts of Balance of Payment

3. into Gold

Which of these statement(s) is/are correct ?

(a) 1 alone

(b) 3 alone

(c) 1 and 2

(d) 1, 2 and 3 

115. Gilt-edged market means:

(a) bullion market

(b) market of Government securities

(c) market of guns

(d) market of pure metals

116. The new series of Wholesale Price Index (WPI) released by the Government of India is with reference to the base prices of:

(a) 1981-82

(b) 1990-91

(c) 1993-94

(d) 1994-95

Important MCQ Indian Economy

117.Consider the following:

1. Market borrowings 

2. Treasury bills.

3. Special securities issued to RBI

Which of these is/are component(s) of internal debt ?

(a) 1 only 

(b) 1 and 2

(c) 2 only

(d) 1, 2 and 3

118. Consider the following

1. Currency with the public

2. Demand deposits with banks 

3. Time deposits with banks

Which of these are included in Broad Money (M3) in India ?

(a) 1 and 2 

(b) 1 and 3

(c) 2 and 3

(d) 1, 2and 3

119.Consider the following statements :

Full convertibility of the rupee may mean :

1. Its free float with other international currencies.

2.  Its direct exchange with any other international currency at any prescribed place inside and outside the country.

3. It acts just like any other international currency.

Which of these statements are correct ?

(a) 1 and 2 

(b) 1 and 3

(c) 2 and3

(d) 1, 2 and 3 

120. Debenture holders of a company are its :

(a) shareholders 

(b) creditors

(c) debtors is

(d) directors

121.What is Indo Next which was launched in January,


(a) A new scheme to promote Indian tourism.

(b) A new Scheme To Promote Export Of Indian Handicrafts.

(c) An association of the Non-Resident Indians to organise Bharatiya Diwas every year in India.

(d) An alternative trading platform being promoted by the Mumbai Stock Exchange and Regional Stock Exchange

122. Tarapore Committee was associated with which one of the following?

(a) Special Economic Zone 

(b) Fully Capital Account Convertibility

(c) Effect of oil-prices on the Indian Economy.

(d) Foreign Exchange Reserve

123.Which one of the following pairs is NOT correctly matched?

    Country                         Share Market

(a) Japan                          Nikkei

(b) Singapore                   Shcomp

(c) UK                               FTSE

(d) USA                            Nasdaq

124.Which one of the following statements is an appropriate description of deflation?

(a) It is a sudden fall in the value of a currency against other currencies.

(b) It is a persistent recession in both the financial and real sectors of the economy.

(c) It is a persistent fall in the general price level of goods and services.

(d) It is a fall in the rate of inflation over a period of time.

125.In the parlance of financial investments, the term “bear’ denotes

(a) An investor who feels that the price of a particular security is going to fall.

(b) An investor who expects the price of particular shares to rise

(c) A shareholder or a bondholder who has an interest in a company, financial or otherwise.

(d) Any lender whether by making a loan or buying a bond

126.Which of the following is/are treated as artificial currency ?

(a) ADR 

(b) GDR

(c) SDR

(d) Both ADR and SDR

127.Consider the following statements: 

In India, taxes on transactions in Stock Exchange and Future Markets are:

1. levied by the Union 2. collected by the States

Which of the statements given above is/are correct ? 

(a) 1 only

(b) 2 only

(c) Both 1 and 2 

(d) Neither 1 nor 2 ()

128.Microfinance is the provision of financial services to people of low-income groups. This included both the consumers and self-employed. The service/services rendered under microfinance is / are:

1. Credit facilities 

2. Saving facilities

3. Insurance facilities

4. Fund Transfer facilities

Select the correct answer using the codes given below the lists:

(a) 1 only

(b) 1 and 4 only

(c) 2 and 3 only

(d) 1, 2, 3 and 4

Important MCQ Indian Economy

129.Economic growth is usually coupled with:

(a) Deflation

(b) Inflation

(c) Hyperinflation

(d) Stagflation

130.A rapid increase in the rate of inflation is sometimes attributed to the ‘Base Effect’. What is the Base Effect ?

(a) It is the impact of drastic deficiency in supply due to failure of crops

(b) It is the impact of the surge in demand due to rapid economic growth

(c) It is the impact of the price levels of previous year on the calculation of inflation rate

(d) None of these

131.Which of the following measures would result in an increase in the money supply in the economy ?

1. Purchase of government securities from the public by the Central Bank

2. Deposit of currency in commercial banks by the public

3. Borrowing by the government from the Central Bank

4. Sale of government securities to the public by the Central Bank

Select the correct answer using the codes given below:

(a) 1 only

(b) 2 and 4 only

(c) 1 and 3

(d) 2, 3 and 4 

132.Which one of the following statements correctly describes the meaning of legal tender money ?

(a) The money which is tendered in courts of law of defray the fee of legal cases

(b) The money which a creditor is under compulsion to accept in settlement of his claims

(c) The bank money in the form of cheques, drafts, bills of exchange, etc.

(d) The metallic money in circulation in a country.

133. The money multiplier in an economy increases with which one of the following ? 

(a) Increase in the cash reserve ratio

(b) Increase in the banking habit of the population

(c) Increase in the statutory liquidity ratio

(d) Increase in the population of the country

Important MCQ Indian Economy

Nature Of Indian Economy
National income in India
Indian Economy Planning
Population of India
Natural Resources Of India 
Infrastructure Energy, Transportation, Communication
Indian economy Social Sector
Indian Economy MCQ Agriculture
Indian Economy GK Industry

Important MCQ Indian Economy

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