20 Economy GK Questions with Answers

1. Why are only final goods counted in GDP
   1. They are easier to count
   2. To avoid double counting
   3. They are more expensive
   4. Only their data is available to the government
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   Answer: (B) To avoid double counting

   If intermediate goods were added too, the same production would be counted several times and GDP would look inflated.

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2. Which Indian economist helped Mahbub ul Haq in building the HDI
   1. Amartya Sen
   2. V K R V Rao
   3. P C Mahalanobis
   4. Manmohan Singh
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   Answer: (A) Amartya Sen

   Amartya Sen helped develop the index, which was made in 1989 and published in 1990.

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3. Which statements about PMKVY are correct — 1. It is an outcome-based skill training scheme 2. Its fourth round has run since 2022-23
   1. 1 only
   2. 2 only
   3. both
   4. neither
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   Answer: (C) both

   PMKVY is built around outcomes such as certification and placement, and its fourth round, PMKVY 4.0, with new-age trades, has run since 2022-23.

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4. Which was not one of the sub-indices in the World Bank's Ease of Doing Business Index — (IAS, 2019)
   1. Maintaining law and order
   2. Paying taxes
   3. Registering property
   4. Dealing with construction permits
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   Answer: (A) Maintaining law and order

   The 10 sub-indices covered starting a business through to resolving insolvency; law and order was never one of them.

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5. If GNP at market price is 200, depreciation 20, indirect tax 30 and subsidy 10, what is the national income
   1. 140
   2. 160
   3. 180
   4. 200
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   Answer: (B) 160

   200 − 20 = 180 (NNP at market price), then 180 − 30 + 10 = 160 (NNP at factor cost), which is national income.

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6. By NFHS-5 (2019-21), what has India's Total Fertility Rate (TFR) fallen to?
   1. 2.1 — at replacement level
   2. 2.0 — below replacement level
   3. 2.5 — still high
   4. 1.5 — very low
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   Answer: (B) 2.0 — below replacement level

   This has already fallen below even the Twelfth Plan's target of 2.1 — meaning the average woman now has fewer children than the replacement level.

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7. What is the total size of the Budget of 2026-27?
   1. ₹43.47 lakh crore
   2. ₹53.47 lakh crore
   3. ₹63.47 lakh crore
   4. ₹35.4 lakh crore
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   Answer: (B) ₹53.47 lakh crore

   ₹35.4 lakh crore is only the revenue receipts, not the whole Budget — the full size is ₹53.47 lakh crore.

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8. How many Sustainable Development Goals are there and what is their deadline
   1. 8 goals, by 2015
   2. 17 goals, by 2030
   3. 17 goals, by 2025
   4. 169 goals, by 2030
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   Answer: (B) 17 goals, by 2030

   The 2030 Agenda has 17 goals and 169 targets; 8 goals with a 2015 deadline belonged to the Millennium Development Goals.

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9. What reward is given for issuing a municipal bond worth more than ₹1,000 crore, under the municipal bond incentive?
   1. ₹10 crore
   2. ₹50 crore
   3. ₹100 crore
   4. ₹500 crore
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   Answer: (C) ₹100 crore

   Issuing a bond worth more than ₹1,000 crore earns a reward of ₹100 crore.

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10. What share of the world’s data centres does India hold, against its share of data generated
    1. 3% of data centres, 20% of data
    2. 20% of data centres, 3% of data
    3. 10% of both
    4. 50% of data centres, 20% of data
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    Answer: (A) 3% of data centres, 20% of data

    India generates close to 20% of the world’s data, but holds only 3% of its data centres — about 150 out of roughly 11,000.

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11. What percentage of Foreign Direct Investment (FDI) is allowed in Indian companies publishing newspapers and periodicals dealing with news and current affairs — (IAS, 2005)
    1. 26%
    2. 49%
    3. 74%
    4. 100%
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    Answer: (A) 26%

    FDI in publications dealing with news and current affairs is capped at 26%.

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12. By Malthus's theory, in what progression does food production grow, and in what progression does population grow?
    1. Both in arithmetic progression
    2. Both in geometric progression
    3. Food in arithmetic, population in geometric
    4. Food in geometric, population in arithmetic
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    Answer: (C) Food in arithmetic, population in geometric

    This exact gap was the root of Malthus's worry — food grows slowly, population grows fast.

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13. In which plan was the Minimum Needs Programme introduced
    1. The Third
    2. The Fifth
    3. The Seventh
    4. The Ninth
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    Answer: (B) The Fifth

    The Minimum Needs Programme was introduced in the Fifth Plan along with Garibi Hatao.

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14. In which year was the National Income Committee formed and who chaired it
    1. 1949, Professor P C Mahalanobis
    2. 1954, Professor V K R V Rao
    3. 1950, Dadabhai Naoroji
    4. 1951, C Rangarajan
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    Answer: (A) 1949, Professor P C Mahalanobis

    The committee was formed in 1949 and its report came in 1954, putting India's national income for 1948-49 at 8,710 crore rupees.

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15. Name the three economic railway corridors announced under the PM Gati Shakti framework in the interim budget of 2024-25. (RAS Mains, 2023, 2 marks)
    1. Energy, mineral and cement corridors; port connectivity corridors; high traffic density corridors
    2. The four corridors of the Golden Quadrilateral
    3. Industrial corridor, digital corridor, green corridor
    4. North-South, East-West and coastal corridors
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    Answer: (A) Energy, mineral and cement corridors; port connectivity corridors; high traffic density corridors

    These three corridors were announced under PM Gati Shakti to ease congestion on freight routes and cut logistics costs.

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16. What does India's current stage of demographic transition point to?
    1. High growth potential with slow actual growth
    2. High potential and high actual growth, both
    3. A half-industrialised economy
    4. Steadily rising urbanisation
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    Answer: (D) Steadily rising urbanisation

    India is in the third stage, where the birth rate is falling, the death rate is already low, and urbanisation keeps rising steadily.

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17. Which of these taxes are ad valorem, that is, based on value — 1. Sales tax 2. VAT 3. Property tax
    1. Only 1 and 2
    2. Only 2 and 3
    3. Only 1 and 3
    4. All three
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    Answer: (D) All three

    None of the three cares about weight or quantity — each one is worked out from what the good or the property is worth, which makes all three ad valorem.

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18. Which state has the highest share of rural population in the country?
    1. Bihar
    2. Himachal Pradesh
    3. Kerala
    4. Uttar Pradesh
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    Answer: (B) Himachal Pradesh

    Close to 90% of Himachal Pradesh's population is rural, the highest share in the country.

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19. Who coined the term "Hindu rate of growth"
    1. JN Bhagwati
    2. KN Raj
    3. Raj Krishna
    4. Sukhamoy Chakravarty
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    Answer: (C) Raj Krishna

    Professor Raj Krishna gave the term for India's stagnant growth rate up to the 1970s.

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20. What is the correct meaning of fiscal space
    1. The government’s total budget size
    2. The room to spend without putting financial stability at risk
    3. The rate of tax collection
    4. The size of the foreign exchange reserves
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    Answer: (B) The room to spend without putting financial stability at risk

    It shows how much more the government can spend without upsetting its own financial stability.

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