UPSC Indian Economic Service (IES) MCQs
Prepare effectively for the UPSC Indian Economic Service (IES) exam with a focused collection of multiple-choice questions (MCQs). These MCQs cover essential topics like Economics, General Studies, and Statistics, designed to match the actual exam pattern. Practicing these questions will help aspirants strengthen their understanding of economic concepts, improve problem-solving skills, and manage time efficiently during the exam. Whether you're revising key topics or testing your knowledge, these IES MCQs are a valuable resource to guide you toward success in the UPSC Indian Economic Service exam and a rewarding career in economic policy-making.
Q1. What does the law of demand state?
A. Demand increases as price increases
B. Demand decreases as price increases
C. Demand remains constant
D. Demand fluctuates randomly
📘 View Explanation
Q2. Which index is used to measure inflation?
A. Consumer Price Index (CPI)
B. Industrial Production Index
C. Unemployment Rate
D. Balance of Payments
📘 View Explanation
Q3. The fiscal deficit indicates:
A. Excess of government revenue over expenditure
B. Excess of government expenditure over revenue
C. Balance between revenue and expenditure
D. None of the above
📘 View Explanation
Q4. In the IS-LM model, what does the LM curve represent?
A. Goods market equilibrium
B. Money market equilibrium
C. Labour market equilibrium
D. Price level equilibrium
📘 View Explanation
Q5. Marginal propensity to consume (MPC) is:
A. Change in consumption/change in income
B. Change in income/change in consumption
C. Total consumption/total income
D. None of the above
📘 View Explanation
Q6. Which of the following is NOT a direct tax?
A. Income tax
B. Wealth tax
C. Customs duty
D. Corporate tax
📘 View Explanation
Q7. Inflation caused by increase in aggregate demand is called:
A. Cost-push inflation
B. Demand-pull inflation
C. Monetary inflation
D. Supply-side inflation
📘 View Explanation
Q8. The elasticity of demand measures:
A. Responsiveness of demand to price change
B. Change in income levels
C. Change in supply
D. Change in production
📘 View Explanation
Q9. Which measure is used to assess the inequality in income distribution?
A. Gini Coefficient
B. CPI
C. HDI
D. Balance of Payments
📘 View Explanation
Q10. The term “Open Market Operations” refers to:
A. Government spending
B. Central bank buying/selling government securities
C. Taxation policies
D. Import/export regulations
📘 View Explanation
Q11. Fiscal policy involves:
A. Changing government spending and taxation
B. Controlling money supply
C. Regulating bank interest rates
D. Fixing exchange rates
📘 View Explanation
Q12. Which indicator reflects economic growth?
A. Gross Domestic Product (GDP)
B. Consumer Price Index
C. Unemployment rate
D. Fiscal deficit
📘 View Explanation
Q13. The Phillips curve shows the relationship between:
A. Inflation and unemployment
B. GDP and inflation
C. Fiscal deficit and growth
D. Exchange rates and inflation
📘 View Explanation
Q14. What does the term “Balance of Payments” signify?
A. Record of all economic transactions between residents and the rest of the world
B. Government revenue
C. Imports only
D. Exports only
📘 View Explanation
Q15. Which is a characteristic of a perfectly competitive market?
A. Single seller
B. Many buyers and sellers
C. Barriers to entry
D. Price setting by sellers
📘 View Explanation
Q16. The concept of “Opportunity Cost” means:
A. Cost of lost alternatives
B. Explicit financial cost
C. Cost of raw materials
D. Fixed costs
📘 View Explanation
Q17. Which sector is classified as the tertiary sector?
A. Agriculture
B. Manufacturing
C. Services
D. Mining
📘 View Explanation
Q18. “Monopolistic Competition” is characterized by:
A. One seller
B. Few large sellers
C. Many sellers with differentiated products
D. Government control
📘 View Explanation
Q19. The term “Crowding Out Effect” refers to:
A. Increase in private investment due to government borrowing
B. Decrease in private investment due to government borrowing
C. Decrease in government expenditure
D. Increase in taxes
📘 View Explanation
Q20. Which institution regulates monetary policy in India?
A. RBI
B. SEBI
C. Finance Ministry
D. NITI Aayog
📘 View Explanation