ECCONOMY ONLYIAS - Sheet7 Flashcards
1,Increase in absolute and per capita real GNP does not connote a higher level of economic development, if: ,(a) Industrial output fails to keep pace with agricultural output. (b) Agricultural output fails to keep pace with industrial output. (c) Poverty and unemployment increase. (d) Imports grow faster than exports.,2018
1,c,”Option (c) is correct: It is possible that an increase in absolute and per capita Gross National Product (GNP) will only reflect the economic growth of a small portion of society, leaving the rest of the population in poverty and unemployment. This is because the concept of per capita real income or per capita GDP are not able to capture the true picture in terms of non-monetary social indicators. Thus, an increase in absolute and per capita real GNP does not connote a higher level of economic development, if poverty and unemployment increase. Additional Information: Economic Growth and Economic Development: Economic Growth: A rise in real national income or national output is known as Economic Growth. Economic Development: It includes raising living standards and the quality of life, as seen in indicators like literacy rates, life expectancy, and access to healthcare. Economic Development occurs when a country undergoes different economic developments that enhance quality of life, such as a decline in poverty and unemployment, a narrowing of wealth and income disparities, a rise in literacy rates, and improvements in health and sanitation. An essential aspect of development is to enable the maximum number of people to experience the fruits of development. This component of progress cannot be captured by ideas of per capita income (per capita GDP or per capita NSDP). Non-financial social indicators with multiple dimensions are better indicators of a society’s overall economic progress.”
2,In the context of Indian economy, consider the following statements: 1. The growth rate of GDP has steadily increased in the last five years. 2. The growth rate in per capita income has steadily increased in the last five years. Which of the statements given above is/are correct? ,(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2,2011
2,d,”Option (d) is correct: The growth rate of GDP and Per capita income has not steadily increased. Explanation Indian Economy 183 Gross Domestic Product (GDP) is the standard measure of the value-added created through the production of goods and services in a country during a certain period. It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. The growth rate of GDP in India is as follows: 2016- 8.26% 2017- 7.04% 2018- 6.12% 2019- 4.18% 2020- -10.29% With respect to 2016-2020, we can clearly see that it has not been rising for five years. Hence, statement 1 is not correct. Per Capita Income: The average income per person in a particular location during a given year is measured by per capita income or total income. The amount is determined by dividing the area’s overall income by its whole population. Growth Rate in Per Capita Income in India is as follows: 2016-2017: 7.1% 2017-2018: 6.8% 2018-2019: 6.1% 2019-2020: 4.2%. NOTE: This question came in 2011 so data and facts of that period is not important. However, we can try to attempt and analyse the same question in light of recent data i.e., from 2016-2020”
3,With reference to the Indian economy after the 1991 economic liberalisation, consider the following statements: 1. Worker productivity (Rs. per worker at 2004 -05 prices) increased in urban areas while it decreased in rural areas. 2. The % age share of rural areas in the workforce steadily increased. 3. In rural areas, the growth in the non-farm economy increased. 4. The growth rate in rural employment decreased. Which of the statements given above is/are correct? ,(a) 1 and 2 only (b) 3 and 4 only (c) 3 only (d) 1, 2 and 4 only,2020
3,b,”Option (b) is correct: “Changing Structure of Rural Economy of India: Implications for Employment and Growth 2017,” is a report published by NITI Aayog, which made the following observations: Statement 1 is incorrect: Both rural and urban regions have seen an improvement in worker productivity as well as the absolute level of income per worker. For rural areas, it was Rs. 37273 in 2004 -05 and Rs. 101755 in 2011-12, while for urban areas it was Rs. 120419 in 2004-05 and Rs. 282515 in 2011-12. Statement 2 is incorrect: As per the 2011 Census, 68.8% of India’s population and 72.4% of the workforce resided in rural areas. However, the steady transition to urbanisation over the years has led to a decline in the rural share of the workforce, from 77.8% in 1993-94 to 70.9% in 2011-12. Statement 3 is correct: About two-thirds of rural income is now generated in non-agricultural activities. Non-farm economy has increased in rural areas. The share of agriculture in the rural economy has decreased from 57% in 1993-94 to 39% in 2011-12. Statement 4 is correct: After 2004-05, the rural areas have witnessed negative growth in employment in spite of high growth in output. The growth rate of rural employment was 1.45% during 1994-2005, which fell to -0.28% between 2005-12. ECONOMIC REFORMS Meaning and Need of Economic Reforms New Economic Policy (N.E.P.) Stabilisation Measures Structural Reform Measures Meaning: Set of policies, rules and regulations to achieve economic growth. 1. Correcting Adverse Balance of Payment 2. Tackling with inflation 1. Improve Efficiency 2. Removing Trade Restrictions Need: 1. Poor performance of public sector 2. Adverse balance of payment 3. Fall in foreign exchange reserves 4. Huge debts on government 5. Inflationary pressure 6. Terms and conditions of World Bank and IMF (International Monetary Fund)”
4,With reference to India’s Five -Year Plans, which of the following statements is/are correct? 1. From the Second Five -Year Plan, there was a determined thrust towards substitution of basic and capital good industries. 2. The Fourth Five -Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power. 3. In the Fifth Five -Year Plan, for the first time, the financial sector was included as an integral part of the Plan. Select the correct answer using the code given below. ,(a) 1 and 2 only (b) 2 only (c) 3 only (d) 1, 2 and 3,2019
4,a,”Option (a) is correct: From the Second Five Year Plan (1956-61), there was determined thrust towards substitution of basic and capital goods industries. This plan focused on Rapid Industrialization with an emphasis on capital goods and heavy industries. It was based on the PC Mahalanobis Model. Statement 2 is correct: The Fourth Plan (1969-74) provided a necessary corrective to the earlier trend which helped particularly the stronger sections in agriculture as well as in industry to enable them rapidly to enlarge and diversify the production base. It has adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power. Thus, it targeted Growth with Stability and progressive achievement of self-reliance. Statement 3 is incorrect: The Fifth plan (1974-78) aimed at removal of poverty and attaining self-reliance. The financial sector became an integral part of the plan in the Ninth five -year plan (1997-2002).”
5,Which of the following has/have occurred in India after its liberalisation of economic policies in 1991? 1. Share of agriculture in GDP increased enormously. 2. Share of India’s exports in world trade increased. 3. FDI inflows increased. 4. India’s foreign exchange reserves increased enormously. Select the correct answer using the codes given below: ,(a) 1 and 4 only (b) 2, 3 and 4 only (c) 2 and 3 only (d) 1, 2, 3 and 4,2017
5,b,”Option (b) is correct: India’s agriculture sector has shown a gradual decline in contribution to the Indian economy post-reform. India’s traditional occupation, agriculture, currently makes up only 15% of the GDP, down from 29% in 1991. Statement 2 is correct: India is seen as a successful exporter of IT software, auto parts, textiles, and engineering goods in the reform period. Thus, the share of India’s exports in world trade increased after its liberalisation of economic policies in 1991. Statement 3 is correct: The Foreign investments including FDI and FII have increased from about US $ 100 million in 1990-91 to US $ 467 billion in 2012-13. Statement 4 is correct: The opening up of the economy has led to rapid increase in foreign direct investment and foreign exchange reserves. NOTE: This question came verbatim from Economics NCERT Class 11 Pg. 48. This highlights the importance of reading and understanding the concepts from NCERTs.”
