GK Riyaz

Topics / Economy

Economy basics: 33 questions with answers

Economy questions in static GK are mostly about institutions and definitions: when a regulator was set up, what a deficit measures, which Article governs the budget. This set uses NCERT economics textbooks, the Constitution and the official pages of the RBI, SEBI, NABARD and the Ministry of Finance.

We deliberately leave out policy rates, inflation figures, growth numbers and budget amounts. Those change often, so they belong with current affairs, which this site does not cover.

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Options are listed alphabetically. Open "Show answer" to see the answer, our explanation and the source we checked it against.

  1. eco-001On which date was the Reserve Bank of India established?

    1. 1 April 1934
    2. 1 April 1935
    3. 1 January 1949
    4. 15 August 1947
    Show answer

    Answer: 1 April 1935

    RBI states that it was established on 1 April 1935 in accordance with the Reserve Bank of India Act, 1934.

    Source: Reserve Bank of India, About Us (About Us). Checked 26 October 2026.

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  2. eco-002Under which Act was the Reserve Bank of India set up?

    1. Banking Regulation Act, 1949
    2. Foreign Exchange Management Act, 1999
    3. Government of India Act, 1935
    4. Reserve Bank of India Act, 1934
    Show answer

    Answer: Reserve Bank of India Act, 1934

    RBI says it was set up in accordance with the provisions of the Reserve Bank of India Act, 1934, and began functioning on 1 April 1935.

    Source: Reserve Bank of India, About Us (About Us). Checked 26 October 2026.

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  3. eco-003Where was the Reserve Bank's Central Office initially established, before it moved to Mumbai in 1937?

    1. Chennai
    2. Kolkata
    3. New Delhi
    4. Shimla
    Show answer

    Answer: Kolkata

    RBI notes that its Central Office was first established in Kolkata and permanently moved to Mumbai in 1937.

    Source: Reserve Bank of India, About Us (About Us). Checked 26 October 2026.

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  4. eco-004In which year was the Reserve Bank of India nationalised, after which it has been fully owned by the Government of India?

    1. 1935
    2. 1949
    3. 1955
    4. 1969
    Show answer

    Answer: 1949

    RBI states that it has been fully owned by the Government of India since its nationalisation in 1949.

    Source: Reserve Bank of India, About Us (About Us). Checked 26 October 2026.

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  5. eco-005The RBI manages foreign exchange under which law?

    1. Banking Regulation Act, 1949
    2. Foreign Exchange Management Act, 1999
    3. Foreign Exchange Regulation Act, 1973
    4. Securities Contracts (Regulation) Act, 1956
    Show answer

    Answer: Foreign Exchange Management Act, 1999

    RBI lists managing foreign exchange under the Foreign Exchange Management Act, 1999 among its main functions.

    Source: Reserve Bank of India, About Us (About Us: main functions). Checked 26 October 2026.

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  6. eco-006The Securities and Exchange Board of India was first constituted as a non-statutory body on which date?

    1. 1 April 1935
    2. 12 April 1988
    3. 24 July 1991
    4. 30 January 1992
    Show answer

    Answer: 12 April 1988

    SEBI says it was constituted as a non-statutory body on 12 April 1988 through a Government of India resolution. It became statutory under the SEBI Act, 1992.

    Source: Securities and Exchange Board of India, About SEBI (About SEBI). Checked 26 October 2026.

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  7. eco-007On which date did the provisions of the Securities and Exchange Board of India Act, 1992 come into force?

    1. 1 April 1992
    2. 12 April 1988
    3. 15 August 1992
    4. 30 January 1992
    Show answer

    Answer: 30 January 1992

    SEBI records that the SEBI Act, 1992 (15 of 1992) came into force on 30 January 1992, making SEBI a statutory body.

    Source: Securities and Exchange Board of India, About SEBI (About SEBI). Checked 26 October 2026.

    Report an error in eco-007

  8. eco-008NABARD, India's apex development bank for agriculture and rural development, was established in which year?

    1. 1969
    2. 1975
    3. 1982
    4. 1990
    Show answer

    Answer: 1982

    NABARD describes itself as India's apex development bank, established in 1982 under an Act of Parliament to promote sustainable and equitable agriculture and rural development.

    Source: NABARD, Genesis (Genesis). Checked 26 October 2026.

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  9. eco-009Pradhan Mantri Jan Dhan Yojana is described by the Ministry of Finance as a national mission on what?

    1. Crop insurance only
    2. Financial inclusion
    3. Rural electrification
    4. Skill development
    Show answer

    Answer: Financial inclusion

    The PMJDY site calls it a National Mission on Financial Inclusion, aiming at universal access to banking with at least one basic bank account for every household.

