ECCONOMY ONLYIAS - Sheet7 Flashcards
1
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
Q
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
A
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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."
70
70,"Which one of the following statements correctly describes the meaning of legal tender money? (2018)","(a) The money which is tendered in courts of law to defray the fee of legal cases, (b) The money which a creditor is under compulsion to accept in settlement of his claims, (c) The bank money in the form of cheques, drafts, bills of exchange etc., (d) The metallic money in circulation in a country",2018
70,b,"Option (b) is correct: The explanation accurately defines legal tender as any official medium of payment recognized by law, which creditors are obligated to accept for repayment of debt. It succinctly explains the concept of legal tender, confirming the accuracy of Statement 3."
71
71,"Consider the following statements: (2018)","1. The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities., 2. Treasury bills are issued by the Government of India and there are no treasury bills issued by the state Governments., 3. Treasury bills are issued at a discount from the par value. Which of the statements given above is/are correct? (a) 1 and 2 only (b) 3 only (c) 2 and 3 only (d) 1, 2 and 3",2018
71,c,"Option (c) is correct: Treasury bills are short-term debt instruments issued by the Government of India. They are typically issued in three tenors: 91 days, 182 days, and 364 days. These bills are issued at a discount from their face value and redeemed at par upon maturity, allowing investors to earn interest on the difference. The explanation validates the accuracy of Statements 2 and 3, which correctly describe the nature and issuance process of Treasury bills. However, it identifies the inaccuracy in Statement 1, which suggests that RBI manages the debt of state governments under separate agreements. In reality, RBI is the debt manager for both the Central Government and the State Governments, managing state government debt based on separate agreements."
72
72,"With reference to the governance of public sector banking in India, consider the following statements: (2018)","1. Capital infusion into public sector banks by the Government of India has steadily increased in the last decade., 2. To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected. 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
72,b,"Option (b) is correct: The merger of associate banks with the parent State Bank of India aimed to improve operational efficiency, achieve economies of scale, and enhance risk management practices. This consolidation also led to unified treasury operations, streamlining banking processes and reducing redundancies. The explanation acknowledges the accuracy of Statement 2, which correctly identifies the purpose and benefits of the merger. However, it identifies the inaccuracy in Statement 1, which implies a steady increase in capital infusion into public sector banks by the Government of India over the last decade. In reality, the capital infusion into public sector banks has not followed a consistent upward trend during this period."
73
73,"Which of the following statements is/are correct regarding the ‘Monetary Policy Committee (MPC)? (2017)","1. It decides the RBI’s benchmark interest rates., 2. It is a 12-member body including the Governor of RBI and is reconstituted every year., 3. It functions under the chairmanship of the Union Finance Minister. Select the correct answer using the code given below: (a) 1 only (b) 1 and 2 only (c) 3 only (d) 2 and 3 only",2017
73,a,"Option (a) is correct: The Monetary Policy Committee (MPC) plays a crucial role in determining the policy interest rate, which is necessary to achieve the inflation target set by the Government of India. This committee consists of six members, with three members appointed by the RBI and three members appointed by the Central Government. Contrary to Statement 2, the composition of the MPC includes both RBI-appointed and government-appointed members. Additionally, while the Governor of the Reserve Bank of India serves as an ex-officio member of the MPC, they do not hold the position of Chairperson, as stated incorrectly in Statement 3."
74
74,"The establishment of ‘Payment Banks’ is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context? (2016)","1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks., 2. Payment Banks can issue both credit cards and debit cards., 3. Payment Banks cannot undertake lending activities. Select the correct answer using the code given below. (a) 1 and 2 only (b) 1 and 3 only (c) 2 only (d) 1, 2 and 3",2016
74,b,"Option (b) is correct: Payment banks are permitted to carry out most banking operations, except for lending activities such as advancing loans or issuing credit cards. While they can accept deposits and provide other banking services, they are restricted from engaging in lending activities. Therefore, credit risk is indeed involved in payment banking operations, albeit to a lesser extent compared to traditional banks. The explanation validates the accuracy of Statements 1 and 3, which correctly identify the eligible promoters for payment banks and the restrictions on their lending activities. However, it identifies the inaccuracy in Statement 2, which implies that credit risk is not involved in payment banking operations."