6,The main objective of the 12th Five-Year Plan is: ,(a) Inclusive growth and poverty reduction. (b) Inclusive and sustainable growth. (c) Sustainable and inclusive growth to reduce unemployment. (d) Faster, sustainable and more inclusive growth.,2014
6,d,”Option (d) is correct: The Twelfth Five Year Plan (2012-2017) was launched with the objective of faster, sustainable, and more inclusive growth. It was the last five-year plan. Its growth rate target was 8%. Later, the government dissolved the Planning Commission with the NITI Aayog. Twelfth Five-Year Plan objectives: To remove gender and social gaps in school enrolment. To enhance access to higher education. To reduce malnutrition among children aged 0–3 years. To provide electricity to all villages. Create 50 million new job opportunities in non-agricultural sectors.”
7,Which of the following can be said to be essentially the parts of ‘Inclusive Governance’? 1. Permitting the Non-Banking Financial Companies to do banking. 2. Establishing effective District Planning Committees in all the districts. 3. Increasing government spending on public health. 4. Strengthening the Mid-day Meal Scheme. Select the correct answer using the codes given below: ,(a) 1 and 2 only (b) 3 and 4 only (c) 2, 3 and 4 only (d) 1, 2, 3 and 4,2012
7,c,”Option (c) is correct: Statement 1 is incorrect: Permitting the NBFCs to do banking cannot be a part of Inclusive Governance. The prime motive of Banks is to earn profits; for an inclusive governance concept to be successful, the government has to focus more on support being provided to all citizens irrespective of their economic and social status, rather than allowing entities to churn out profits out of them. Statement 2 is correct: According to Article 243ZD of the Indian Constitution, the District Planning Committee (DPC) must have been established at the district level to oversee planning at the district and below. The committee in charge of each district shall compile the district’s Panchayat and Municipality development plans and create a draft development plan for the district. Statement 3 is correct: The Government aims to increase public health expenditure to 2.5% of GDP by 2025. The 15th Finance Commission, the Union Health Minister Dr. Harsh Vardhan, highlighted that the government aims at gradually increasing the public health expenditure to 2.5% of the nation’s GDP by the year 2025. Statement 4 is correct: The Mid-Day Meal Program or MDMP is a program of, “Nutrition Support to Primary Education” and is considered as a means of mitigating the classroom hunger to all children below the age of 14 years who are enrolled in schools. It was aimed at improving enrolment, attendance, and retention, while simultaneously improving the nutritional status of students in primary classes.”
8,Which of the following factors/policies were affecting the price of rice in India in the recent past? 1. Minimum Support Price 2. Government’s trading 3. Government’s stockpiling 4. Consumer subsidies,2020
8,d,”Option (d) is correct: Factors/Policies Affecting the Price of Rice in recent past are: Minimum Support Price: MSP is a type of market intervention that the government uses to protect farmers against a sudden drop in farm prices. Rice is included in MSP and thus impacts the price of rice. Government’s Trading: The Government’s Trading and Minimum Support Price of rice results in the diversion of stocks from the open market hence driving up the price for the ultimate consumers. Though factors like climatic shocks determine rice production and prices in the short run, the future scenario of rice prices must be based on long-term projections of rice demand and supply. Government’s Stockpiling: Low stock levels constrain the ability to buffer the price rise resulting from other factors. Consumer Subsidies: Subsidies given to consumers lower the prices for the ultimate consumer. These subsidies are generally provided by the government.”
9,With reference to chemical fertilisers in India, consider the following statements: 1. At present, the retail price of chemical fertilisers is market-driven and not administered by the Government. 2. Ammonia, which is an input of urea, is produced from natural gas. 3. Sulphur, which is a raw material for phosphoric acid fertilizer, is a by-product of oil refineries. Which of the statements given above is/are correct? ,(a) 1 only (b) 2 and 3 only (c) 2 only (d) 1, 2 and 3,2020
9,b,”Option (b) is correct: Statement 1 is incorrect: The Union Government subsidizes fertilizers to ensure that fertilizers are easily available to farmers at reasonable prices and the country remains self-sufficient in agriculture. Thus, the fertilizer price in India is administered by the government. Statement 2 is correct: Ammonia’s chemical formula is NH3. It is a colourless gas and is used as an industrial chemical in the production of fertilizers, plastics, synthetic fibers, dyes and other products. It occurs naturally in the environment from the breakdown of organic waste matter and may also find its way to ground and surface water sources through industrial effluents, contamination by sewage or through agricultural runoff. In the Haber–Bosch process, the atmospheric nitrogen (N2) is converted to ammonia (NH3) by reacting it with hydrogen (H2), (this Hydrogen is provided by breaking methane (CH4) from natural gas) while maintaining the high temperatures and pressures. Statement 3 is correct: In India, the domestic production of elemental sulphur is limited to by-product recoveries from petroleum refineries and fuel oil used as feedstock for manufacturing fertilizer.”
10,In India, which of the following can be considered as public investment in agriculture? 1. Fixing Minimum Support Price for agricultural produce of all crops. 2. Computerization of Primary Agricultural Credit Societies. 3. Social Capital development. 4. Free electricity supply to farmers. 5. Waiver of agricultural loans by the banking system 6. Setting up cold storage facilities by the governments. Select the correct answer using the code given below. ,(a) 1, 2 and 5 only (b) 1, 3, 4 and 5 only (c) 2, 3 and 6 only (d) 1, 2, 3, 4, 5 and 6,2020
10,c,”Option (c) is correct: Public Investment: It is an investment by the State (Central, state and local governments or through publicly owned companies) to build the nation’s capital stock by devoting resources to the basic physical infrastructure (such as roads, bridges, rail lines, airports, and water distribution), research and development, etc. that leads to increased output and/or living standards. The following can be considered as Public Investment in Agriculture. Computerization of Primary Agricultural Credit Societies: Computerization of Primary Agricultural Credit Societies will enhance productivity in the agricultural sector, as there will be easy and timely access of credit. Social Capital Development: Building social capital for smallholders can also positively impact the adoption of new technologies such as the use of improved seeds, soil and water conservation practices, and agroforestry. Setting up cold storage facilities by the governments: Setting up cold storage facilities will enhance productivity in the agricultural sector as agricultural products are generally perishable in nature and the facility of cold storage may help in increasing the shelf life of the products. Additional Information: Fixing Minimum Support Price for Agriculture for agricultural products of all crops and free electricity supply to farmers are subsidies, hence they are not categorized as public investment in agriculture. Subsidies and incentives are not considered as public investment.”