    Source: Department of Financial Services, Ministry of Finance, Pradhan Mantri Jan Dhan Yojana: About (About PMJDY). Checked 26 October 2026.

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  10. eco-010Who is the Chairperson of the Goods and Services Tax Council under Article 279A?

    1. The Chairman of the Finance Commission
    2. The Governor of the RBI
    3. The Prime Minister
    4. The Union Finance Minister
    Show answer

    Answer: The Union Finance Minister

    Article 279A(2) makes the Union Finance Minister the Chairperson, with the Union Minister of State for Revenue or Finance and a minister nominated by each State as members.

    Source: Legislative Department, Ministry of Law and Justice, The Constitution of India (as on 1 May 2024), pocket diglot edition (Article 279A(2)). Checked 26 October 2026.

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  11. eco-011Article 279A, which created the GST Council, was inserted by which amendment?

    1. Eighty-eighth Amendment Act, 2003
    2. One Hundred and First Amendment Act, 2016
    3. One Hundred and Third Amendment Act, 2019
    4. Seventy-third Amendment Act, 1992
    Show answer

    Answer: One Hundred and First Amendment Act, 2016

    Article 279A asks the President to constitute the GST Council within sixty days of the commencement of the Constitution (One Hundred and First Amendment) Act, 2016.

    Source: Legislative Department, Ministry of Law and Justice, The Constitution of India (as on 1 May 2024), pocket diglot edition (Article 279A(1)). Checked 26 October 2026.

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  12. eco-012Under Article 280, the President constitutes a Finance Commission at the expiration of every how many years, or earlier if needed?

    1. Every fifth year
    2. Every fourth year
    3. Every tenth year
    4. Every third year
    Show answer

    Answer: Every fifth year

    Article 280(1) required the first Finance Commission within two years of commencement and thereafter at the expiration of every fifth year, or earlier if the President considers it necessary.

    Source: Legislative Department, Ministry of Law and Justice, The Constitution of India (as on 1 May 2024), pocket diglot edition (Article 280(1)). Checked 26 October 2026.

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  13. eco-013What does the Constitution call the statement of estimated receipts and expenditure laid before Parliament each financial year?

    1. The annual financial statement
    2. The Appropriation Act
    3. The Economic Survey
    4. The Vote on Account
    Show answer

    Answer: The annual financial statement

    Article 112 requires the President to lay this statement before both Houses for every financial year. NCERT notes it as the constitutional basis of the Union Budget.

    Source: Legislative Department, Ministry of Law and Justice, The Constitution of India (as on 1 May 2024), pocket diglot edition (Article 112(1)). Checked 26 October 2026.

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  14. eco-014Article 267 lets Parliament establish a Contingency Fund of India in the nature of what?

    1. A pension fund
    2. A sinking fund
    3. A sovereign wealth fund
    4. An imprest
    Show answer

    Answer: An imprest

    Article 267(1) describes the Contingency Fund of India as being in the nature of an imprest, from which advances can be made for unforeseen expenditure.

    Source: Legislative Department, Ministry of Law and Justice, The Constitution of India (as on 1 May 2024), pocket diglot edition (Article 267(1)). Checked 26 October 2026.

    Report an error in eco-014

  15. eco-015All revenues received by the Government of India form which fund, under Article 266?

    1. The Consolidated Fund of India
    2. The Contingency Fund of India
    3. The National Investment Fund
    4. The Public Account of India
    Show answer

    Answer: The Consolidated Fund of India

    Article 266(1) says all revenues received and loans raised by the Government of India form one consolidated fund called the Consolidated Fund of India, subject to the provisions it lists.

    Source: Legislative Department, Ministry of Law and Justice, The Constitution of India (as on 1 May 2024), pocket diglot edition (Article 266(1)). Checked 26 October 2026.

    Report an error in eco-015

  16. eco-016What does NCERT call the percentage of deposits that a bank must keep as cash reserves with the central bank?

    1. Bank rate
    2. Cash Reserve Ratio (CRR)
    3. Repo rate
    4. Statutory Liquidity Ratio (SLR)
    Show answer

    Answer: Cash Reserve Ratio (CRR)

    NCERT defines the Cash Reserve Ratio as the percentage of deposits a bank must keep as cash reserves. Banks also keep some reserves in liquid form under the Statutory Liquidity Ratio.

    Source: NCERT, Class XII, Introductory Macroeconomics: Money and Banking (PDF page 5). Checked 26 October 2026.

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  17. eco-017When the central bank lends money to banks under a repurchase agreement, what is the interest rate called?

