Chapter Wise Indian Economy MCQ’s With Explanation

Today’s Topic:Indian Financial System-1

These are most-important and most-expected Questions for IAS Prelims General Studies paper-1 (ECONOMY) of UPSC Civil Service exam.

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Today’s Topic:Indian Financial System-1

Q1. Which among the following given a justification about the fact ‘Green Revolution has not been green as it made out to be’

  1. It helped only farmers 2. It confined to selected areas only
  2. It confined only to wheat

Select the above correct statements.

a) Only 1      b) 1 and 2            c) 1, 2 and 3            d) 2 and 3

Ans:     D

Explanation:     The introduction of high-yielding varieties of seeds and the increased use of chemicals fertilizers and irrigation are known collectively as the green revolution, which provided the increase in production needed to make India self sufficient in India.

  • Use of high yielding varieties (HYV)
  • Irrigation
  • Use of insecticides and pesticides
  • Land reforms

Q2. Consider the following

  1. Trade and earn revenue
  2. Become the sole controller of food grain supply
  3. Prevent Black marketing

Which among the following are the primary objectives of the government to buy food grains directly from the farmers?

a) 1 and 2         b) Only 1        c) Only 3       d) 1, 2 and 3

Ans:     C

Explanation:     Black Market may emerge due to a shortage or limitation of products and due to convenience of merchandise available for cheap sale or resale. Also they are encouraged by buyers who have no regard for legality of supply and sale.

Q3. India has a high export earnings from diamonds. In this context, consider the following:

  1. Small Production of Industrial Diamonds 2. High Diamonds stock
  2. Availability of experts on cutting and polishing.

Which among the above is most appropriate reason being the above statements?

a) Only 3       b) Only 2       c) 1 and 3         d) 1, 2 and 3

Ans:     C

Explanation:     The central government move to curb the unscrupulous practices of round tripping of polished diamonds seems to have paid off.

For the first time in a decade India’s polished diamond export is expected to fail by around 37 percent to $ 17 billion in 2012-13.

Q4. 1853 is a landmark in India’s Transport because of:

  1. First cargo plane           2. First train           3. First sir plane            4. First cargo ship

Which of the above is correct answer?

a) Only 3          b) Only 1            c) Only 2             d) 1, 2, 3 and 4

Ans:     C

Explanation:     The history of rail transport in India began in the mid-nineteenth century. In 1845, along with sir Jamshedjee Jeejeebhog, Hon. Jaganath Shankerseth formed the Indian Railway association. As a director, shankerseth participated in the very first train journey in India between Mumbai and Thane on the 16th April, 1853 in a 14 carriage long train drawn by 3 locomotives named Sultan, Sindh and Sahib.

Q5. Consider the following factors:

  1. High investment in Industries
  2. Expanding market
  3. Dynamic entrepreneurship

Which of the above are required for accelerated growth of an economy?

a) 1 and 2         b) 2 and 3            c) 1, 2 and 3             d) None of these

Ans:     C

Explanation:     Invest in growth by hiring more workers, lowering taxes, providing incentives for entrepreneurs all of which the us is currently doing the opposite of. Today India is among the fastest growing country in the World. India’s share in world GDP has doubled in the last two decades. It became the third largest economy in the world on purchasing power parity basis this year.

Q6. Which among the following is the most important bulk import of India?

a) Non electrical Machinery      b) Electric goods

c) Food grains                          d) Petroleum

Ans:     D

Explanation:     Imports in India increased to 2281. 15 INR Billion April of 2013 from 2239. 55 INR Billion in March of 2013. Imports in India are reported by the Directorate General commerce. India cured import bill stands at $ 160 billion. This is expected to rise further as the rupee weakens domestic production declines but demand growth trots along at a healthy pace of 6% or so.

Q7. Which among the following is characterizes by highest fixed cost and lowest Running cost?

a) Pipeline Transport        b) Water ways transport

c) Air transport                 d) None of these

Ans:     A

Explanation:     Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes using compressed air can also transport solid capsules. As for gases and liquids, any chemically stable substance can be sent through a pipeline therefore sewage, slurry, water or even beer are those transporting crude petroleum and defined petroleum products fuels.

Q8. Consider the following works:

  1. Arrange facilities for transport of Agriculture produce
  2. Acquire building and go down at suitable places
  3. Subscribing to share capital of state warehousing corporations

Which among the above function a performed by central warehousing corporation?

a) 2 and 3            b) 1 and 2           c) Only 1         d) 1, 2 and 3

Ans:     D

Explanation:     A central warehouse corporation established in 1957 and region offices. CWC is operating 46 warehouse across the country with a storage capacity of 10. 8 million tones providing ware house service for a wide range products ranging from agriculture produced to sophisticated industrial products.

Q9. Which among the following is the cheapest mode of transport in terms of fixed plus running costs?

a) Waterways           b) Railways                 c) Pipeline             d) None of these

Ans:     A

Explanation:     A waterway is any navigable body of water. Waterways can include rivers, lakes, ocean and canals, in order a waterway to be navigable it most meet several criteria.

  • The waterway must be deep enough to allow the draft depth of the vessels with it.
  • The waterway must be wide enough to allow passage for the beam with of the vessels using it.
  • The current of waterway must be mild enough to allow vessels to make headway.

Q10. Consider the following

  1. Use of hybrid yielding varieties seeds.
  2. Uneconomical and fragmented
  3. Inefficient labour force.

Which among the above are the reasons for low productivity in Indian Agriculture?

a) Only 1          b) Only 2          c) 1 and 3         d) 2 and 3

Ans:     B

Explanation:     The causes for low productivity of Indian agriculture can be divided into 3 broad categories namely,

General factors as overcrowding in agriculture, discouraging rural Atmosphere, inadequate non firm service.

Institutional factors as – size of holding, pattern of land tenure.

Technological factors as poor technique of production, inadequate irrigational facilities.


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