11,Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes? 1. Working capital for maintenance of farm assets 2. Purchase of combine harvesters, tractors and mini trucks. 3. Consumption requirements of farm households 4. Post-harvest expense 5. Construction of a family house and setting up a village cold storage facility. Select the correct answer using the code given below: ,(a) 1, 2 and 5 only (b) 1, 3 and 4 only (c) 2, 3, 4 and 5 only (d) 1, 2, 3 4 and 5,2020
11,b,”Option (b) is correct: Announced in the 1998–1999 budget, the Kisan Credit Card Scheme aims to provide farmers with the institutional credit they need to meet their financial needs at various phases of farming. It is implemented by all public sector banks, regional rural banks, and cooperative banks across the nation. Under the Kisan Credit Card scheme, short-term credit support is given to farmers for the following purposes: Working Capital for Maintenance of Farm Assets: To provide Working capital for maintenance of farm assets and activities allied to agriculture. Consumption Requirement of Farm Households: To fulfill the consumption requirements of farmers is one of the main objectives of KCS. Post Harvest Expenses: Supporting the farmer in their post-harvest expenses. Additional Information: The Kisan Credit Cards are issued to the farmers so that they may use them to purchase agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs. Construction of a family house is covered under PMAY and setting up a village cold storage facility is not covered under KCC either. NOTE: Statement 2 talks about “Purchase of combine harvesters, tractors and mini trucks” which is not a short term investment. It needs heavy capital and is not possible with short-term credit support provided under KCC. By this reasoning and general understanding if we eliminate statement 2, we will get correct answer i.e., ‘Option (b) 1, 3 and 4 only’”
12,Consider the following statements: 1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. 2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise. Which of the statements given above is/are correct? ,(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2,2020
12,d,”Option (d) is correct: Statement 1 is incorrect: Procurement of all cereals, pulses and oilseeds at Minimum support price is open-ended. It is limited since our buffer stock is limited. Open-ended procurement means whatever foodgrains are offered by the farmers, within the stipulated procurement period and which conforms to the quality specifications prescribed by Government of India, are purchased at MSP (and bonus/incentive, if any) by the Government agencies including FCI for central Pool. Statement 2 is incorrect: Market price has no link with minimum support price and it can go below or above the MSP, depending upon the demand of the crop in the market.”
13,The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus: ,(a) Transportation cost only. (b) Interest cost only (c) Procurement incidentals and distribution cost. (d) Procurement incidentals and charges for godowns.,2019
13,c,”Option (c) is correct: Food Corporation of India (FCI): Food Corporation of India (FCI) is a Public Sector Undertaking that falls under the Ministry of Consumer Affairs’ Department of Food and Public Distribution. In 1965, the Food Corporations Act of 1964 created the FCI, a statutory body. It was founded in the midst of a severe grain crisis, particularly in wheat. In order to suggest remunerative pricing to farmers, the Commission on Agricultural Costs and Prices (CACP) was established in 1965. The Economic Cost of food grains to the FCI is the Minimum Support Price and bonus (if any) paid to the farmers plus the procurement incidentals and distribution cost. Procurement incidentals are expenses incurred during procurement till the food grains reach the first point of godown. Distribution costs are now included in economic costs, whilst buffer carrying costs are now included in buffer subsidies.”
14,Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years? ,(a) Spices (b) Fresh fruits (c) Pulses (d) Vegetable oils,2019
14,d,”Option (d) is correct: Import of Agricultural commodities: Vegetable oils account for the highest import in terms of value in the last five years. India relies on imports for 70% of its edible oil consumption. Pulses account for second-most highest while fresh fruits account for third highest and spices account for least imports in terms of value in the last five years among the above-mentioned agricultural commodities imported in India.”
15,With reference to land reforms in independent India, which one of the following statements is correct? ,(a) The ceiling laws were aimed at family holdings and not individual holdings. (b) The major aim of land reforms was providing agricultural land to all the landless. (c) It resulted in cultivation of cash crops as a predominant form of cultivation. (d) Land reforms permitted no exemptions to the ceiling limits,2019
15,b,”Option (b) is correct: Land Reforms in Independent India: The Land Reforms in India aimed at the redistribution of ownership holdings and reorganizing operational holdings from the viewpoint of optimum utilization of land. It was a major aim of land reforms to provide agricultural land to all the landless. The Objectives of the Land Reforms are as follows: Removing institutional discrepancies of the agrarian structure. Providing agricultural land to all the landless. Issues of socio-economic inequality. In order to address the interconnected issues of poverty, hunger, and food insecurity, agricultural productivity must be increased. Additional Information: Land Ceiling laws were applied to family holdings as well as individual holdings depending upon the region/state. The outcome of Land reforms: (i) abolition of intermediaries, (ii) fixation of ceilings on land holdings, and (iii) redistribution of surplus land among landless or semi-landless peasants. Cultivation of cash crops requires much more other inputs rather than the mere availability of holdings. Commercialization of agriculture, and not land reforms, led to an increase in the cultivation of cash crops. Certain exemptions to the ceiling limits were allowed for plantations of crops like tea and coffee.”
16,Among the following, which one is the largest exporter of rice in the world in the last five years?,(a) China (b) India (c) Myanmar (d) Vietnam,2019
16,b,”Option (b) is correct: In recent years (2014-18), Vietnam’s rice exports were between 13 and 16 percent, Thailand’s between 22 and 25 percent, and India’s between 25 and 26 percent. Since the beginning of this decade, India has been the leading exporter of rice worldwide (2011-12).”
17,Consider the following statements: 1. The quantity of imported edible oils is more than the domestic production of edible oils in the last five years. 2. The Government does not impose any customs duty on all the imported edible oils as a special case. Which of the statements given above is/are correct?,(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2,2018
17,a,”Option (a) is correct: Statement 1 is correct: India occupies a prominent position in the world oilseeds industry with contribution of around 10% in worldwide production. But the demand of edible oils (extracted from oilseeds in addition to palm oil) is significantly higher than the domestic production, leading to dependence on imports (60% of requirement). Statement 2 is incorrect: Government imposes customs duty on edible oils to safeguard the interests of the domestic oil crushing industry. The duty on two major edible oils, namely crude sunflower seed oil and crude canola/rapeseed/mustard is 25% while crude soybean oil attracts 30% duty.”
18,Consider the following: 1. Areca nut 2. Barley 3. Coffee 4. Finger millet 5. Groundnut 6. Sesamum 7. Turmeric The Cabinet Committee on Economic Affairs has announced the Minimum Support Price for which of the above?,(a) 1, 2, 3 and 7 only (b) 2, 4, 5 and 6 only (c) 1, 3, 4, 5 and 6 only (d) 1, 2, 3, 4, 5, 6 and 7,2018
18,b,”Option (b) is correct: The Commission on Agricultural Costs and Prices’ (CACP) recommendations serve as the foundation for the MSP. Being a statutory agency, the CACP provides separate reports outlining its suggested pricing for the Kharif and Rabi seasons. Initially, As of now, CACP recommends MSPs of 23 commodities, which comprise 7 cereals (paddy, wheat, maize, sorghum, pearl millet, barley and ragi), 5 pulses (gram, tur, moong, urad, lentil), 7 oilseeds (groundnut, rapeseed-mustard, soyabean, seasmum, sunflower, safflower, nigerseed), and 4 commercial crops (copra, sugarcane, cotton and raw jute).
19,What is/are the advantage/advantages of implementing the ‘National Agriculture Market’ scheme?,1. It is a pan-India electronic trading portal for agricultural commodities. 2. It provides the farmers access to nationwide markets, with prices commensurate with the quality of their produce. Select the correct answer using the code given below: ,(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2,2017
19,c,”Option (c) is correct: Statement 1 is correct: National Agriculture Market (NAM) is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities. Statement 2 is correct: NAM promises more options for sale. It would increase farmers’ access to nationwide markets (with prices commensurate with the quality of their produce) through warehouse based sales and thus obviate the need to transport his produce to the mandi. National Agriculture Market (NAM): A national market for agricultural commodities is created by connecting the current APMC mandis through the pan-Indian electronic trading portal known as the National Agriculture Market (NAM). Advantages of e-NAM: For the Farmers: NAM promises more options for sale. It would increase farmers’ access to nationwide markets (with prices commensurate with the quality of their produce) through warehouse based sales and thus obviate the need to transport his produce to the mandi. For the Local Trader: NAM provides access to a bigger national market for secondary trading in the mandi/market. By participating directly in trading at the local mandi/market level through the NAM platform, bulk buyers, processors, exporters, etc. benefit from lower intermediation costs. All of the major mandis in the States will gradually be incorporated into NAM, ensuring uniform processes for issuing licences, collecting fees, and moving products. The NAM will also aid in the development of value chains for the nation’s most important agricultural commodities and support the movement and storage of agricultural products in a scientific manner.”