    1. Bank rate
    2. Cash Reserve Ratio
    3. Repo rate
    4. Reverse repo rate
    Show answer

    Answer: Repo rate

    NCERT explains that a central bank can buy securities with an agreement to sell them back later; this is a repo, and the interest rate on the money lent this way is the repo rate.

    Source: NCERT, Class XII, Introductory Macroeconomics: Money and Banking (PDF page 8). Checked 26 October 2026.

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  18. eco-018Why is the central bank called the "lender of last resort"?

    1. It issues the last series of government bonds
    2. It lends only after all private banks refuse a citizen
    3. It lends only to the government
    4. It stands ready to lend to banks at all times
    Show answer

    Answer: It stands ready to lend to banks at all times

    NCERT says that standing ready to lend to banks at all times is an important function of the central bank, which is why it is called the lender of last resort.

    Source: NCERT, Class XII, Introductory Macroeconomics: Money and Banking (PDF page 7). Checked 26 October 2026.

    Report an error in eco-018

  19. eco-019Barter exchange presumes an improbable condition. What is it called?

    1. Double coincidence of wants
    2. Law of diminishing returns
    3. Liquidity trap
    4. Money multiplier
    Show answer

    Answer: Double coincidence of wants

    NCERT explains that exchanges without money, called barter, need each party to want what the other offers: a double coincidence of wants.

    Source: NCERT, Class XII, Introductory Macroeconomics: Money and Banking (PDF page 1). Checked 26 October 2026.

    Report an error in eco-019

  20. eco-020Currency notes and coins with no intrinsic value of their own are called what, in NCERT's terms?

    1. Broad money
    2. Commodity money
    3. Fiat money
    4. Near money
    Show answer

    Answer: Fiat money

    NCERT calls them fiat money. They are also legal tender, because no citizen can refuse them in settlement of a transaction.

    Source: NCERT, Class XII, Introductory Macroeconomics: Money and Banking (PDF page 13). Checked 26 October 2026.

    Report an error in eco-020

  21. eco-021Which of these is a quantitative tool the central bank uses to control money supply?

    1. Fixing the Finance Commission's term
    2. Moral persuasion of banks
    3. Open market operations
    4. Setting the GST rate
    Show answer

    Answer: Open market operations

    NCERT lists changes in the CRR, the bank rate and open market operations as quantitative tools. Persuading banks to discourage or encourage lending is a qualitative tool.

    Source: NCERT, Class XII, Introductory Macroeconomics: Money and Banking (PDF page 7). Checked 26 October 2026.

    Report an error in eco-021

  22. eco-022The excess of government revenue expenditure over revenue receipts is called what?

    1. Fiscal deficit
    2. Primary deficit
    3. Revenue deficit
    4. Trade deficit
    Show answer

    Answer: Revenue deficit

    NCERT defines revenue deficit as the excess of revenue expenditure over revenue receipts.

    Source: NCERT, Class XII, Introductory Macroeconomics: Government Budget and the Economy (PDF page 6). Checked 26 October 2026.

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  23. eco-023The difference between the government's total expenditure and its total receipts excluding borrowing is called what?

    1. Current account deficit
    2. Fiscal deficit
    3. Primary deficit
    4. Revenue deficit
    Show answer

    Answer: Fiscal deficit

    NCERT defines fiscal deficit this way. Subtracting net interest liabilities (interest paid minus interest received) from it gives the primary deficit.

    Source: NCERT, Class XII, Introductory Macroeconomics: Government Budget and the Economy (PDF page 7). Checked 26 October 2026.

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  24. eco-024Which 2003 law mandates three policy statements to be presented along with the Union Budget?

    1. Fiscal Responsibility and Budget Management Act
    2. Foreign Exchange Management Act
    3. Insolvency and Bankruptcy Code
    4. Public Debt Act
    Show answer

    Answer: Fiscal Responsibility and Budget Management Act

    NCERT notes that the Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) mandates statements such as the Medium-term Fiscal Policy Statement alongside the budget.

    Source: NCERT, Class XII, Introductory Macroeconomics: Government Budget and the Economy (PDF page 5). Checked 26 October 2026.

    Report an error in eco-024

  25. eco-025In which year was the Planning Commission set up, with the Prime Minister as its Chairperson?

    1. 1947
    2. 1950
    3. 1951
    4. 1956
    Show answer

    Answer: 1950

    NCERT records that the Planning Commission was set up in 1950 with the Prime Minister as Chairperson, beginning the era of five year plans.

    Source: NCERT, Class XI, Indian Economic Development: Indian Economy 1950-1990 (PDF page 4). Checked 26 October 2026.

    Report an error in eco-025

  26. eco-026Which statistician does NCERT call the architect of Indian planning?

