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Foreign Trade Policy Before 1991 Reforms Class 12 Economics MCQs
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Introduction:
Enhance your CBSE Class 12 Economics preparation with this online MCQ practice test on “Foreign Trade Policy Before 1991 Reforms.” This topic from Part B: Indian Economic Development focuses on India’s trade strategies, policies, and restrictions before the liberalisation period.
These MCQs are designed strictly as per the latest NCERT Class 12 Economics syllabus, ensuring complete alignment with the CBSE board exam pattern. The quiz covers key areas such as the import substitution policy, export promotion challenges, trade restrictions, balance of payments issues, and the impact of protectionist policies on India’s economic growth.
With automatic scoring and instant feedback, this interactive quiz allows students to test their understanding, strengthen conceptual clarity, and prepare effectively for board exams. Ideal for self-study, classroom practice, or quick revision, it offers a focused, exam-oriented learning experience.
Master India’s trade strategies before the 1991 reforms with this NCERT-based online MCQ test on Foreign Trade Policy Before 1991 Reforms and boost your performance in CBSE Class 12 Economics.
Sample MCQs with Explanations:
1. India’s foreign trade policy before 1991 was primarily based on:
A) Export promotion
B) Import substitution
C) Free trade
D) Globalization
✅ Answer: B) Import substitution
💡 Explanation: India focused on reducing dependence on imports by encouraging domestic production under a protectionist policy.
2. The main aim of the import substitution policy was to:
A) Increase exports
B) Encourage FDI
C) Promote domestic industries
D) Increase foreign reserves
✅ Answer: C) Promote domestic industries
💡 Explanation: Import substitution aimed to boost local industries by replacing imported goods with domestic alternatives.
3. Which of the following characterized India’s trade policy before 1991?
A) Open economy
B) Free market approach
C) Highly regulated trade
D) Export-driven policy
✅ Answer: C) Highly regulated trade
💡 Explanation: India’s pre-reform trade policy included quotas, tariffs, and licensing restrictions to control imports.
4. Which of the following was a major limitation of India’s trade policy before 1991?
A) High competition
B) Balance of payments surplus
C) Low export competitiveness
D) Global integration
✅ Answer: C) Low export competitiveness
💡 Explanation: Overprotection limited innovation, making Indian exports less competitive in global markets.
5. India’s foreign trade deficit before 1991 was mainly due to:
A) Decline in imports
B) Surge in exports
C) Higher import bills
D) Stable foreign reserves
✅ Answer: C) Higher import bills
💡 Explanation: High dependence on imported capital goods and oil led to a persistent trade deficit.
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