20,Which of the following is/are the advantage/ advantages of practicing drip irrigation?,1. Reduction in weed 2. Reduction in soil salinity 3. Reduction in-soil erosion Select the correct answer using the code given below. ,(a) 1 and 2 only (b) 3 only (c) 1 and 3 only (d) None of the above is an advantage of practising drip irrigation,2016
20,c,”Option (c) is correct: Drip Irrigation: It is a form of irrigation where water is applied near the plant root through emitters or drippers, on or below the soil surface, at a low rate varying from 2-20 litres per hour. Frequent watering helps to maintain the optimum level of soil moisture. The most effective irrigation technique is drip irrigation, which may be used for a wide range of crops, including vegetables, orchard crops, flowers, and plantation crops. Advantages of Drip Irrigation: Maximum use of available water. No water being available to weeds. Maximum crop yield. High efficiency in the use of fertilizers. Weed growth is reduced and restricts the population of potential hosts. Low labour and relatively low operation cost. No soil erosion. Improved infiltration in soil of low intake. Ready adjustment to sophisticated automatic control. No runoff of fertilizers into groundwater. Less water is lost to evaporation than during surface irrigation. Improves seed germination. Decreased tillage operations. Disadvantages of Drip Irrigation: Sensitivity to clogging. Moisture distribution problem. Salinity hazards. High cost compared to furrow. For design, installation, and operation, high competence is needed.”
21,The Fair and Remunerative Price (FRP) of sugarcane is approved by the: ,(a) Cabinet Committee on Economic Affairs. (b) Commission for Agricultural Costs and Prices. (c) Directorate of Marketing and Inspection, Ministry of Agriculture. (d) Agricultural Produce Market Committee.,2015
21,a,”Option (a) is correct: Fair and Remunerative Prices (FRP): The Sugarcane Control Order, 1966, published under the Essential Commodities Act (ECA), 1955, specifies that FRP must be paid nationwide within 14 days of the cane’s delivery date. The Cabinet Committee on Economic Affairs (CCEA) announced the decision following the Commission on Agricultural Costs and Prices’ (CACP) recommendation. The report by the Rangarajan Committee on restructuring the sugarcane sector serves as the foundation for the FRP.”
22,In India, markets in agricultural products are regulated under the ,(a) Essential Commodities Act, 1955 (b) Agricultural Produce Market Committee Act enacted by States (c) Agricultural Produce (Grading and Marking) Act, 1937 (d) Food Products Order, 1956 and Meat and Food Products Order, 1973,2015
22,b,”Option (b) is correct: Agricultural Produce Market Committee (APMC): Agricultural Produce Market Committee (APMC) under the State Government regulates the notified agricultural produce and livestock. The State Government’s Agricultural Produce Market Committee (APMC) oversees the listed agricultural products and livestock. According to Schedule 7 of the Indian Constitution, agriculture is a state subject. The entire state’s area has been divided up and designated as a market area (Yard Mandis), and market management is carried out by Market Committees established by the state governments. No person or organisation is permitted to engage in wholesale marketing operations after a certain area is designated as a market area and comes under the control of a Market Committee. In order to transact, buyers must also get unique licences from each APMC. It is a component of government policy aimed at ensuring food security, paying remunerative prices to the farmers, and providing fair prices to consumers.”
23,Consider the following statements: 1. The Accelerated Irrigation Benefits Programme was launched during 1996-97 to provide loan assistance to poor farmers. 2. The Command Area Development Programme was launched in 1974-75 for the development of water-use efficiency. Which of the statements given above is/are correct? ,(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2,2015
23,b,”Option (b) is correct: Statement 1 is incorrect: Accelerated Irrigation Benefits Programme was launched in 1996-97 to give loan assistance to the states to help them to develop their major irrigation projects which are in an advanced stage of completion. Its objective was to expedite completion of ongoing irrigation projects. Statement 2 is correct: The command area development programme was launched in 1974-75 to bridge the gap between irrigation potential and actual utilized major and medium irrigation schemes. Delivery of irrigation water to the fields is the ultimate objective of this scheme. The plan includes the creation of field channels, land contouring, and rotational water supply to ensure equitable distribution. It was restructured into the Command Area Development and Water Management Program 2004.”
24,The substitution of steel for wooden ploughs in agricultural production is an example of ,(a) Labour-augmenting technological progress (b) Capital-augmenting technological progress (c) Capital-reducing technological progress (d) None of the above,2015
24,b,”Option (b) is correct: Labour Augmenting is technology that increases skills and productivity of the existing labour force (example - teaching people how to use the computer). Capital Augmenting technology enhances the productivity of existing capital goods. In this case, replacement of wood by steel, increases the productivity of plough.”
25,Which one of the following best describes the main objective of ‘Seed Village Concept’? ,(a) Encouraging the farmers to use their own farm seeds and discouraging them to buy the seeds from others (b) Involving the farmers for training in quality seed production and thereby to make available quality seeds to others at appropriate time and affordable cost (c) Earmarking some villages exclusively for the production of certified seeds (d) Identifying the entrepreneurs in villages and providing them technology and finance to set up seed companies,2015
25,b,”Option (b) is correct: Seed village Concept: A village is referred to as a “seed village” if a trained group of farmers produces seeds for a variety of crops and provides for the requirements of themselves, their fellow villagers, and villagers in nearby villages at an affordable price. Major focus areas are: Clustering or concentrating seed production in a small area; Introducing new, high-yielding types to replace the current local ones; Increasing the seed production to meet the local demand, timely supply and reasonable cost; Self-sufficiency and self-reliance of the village; Increasing the seed replacement rate; This allows seed to be available at the door steps of farms at an appropriate time and at an affordable cost. It also facilitates fast spread of new cultivars of different kinds.”
26,The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of ,(a) Crude oil (b) Bullion (c) Rare earth elements (d) Uranium,2020
26,a,”Option (a) is correct: Crude Oil Trade: There are about 160 crude oils that are traded internationally, varying in terms of their characteristics & quality. The two main benchmarks for crude oil used internationally are West Texas Intermediate (WTI) and Brent Crude. WTI is the benchmark for oil extracted from America and is traded on the New York Mercantile Exchange, while Brent Crude is the benchmark for crude oil obtained from the North Sea near Norway, Sweden, and the UK, and is traded on the International Exchange in London. Two-thirds of the world’s crude contracts are signed for Brent oil Benchmark.”