    1. C. R. Rao
    2. M. Visvesvaraya
    3. Prasanta Chandra Mahalanobis
    4. V. K. R. V. Rao
    Show answer

    Answer: Prasanta Chandra Mahalanobis

    NCERT's box on Mahalanobis says planning in the real sense began with the Second Five Year Plan, which laid down the basic ideas of goals in Indian planning.

    Source: NCERT, Class XI, Indian Economic Development: Indian Economy 1950-1990 (PDF page 5). Checked 26 October 2026.

    Report an error in eco-026

  27. eco-027NCERT lists four goals of India's five year plans. Which set is correct?

    1. Growth, inflation control, disinvestment and self-reliance
    2. Growth, modernisation, self-reliance and equity
    3. Growth, privatisation, globalisation and equity
    4. Industrialisation, urbanisation, exports and equity
    Show answer

    Answer: Growth, modernisation, self-reliance and equity

    NCERT gives the goals as growth, modernisation, self-reliance and equity, adding that not every plan gave equal weight to all four.

    Source: NCERT, Class XI, Indian Economic Development: Indian Economy 1950-1990 (PDF page 4). Checked 26 October 2026.

    Report an error in eco-027

  28. eco-028Fixing the maximum size of land that an individual can own is known as what?

    1. Land acquisition
    2. Land ceiling
    3. Land consolidation
    4. Land revenue
    Show answer

    Answer: Land ceiling

    NCERT describes land ceiling as a policy to promote equity in agriculture by fixing the maximum size of land an individual could own.

    Source: NCERT, Class XI, Indian Economic Development: Indian Economy 1950-1990 (PDF page 8). Checked 26 October 2026.

    Report an error in eco-028

  29. eco-029The Green Revolution in India was ushered in mainly through the use of which seeds?

    1. Genetically modified Bt seeds
    2. High Yielding Variety (HYV) seeds
    3. Hybrid seeds of jute only
    4. Organic heirloom seeds
    Show answer

    Answer: High Yielding Variety (HYV) seeds

    NCERT says policy makers addressed low productivity through land reforms and High Yielding Variety (HYV) seeds, which ushered in a revolution in Indian agriculture.

    Source: NCERT, Class XI, Indian Economic Development: Indian Economy 1950-1990 (PDF page 7). Checked 26 October 2026.

    Report an error in eco-029

  30. eco-030A crisis in which area led to the introduction of economic reforms in 1991?

    1. Food grain production
    2. Railway finances
    3. The balance of payments
    4. The stock market
    Show answer

    Answer: The balance of payments

    NCERT explains that in 1991 a balance of payments crisis, with foreign exchange reserves too low to pay for essential imports, led to the New Economic Policy.

    Source: NCERT, Class XI, Indian Economic Development: Liberalisation, Privatisation and Globalisation (PDF pages 2 and 4). Checked 26 October 2026.

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  31. eco-031The World Trade Organisation, founded in 1995, succeeded which arrangement?

    1. Bretton Woods Agreement
    2. General Agreement on Tariffs and Trade (GATT)
    3. International Trade Organisation Charter
    4. North American Free Trade Agreement
    Show answer

    Answer: General Agreement on Tariffs and Trade (GATT)

    NCERT says the WTO was founded in 1995 as the successor to GATT, which was established in 1948 with 23 countries.

    Source: NCERT, Class XI, Indian Economic Development: Liberalisation, Privatisation and Globalisation (PDF page 11). Checked 26 October 2026.

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  32. eco-032Selling off part of the equity of public sector enterprises to the public is known as what?

    1. Deregulation
    2. Disinvestment
    3. Nationalisation
    4. Securitisation
    Show answer

    Answer: Disinvestment

    NCERT defines disinvestment as privatisation of public sector enterprises by selling part of their equity to the public.

    Source: NCERT, Class XI, Indian Economic Development: Liberalisation, Privatisation and Globalisation (PDF page 9). Checked 26 October 2026.

    Report an error in eco-032

  33. eco-033What labels does the government give to selected public sector enterprises to grant them greater financial and managerial autonomy?

    1. Category A, B and C undertakings
    2. Gold, silver and bronze PSUs
    3. Maharatnas, navratnas and miniratnas
    4. Sunrise, sunset and strategic units
    Show answer

    Answer: Maharatnas, navratnas and miniratnas

    NCERT notes that the government identifies PSEs and declares them maharatnas, navratnas and miniratnas, giving them more autonomy to compete in a liberalised economy.

    Source: NCERT, Class XI, Indian Economic Development: Liberalisation, Privatisation and Globalisation (PDF page 9). Checked 26 October 2026.

    Report an error in eco-033

Sources used on this page

Each source was opened and read on 26 October 2026.