27,With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct? 1. Quantitative restrictions on imports by foreign investors are prohibited. 2. They apply to investment measures related to trade in both goods and services. 3. They are not concerned with the regulation of foreign investment. Select the correct answer using the code given below: ,(a) 1 and 2 only (b) 2 only (c) 1 and 3 only (d) 1, 2 and 3,2020
27,c,”Option (c) is correct: Statement 1 and Statement 3 are correct: Statement 1 is correct: Trade-Related Investment Measure (TRIMs) provides quantitative restrictions on imports by foreign investors. TRIMs agreement stipulates that certain measures adopted by Governments to regulate FDI can cause trade-restrictive and distorting effects. Statement 2 is incorrect: As per Article 1 of the TRIMs agreement, it applies only to investment measures related to trade in goods and not in services. Statement 3 is correct: TRIMs are not intended to deal with the regulation of investment as such and does not impact directly on WTO members’ ability to regulate and place conditions upon the entry and establishment of foreign investment.”
28,Consider the following statements: 1. Coal sector was nationalised by the Government of India under Indira Gandhi. 2. Now, coal blocks are allocated on lottery basis. 3. Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal products. Which of the statements given above is/are correct? ,(a) 1 only (b) 2 and 3 only (c) 3 only (d) 1, 2 and 3,2019
28,a,”Option (a) is correct: Statement 1 is correct: The nationalization was done in two phases, the first with the coking coal mines in 1971-72 and then with the non -coking coal mines in 1973. Indira Gandhi served as the Prime Minister of the country from 1971-1973. Statement 2 is incorrect: After the Supreme Court cancelled the coal block allocations in 2014. To manage and reallocate the cancelled blocks in a transparent and accountable manner, the Coal Mines (Special Provisions) Act, 2015 enabled the provisions for ‘allocation of coal mines by way of auction and allotment for the sale of coal’. Statement 3 is incorrect: India has the 5th largest coal reserves in the world, but due to the monopolies of some firms, it cannot produce enough coal to meet the shortages. It imports coal to meet the shortages. Domestic coal has been able to meet only 75% of our annual coal demand. About 200 mt of imports are used to make up for the shortage of local coal supply.”
29,Which one of the following is the purpose of ‘UDAY’, a scheme of the Government? ,(a) Providing technical and financial assistance to startup entrepreneurs in the field of renewable sources of energy (b) Providing electricity to every household in the countries by 2018 (c) Replacing the coal-based power plants with natural gas, nuclear, solar, wind and tidal power plants over a period of time (d) Providing for financial turnaround and revival of power distribution companies,2016
29,d,”Option (d) is correct: UDAY Scheme: It is the Government of India’s financial recovery and revival package for India’s electricity distribution firms (DISCOMs), which aims to permanently fix the financial crisis of the power distribution industry. Objectives include improving operational efficiencies of discoms, reducing the cost of power, reducing interest costs of discoms, and enforcing financial discipline on discoms through alignment with state finances.”
30,What is/are the purpose/purposes of ‘District Mineral Foundations’ in India? 1. Promoting mineral exploration activities in mineral-rich districts 2. Protecting the interests of the persons affected by mining operations 3. Authorizing State Governments to issue licenses for mineral exploration Select the correct answer using the code given below. ,(a) 1 and 2 only (b) 2 only (c) 1 and 3 only (d) 1, 2 and 3,2016
30,b,”Option (b) is correct: Statement 2 is correct: The main objective of DMFs is to work for the interest of the benefit of the persons and areas affected mining related operations in such manner as may be prescribed by the State Government. Statement 1 is incorrect: DMFs don’t work in promotion of mineral exploration activities in mineral-rich districts, rather it works for the benefit of the persons and areas affected by mining-related operations. Statement 3 is incorrect: It does not authorize states to issue a license for mineral exploration.”
31,What is/are the recent policy initiative(s) of Government of India to promote the growth of the manufacturing sector? 1. Setting up of National Investment and Manufacturing Zones. 2. Providing the benefit of ‘single window clearance’. 3. Establishing the Technology Acquisition and Development Fund. Select the correct answer using codes given below: ,(a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3,2012
31,d,”Option (d) is correct: All statements are correct: The National Manufacturing Policy provides for the promotion of clusters and aggregation, especially through the creation of National Investment and Manufacturing Zones (NIMZs). It also includes the initiation of the process of simplification and rationalization of state-level business regulations and developing single-window clearance. Additionally, the policy includes advisory to States on simplification & rationalization of business regulations, skill Development, and constitution of the approval/monitoring mechanism under the policy. A scheme prepared under NMP on Technology Acquisition and Development Fund (TADF) is also mentioned.”
32,In India, in the overall index of Industrial Production, the Indices of Eight Core Industries have a combined weight of 37.90%. Which of the following are among those Eight Core industries? 1. Cement 2. Fertilizer 3. Natural Gas 4. Refinery products 5. Textiles Select the correct answer using the codes given below: ,(a) 1 and 5 only (b) 2, 3 and 4 only (c) 1, 2, 3 and 4 only (d) 1, 2, 3, 4 and 5,2012
32,c,”Option (c) is correct: Eight Core Industries: The Eight Core Industries measure the combined and individual performance of production in selected eight core industries viz. Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. They comprise 40.27% (2021) of the weight of items included in the Index of Industrial Production (IIP) and have a significant impact on general economic activities.”
33,Despite having large reserves of coal, why does India import millions of tons of coal? 1. It is the policy of India to save its own coal reserves for the future, and import it from other countries for the present use. 2. Most of the power plants in India are coal-based and they are not able to get sufficient supplies of coal from within the country. 3. Steel companies need a large quantity of coking coal which has to be imported. Which of the statements given above is/are correct? ,(a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3,2012
33,b,”Option (b) is correct: Statement 2 and Statement 3 are correct: Statement 2 is correct: Coal-based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers, and coal traders are importing non-coking coal. Statement 3 is correct: The production of steel requires 0.8 tonnes of coking coal to produce one tonne of Steel. About 85% of the coking coal requirement of the domestic steel industry is presently being met through imports.”
34,Which one of the following is likely to be the most inflationary in its effects? ,(a) Repayment of public debt (b) Borrowing from the public to finance a budget deficit (c) Borrowing from the banks to finance a budget deficit (d) Creation of new money to finance a budget deficit,2021
34,d,”Option (d) is correct: Inflation: Inflation is the rise in prices of goods and services within a particular economy wherein, the purchasing power of consumers decreases, and the value of the cash holdings erodes. Some causes that lead to inflation include the creation of new money to finance a budget deficit, increase in demand, reduction in supply, demand-supply gap, excess circulation of money, increase in input costs, devaluation of currency, and rise in wages among others.”
35,Which of the following steps is most likely to be taken at the time of an economic recession? ,(a) Cut in tax rates accompanied by an increase in interest rate (b) Increase in expenditure on public projects (c) Increase in tax rates accompanied by reduction of interest rate (d) Reduction of expenditure on public projects,2021
35,b,”Option (b) is correct: Recession: A fall in the gross domestic product (GDP) for two or more consecutive quarters is often regarded as an economic recession. Recessions are brought on by high-interest rates because they reduce liquidity, or the quantity of money available for investment. An increase in expenditure on public projects will lead to an increase in investments, leading to an increase in GDP and income in the economy and in turn increase in demand, completing the virtuous cycle of investment.”
36,With reference to the Indian economy, demand-pull inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. Inflation-indexing wages 4. Higher purchasing power 5. Rising interest rates Select the correct answer using the code given below. ,(a) 1, 2 and 4 only (b) 3, 4 and 5 only (c) 1, 2, 3 and 5 only (d) 1, 2, 3, 4 and 5,2021
36,a,”Option (a) is correct: Points 1, 2, and 4 are correct: Expansionary Policies and Fiscal Stimulus both lead to an increase in demand in the economy, fueling demand-pull inflation. Higher Purchasing Power also increases consumer demand, contributing to demand-pull inflation. However, Point 3 is incorrect because inflation-indexing wages do not directly lead to an increase in purchasing power, so it cannot cause demand-pull inflation.”
37,Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI does not capture changes in the prices of services, which CPI does. 3. The Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates. Which of the statements given above is/are correct? ,(a) 1 and 2 only (b) 2 only (c) 3 only (d) 1, 2 and 3,2020
37,a,”Option (a) is correct: All statements are correct: Statement 1 correctly describes the Wholesale Price Index (WPI) and its focus on wholesale price changes. Statement 2 highlights the difference between WPI and Consumer Price Index (CPI), emphasizing that WPI does not reflect the impact of inflation on people. Statement 3 is incorrect because the Reserve Bank of India did not adopt CPI as the key measure of inflation in 2014, rather it adopted CPI as the key measure earlier.”
38,With reference to inflation in India, which of the following statements is correct? ,(a) Controlling the inflation in India is the responsibility of the Government of India only (b) The Reserve Bank of India has no role in controlling the inflation (c) Decreased money circulation helps in controlling the inflation (d) Increased money circulation helps in controlling the inflation,2015
38,c,”Option (c) is correct: All statements are correct: The explanation provides an overview of inflation, its control by the Reserve Bank of India through monetary policies, and measures to combat inflation. It also highlights the causes of inflation and various policy measures, including monetary, fiscal, and other measures, to control inflation.”
39,Consider the following statements: 1. Inflation benefits the debtors. 2. Inflation benefits the bond-holders. Which of the statements given above is/are correct? ,(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2,2013
39,a,”Option (a) is correct: Statement 1 is correct: Inflation does indeed redistribute wealth from creditors to debtors. Statement 2 is incorrect because it does not specifically mention inflation-indexed bonds, so it cannot be determined if inflation benefits bondholders.”
40,Which one of the following is likely to be the most inflationary in its effect? ,(a) Repayment of public debt (b) Borrowing from the public to finance a budget deficit (c) Borrowings from banks to finance a budget deficit (d) Creating new money to finance a budget deficit,2013
40,d,”Option (d) is correct: Borrowing from banks to finance a budget deficit and Borrowing from the public to finance a budget deficit will lead to a decrease in the money supply in the market, thereby reducing inflationary pressures. Creating new money to finance a budget deficit will have a more inflationary effect than Repayment of public debt, as it increases the total money supply in the market.”
41,India has experienced persistent and high food inflation in the recent past. What could be the reasons? 1. Due to a gradual switchover to the cultivation of commercial crops, the area Under cultivation of food grains has steadily decreased in the last five years by about 30%. 2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change. 3. The food supply chain has structural constraints. Which of the statements given above are correct? ,(a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3,2011
41,b,”Option (b) is correct: The explanation provides an overview of inflation, its measurement, and causes. It also introduces the Cobweb Phenomenon, explaining how large-scale fluctuations in prices of pulses occur in the Indian market due to cyclical patterns of overproduction and underproduction by farmers based on previous price levels.”
42,Consider the following statements: Other things remaining unchanged, market demand for a good might increase if 1. price of its substitute increases 2. price of its complement increases 3. the good is an inferior good and the income of the consumer increases 4. its price falls Which of the above statements are correct? ,(a) 1 and 4 only (b) 2, 3 and 4 (c) 1, 3 and 4 (d) 1, 2 and 3,2021
42,a,”Option (a) is correct: Statements 1 and 4 are correct: Statement 1 correctly describes substitute goods and their relationship with price changes. Statement 4 accurately reflects the Law of Demand. However, Statements 2 and 3 are incorrect because they describe complementary goods and inferior goods, respectively.”
43,“Gold Tranche” (Reserve Tranche) refers to: ,(a) A loan system of the World Bank (b) One of the operations of a Central Bank (c) A credit system granted by WTO to its members (d) A credit system granted by IMF to its members,2020
43,d,”Option (d) is correct: The explanation provides a clear description of a Reserve Tranche, which is a portion of the required quota of currency each member country must provide to the IMF that can be utilized for its own purposes without service fees or economic reform conditions.”
44,With reference to the Indian economy, consider the following statements: 1. ‘Commercial Paper’ is a short-term unsecured promissory note. 2. ‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation. 3. ‘Call Money’ is a short term finance used for interbank transactions. 4. ‘Zero-Coupon Bonds are the interest-bearing short term bonds issued by the Scheduled Commercial Banks to corporations. Which of the statements given above is/are correct? ,(a) 1 and 2 only (b) 4 only (c) 1 and 3 only (d) 2, 3 and 4 only,2020
44,c,”Option (c) is correct: Statements 1 and 3 are correct: Statement 1 accurately describes Commercial Paper, while Statement 3 correctly defines Call Money. However, Statements 2 and 4 are incorrect because they provide inaccurate descriptions of Certificate of Deposit and Zero Coupon Bond, respectively.”
45,With reference to ‘Bitcoins’, sometimes seen in the news, which of the following statements is/are correct? 1. Bitcoins are tracked by the Central Banks of the countries. 2. Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address. 3. Online payments can be sent without either side knowing the identity of the other. Select the correct answer using the code given below. ,(a) 1 and 2 only (b) 2 and 3 only (c) 3 only (d) 1, 2 and 3,2016
45,b,”Option (b) is correct: Statements 2 and 3 are correct: Both statements accurately describe Bitcoin, a digital currency known for its anonymity in transactions and its popularity among various groups, including libertarians, tech enthusiasts, speculators, and criminals. However, Statement 1 is incorrect because Bitcoin transactions are not completely anonymous.”
46,”What is/are the purpose/purposes of the Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’? (2016)”,”1. To bring the idle gold lying with Indian households into the economy.,2. To promote FDI in the gold and jewellery sector,3. To reduce India’s dependence on gold imports. Select the correct answer using the code given below. (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3”,2016
46,c,”Option (c) is correct: Statements 1 and 3 accurately describe the primary objectives of the Gold Monetization Scheme and Sovereign Gold Bond Scheme, which aim to reduce India’s gold imports and mobilize idle gold held by individuals and households. However, Statement 2 is incorrect because all Scheduled Commercial Banks, excluding RRBs, are eligible to implement the schemes, and they are not intended to promote FDI in the gold and jewellery sector.”
47,”What does venture capital mean ? (2014)”,”(a) A short-term capital provided to industries, (b) A long-term start-up capital provided to new entrepreneurs, (c) Funds provided to industries at times of incurring losses., (d) Funds provided for replacement and renovation of industries”,2014
47,b,”Option (b) is correct: The explanation provides a comprehensive overview of venture capital, describing it as a form of private equity financing provided to startup companies and small businesses with long-term growth potential. Venture capital is typically provided by wealthy individuals, investment banks, and other financial organizations, and it is often accompanied by managerial or technological support.”
48,”A rise in the general level of prices may be caused by: (2013)”,”1. An increase in the money supply, 2. A decrease in the aggregate level of output, 3. An increase in the effective demand. Select the correct answer using the codes given below: (a) 1 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2 and 3”,2013
48,d,”Option (d) is correct: All three statements correctly identify factors that can contribute to inflation. An increase in the money supply (Statement 1), a decrease in output (Statement 2), and an increase in demand (Statement 3) can all lead to inflationary pressures within an economy. The explanation provides a detailed description of inflation and its causes.”
49,”Which of the following measures would result in an increase in the money supply in the economy? (2012)”,”1. Purchase of government securities from the public by the Central Bank.,2. Deposit of currency in commercial banks by the public.,3. Borrowing by the government from the Central Bank.,4. Sale of government securities to the public by the Central Bank. Select the correct answer using the codes given below: (a) 1 only (b) 2 and 4 only (c) 1 and 3 (d) 2, 3 and 4”,2012
49,c,”Option (c) is correct: Statements 1 and 3 accurately describe how certain actions by the Central Bank, such as buying government securities and borrowing by the government, can influence the money supply in the market. However, Statements 2 and 4 are incorrect because depositing currency in commercial banks by the public and selling government securities to the public by the Central Bank do not directly impact the money supply in the market.”
50,”Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? (2011)”,”1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.,2. The Government no longer intends to retain the management control of the CPSEs. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2”,2011
50,d,”Option (d) is correct: Statement 3 is the only correct statement. Disinvestment refers to the process of selling government-owned assets, such as Central Public Sector Enterprises (CPSEs), to private investors. The revenue earned from disinvestment may be used for various purposes, but it is not necessarily earmarked specifically for paying back external debt (Statement 1) or retaining management control of CPSEs (Statement 2). The explanation provides additional context on CPSEs and disinvestment.”
51,”With what purpose is the Government of India promoting the concept of “Mega Food Parks”? (2011)”,”1. To provide good infrastructure facilities for the food processing industry.,2. To increase the processing of perishable items and reduce wastage.,3. To provide emerging and eco-friendly food processing technologies to entrepreneurs. Select the correct answer using the codes given below: (a) 1 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2 and 3”,2011
51,d,”Option (d) is correct: The Mega Food Park Scheme, introduced in 2008-09, aimed to boost the food processing industry by increasing value and reducing food waste. It focused on connecting agricultural production to the market, maximizing value addition, reducing wastage, boosting farmers’ incomes, and creating jobs. The scheme involved building state-of-the-art infrastructure facilities for food processing from farm to market, including cold chains, collection centers, primary processing centers, and central processing centers. Financial assistance of up to Rs. 50 Crore per Mega Food Park project was provided by the central government, and the scheme was implemented by a Special Purpose Vehicle (SPV) registered under the Companies Act, 2013. Presently, 22 Mega Food Parks are operational, aligning with the ‘Make in India’ and ‘Atma Nirbhar Bharat’ vision of the Government of India.”
52,”With reference to the Indian economy, consider the following statements: (2022)”,”1. If the inflation is too high, the Reserve Bank of India (RBI) is likely to buy government securities.,2. If the rupee is rapidly depreciating, RBI is likely to sell dollars in the market.,3. If interest rates in the USA or European Union were to fall, that is likely to induce RBI to buy dollars. Which of the statements given above are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3”,2022
52,b,”Option (b) is correct: Statement 2 and 3 accurately describe qualitative tools used by the Reserve Bank of India (RBI) to control inflation. RBI intervenes in the currency market to support the rupee and may buy or sell dollars to influence the value of the domestic currency. Additionally, changes in domestic interest rates relative to other countries can affect currency flows, prompting RBI to buy or sell dollars accordingly. However, Statement 1 is incorrect because RBI sells government securities to reduce the money supply, not to control inflation.”
53,”Consider the following statements: (2022)”,”1. In India, credit rating agencies are regulated by the Reserve Bank of India.,2. The rating agency popularly known as ICRA is a public limited company.,3. Brickwork Ratings is an Indian credit rating agency. Which of the statements given above are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3”,2022
53,b,”Option (b) is correct: Statements 2 and 3 provide accurate information about credit rating agencies in India. ICRA (Investment Information and Credit Rating Agency of India Ltd.) was established in 1991 to rate debt instruments, and there are six credit rating agencies registered under the Securities and Exchange Board of India (SEBI). However, Statement 1 is incorrect because credit rating agencies in India are regulated by SEBI, not the RBI.”
54,”With reference to the Banks Board Bureau (BBB)’, which of the following statements are correct? (2022)”,”1. The Governor of RBI is the Chairman of BBB.,2. BBB recommends for the selection of heads for Public Sector Banks.,3. BBB helps the Public Sector Banks in developing strategies and capital raising plans. Select the correct answer using the code given below. (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3”,2022
54,b,”Option (b) is correct: Statement 2 and 3 accurately describe the role and functions of the Banks Board Bureau (BBB) in India. BBB recommends appointments for key positions in Public Sector Banks (PSBs) and develops strategies to improve their performance and raise capital. However, Statement 1 is incorrect because the Chairman of BBB is selected by the central government, not the RBI governor.”
55,”In India, which one of the following is responsible for maintaining price stability by controlling inflation? (2022)”,”(a) Department of Consumer Affairs, (b) Expenditure Management Commission, (c) Financial Stability and Development Council, (d) Reserve Bank of India”,2022
55,d,”Option (d) is correct: The explanation provides an overview of monetary policy in India and highlights the role of the Reserve Bank of India (RBI) in maintaining price stability and controlling inflation. It outlines various monetary policy instruments and objectives, emphasizing RBI’s responsibility for regulating the money supply in the economy.”
56,”Consider the following statements: (2021)”,”1. The Governor of the Reserve bank of India (RBI) is appointed by the Central Government., 2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest., 3. The Governor of the RBI draws his power from the RBI Act. Which of the above statements are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3”,2021
56,c,”Option (c) is correct: The explanation provides details about the appointment, functions, and powers of the Reserve Bank of India (RBI). It highlights the appointment process of the Governor of RBI, including the role of the Financial Sector Regulatory Appointments Search Committee (FSRASC) and the term of office. Additionally, it outlines the various functions of RBI, such as monetary authority, regulator and supervisor of the financial system, manager of foreign exchanges, issuer of currency, developmental role, financial inclusion, use of technology, banker to banks, banker to government, minimum reserve system, subsidiaries of RBI, and income and expenditure of RBI.”
57,”With reference to ‘Urban Cooperative banks’ in India consider the following statements: (2021)”,”1. They are supervised and regulated by local boards set up by the State Governments., 2. They can issue equity shares and preference shares., 3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966. Which of the statements given above is/are correct? (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3”,2021
57,b,”Option (b) is correct: Statements 2 and 3 accurately describe the guidelines and regulations related to cooperative banks in India. RBI has issued guidelines allowing cooperative banks to raise funds through equity shares, preference shares, and debt instruments. Additionally, large cooperative banks with paid-up share capital and reserves of Rs. 1 lakh were brought under the purview of the Banking Regulation Act 1949. However, Statement 1 is incorrect because after the Banking Regulation (Amendment) Act 2020, all powers related to cooperative banks were transferred to RBI from the Registrars of cooperative societies.”
58,”In India, the central bank’s function as the ‘lender of last resort’ usually refers to which of the following? (2021)”,”1. Lending to trade and industry bodies when they fail to borrow from other sources., 2. Providing liquidity to the banks having a temporary crisis., 3. Lending to governments to finance budgetary deficits. Select the correct answer using the code given below. (a) 1 and 2 (b) 2 only (c) 2 and 3 (d) 3 only”,2021
58,b,”Option (b) is correct: The explanation provides an accurate understanding of the concept of the ‘lender of last resort’ role performed by the Reserve Bank of India (RBI). It explains how RBI provides liquidity to banks facing temporary financial difficulties, helping them meet their short-term obligations and maintain financial stability. Additionally, it highlights the importance of this function in ensuring the smooth functioning of the banking system during times of stress.”
59,”If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India? (2020)”,”1. Not depending on short-term foreign borrowings., 2. Opening up to more foreign banks., 3. Maintaining full capital account convertibility. Select the correct answer using the code given below: (a) 1 only (b) 1 and 2 only (c) 3 only (d) 1, 2 and 3”,2020
59,a,”Option (a) is correct: The explanation discusses mechanisms to counter financial crises and evaluates the statements provided. It agrees with Statement 1, stating that short-term borrowings are not advisable during a global economic crisis. However, it disagrees with Statements 2 and 3, arguing that opening up to more foreign banks and implementing capital account convertibility could increase risks during a financial crisis.”
60,”If you withdraw Rs. 1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be: (2020)”,”(a) To reduce it by Rs. 1,00,000, (b) To increase it by Rs. 1,00,000, (c) To increase it by more than Rs. 1,00,000, (d) To leave it unchanged”,2020
60,d,”Option (d) is correct: The explanation clarifies the impact of withdrawing money from demand deposit accounts on the money supply. It distinguishes between demand deposits and term deposits, highlighting that withdrawing money from demand deposits does not change the overall money supply but only shifts funds from demand deposits to currency in hand.”
61,”What is the importance of the term “Interest Coverage Ratio” of a firm in India? (2020)”,”1. It helps in understanding the present risk of a firm that a bank is going to give a loan to., 2. It helps in evaluating the emerging risk of a firm that a bank is going to give a loan to., 3. The higher a borrowing firm’s level of Interest Coverage Ratio, the worse is its ability to service its debt. Select the correct answer using the code given below. (a) 1 and 2 only (b) 2 only (c) 1 and 3 only (d) 1, 2 and 3”,2020
61,a,”Option (a) is correct: The explanation provides a detailed understanding of the interest coverage ratio, including its definition, calculation method, and significance. It highlights how the interest coverage ratio is used by lenders, investors, and creditors to assess a company’s ability to pay interest on its debt and evaluate its riskiness. Additionally, it clarifies that a higher coverage ratio indicates greater ease in making interest payments on debt or paying dividends.”
62,”If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do? (2020)”,”1. Cut and optimise the Statutory Liquidity Ratio, 2. Increase the Marginal Standing Facility Rate, 3. Cut the Bank Rate and Repo Rate. Select the correct answer using the code given below: (a) 1 and 2 only (b) 2 only (c) 1 and 3 only (d) 1, 2 and 3”,2020
62,b,”Option (b) is correct: The explanation presents an accurate overview of the monetary policy measures undertaken by the Reserve Bank of India (RBI). It correctly identifies the impact of changes in SLR and MSF Rate on liquidity and borrowing costs for banks. However, Statement 1 is incorrect as reducing SLR actually increases liquidity with banks, contrary to the statement.”
63,”Consider the following statements: (2020)”,”1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks., 2. One of the most important functions of DCCBs is to provide funds to the Primary Agriculture Credit Societies. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2”,2020
63,b,”Option (b) is correct: The explanation provides insights into the structure and functions of District Central Co-operative Banks (DCCBs) in rural cooperative banking. It clarifies the misconception in Statement 1 by highlighting the relatively low share of credit flow to agriculture from rural cooperatives compared to Scheduled Commercial Banks (SCBs) and Regional Rural Banks (RRBs). Additionally, it confirms the accuracy of Statement 2 regarding the role of DCCBs in mobilizing deposits and providing credit to the public and Primary Agricultural Credit Societies (PACS).”
64,”The Service Area Approach was implemented under the purview of (2019)”,”(a) Integrated Rural Development Programme, (b) Lead Bank Scheme, (c) Mahatma Gandhi National Rural Employment Guarantee Scheme, (d) National Skill Development Mission”,2019
64,b,”Option (b) is correct: The explanation offers a clear description of the Service Area Approach (SAA) in the context of banking policies and financial inclusion. It outlines the objectives and implementation of SAA, emphasizing its role in promoting productive lending and fostering development in rural and semi-urban areas. Moreover, it confirms the accuracy of Statement 2 regarding the introduction and goals of SAA.”
65,”The Chairman of public sector banks are selected by the: (2019)”,”(a) Banks Board Bureau, (b) Reserve Bank of India, (c) Union Ministry of Finance, (d) Management of concerned bank”,2019
65,a,”Option (a) is correct: The explanation provides comprehensive details about the role and functions of the Banks Board Bureau (BBB) in the appointment and development of heads for Public Sector Banks (PSBs) and financial institutions. It clarifies the inaccuracies in Statement 1 and confirms the accuracy of the statement regarding the recommendation and strategy development by BBB.”
66,”Which of the following is not included in the assets of a commercial bank in India? (2019)”,”(a) Advances, (b) Deposits, (c) Investments, (d) Money at call and short notice”,2019
66,b,”Option (b) is correct: The explanation provides a detailed overview of bank assets and liabilities, emphasizing the various components of assets including investments, loans, cash reserves, and liabilities such as deposits and borrowings. It accurately describes how banks use assets to generate profits and fulfill their financial obligations.”
67,”Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly? (2019)”,”(a) Certificate of Deposits, (b) Commercial Paper, (c) Promissory Note, (d) Participatory Note”,2019
67,d,”Option (d) is correct: The explanation succinctly defines Participatory Notes (P-Notes) and their function as overseas derivative instruments allowing unregistered overseas investors to invest in Indian equities. It clarifies the purpose and nature of P-Notes, confirming the accuracy of Statement 3.”
68,”Which one of the following is not the most likely measure the Government/ RBI takes to stop the slide of the Indian rupee? (2019)”,”(a) Curbing imports of nonessential goods-and promoting exports, (b) Encouraging Indian borrowers to issue rupee denominated Masala Bonds, (c) Easing conditions relating to external commercial borrowing, (d) Following an expansionary monetary policy”,2019
68,d,”Option (d) is correct: The explanation offers a comprehensive analysis of the impact of an expansionary monetary policy on the rupee’s depreciation. It outlines the potential consequences such as lower interest rates leading to flight of foreign capital, increased government spending fueling inflation and imports, and ultimately causing a depreciation of the rupee. Additionally, it identifies the inaccuracies in the other options and confirms the correctness of Option (d).”
69,”Consider the following statements: (2018)”,”1. Capital Adequacy Ratio (CAR) is the amount that banks have to maintain in the form of their own funds to offset any loss that banks incur if the account-holders fail to repay dues., 2. CAR is decided by each individual bank. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2”,2018
69,a,”Option (a) is correct: The explanation provides a clear definition and explanation of the Capital Adequacy Ratio (CAR) as a measure of a bank’s capital in relation to its risk-weighted assets and liabilities. It confirms the accuracy of Statement 1 and identifies the inaccuracy in Statement 2, which incorrectly attributes the decision of CAR to central banks and bank regulators.”