75
75,"The term ‘Core Banking Solution’ is sometimes seen in the news. Which of the following statements best describes/describe this term? (2016)","1. It is a network of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts., 2. It is an effort to increase RBI’s control over commercial banks through computerization., 3. It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank. Select the correct answer using the code given below. (
75,a,"Option (a) is correct: Core Banking Solution (CBS) is a banking technology that enables customers to access various banking services from any branch of the bank. It provides centralized database systems that allow seamless integration of banking operations, facilitating account management and transaction processing across multiple branches. Contrary to Statement 2, CBS is not used by RBI as a tool to exercise control over commercial banks through computerization. Additionally, CBS is not directly related to Non-Performing Assets (NPAs), as suggested incorrectly in Statement 3."
76
76,"What is/are the purpose/purposes of the ‘Marginal Cost of Funds based Lending Rate (MCLR)’ announced by RBI? (2016)","1. These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances., 2. These guidelines help ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks. 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",2016
76,c,"Option (c) is correct: The objectives of Marginal Cost of Funds Based Lending Rate (MCLR) include improving the transmission of policy rates into lending rates, enhancing transparency in interest rate determination methods, ensuring fair loan rates for both lenders and borrowers, and fostering competitiveness among lenders. The explanation provides a comprehensive overview of the objectives of MCLR, aligning with the information provided in the passage."
77
77,"‘Pradhan Mantri Jan-Dhan Yojana’ has been launched for: (2015)","(a) Providing housing loans to poor people at cheaper interest rates., (b) Promoting women’s Self-help Groups in backward areas., (c) Promoting financial inclusion in the country., (d) Providing financial help to the marginalized communities.",2015
77,c,"Option (c) is correct: Financial inclusion and access to financial products and services are indeed key objectives of the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme. The scheme aims to provide banking services, including savings accounts, remittance, credit, insurance, and pension, to the unbanked population of India, thereby promoting financial inclusion and enhancing access to financial services. The explanation affirms the accuracy of the statement in identifying a core objective of the PMJDY scheme."
78
78,"When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen? (2015)","(a) India’s GDP growth rate increases drastically, (b) Foreign Institutional Investors may bring more capital into our country, (c) Scheduled Commercial Banks may cut their lending rates, (d) It may drastically reduce the liquidity to the banking system",2015
78,c,"Option (c) is correct: A reduction in the Statutory Liquidity Ratio (SLR) by the RBI provides banks with more flexibility to lower their lending rates, as it decreases the portion of deposits that banks are required to hold in the form of liquid assets like gold or government securities. By cutting the SLR, banks can free up funds that were previously held in compliance with this ratio, allowing them to extend more credit to consumers or invest in higher-yield assets. The explanation correctly interprets the implications of an SLR cut on lending rates, supporting the accuracy of the statement."
79
79,"‘Basel III Accord’ or simply ‘Basel III’ often seen in the new, seeks to: (2015)","(a) Develop national strategies for the conservation and sustainable use of biological diversity, (b) Improve banking sector’s ability to deal with financial and economic stress and improve risk management, (c) Reduce the greenhouse gas emissions but places a heavier burden on developed countries, (d) Transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals",2015
79,b,"Option (b) is correct: Basel III norms are aimed at enhancing the regulation, supervision, and risk management of banks worldwide. These norms prescribe minimum capital requirements, including tier-1 and tier-2 capital, to ensure banks' stability and resilience to financial shocks. Under Basel III, banks are required to maintain a minimum common equity tier-1 capital ratio of 4.5% and a minimum total capital ratio of 8%. The explanation provides a detailed overview of Basel III norms, confirming the accuracy of the statement."
80
80,"With reference to Indian economy, consider the following: (2015)","1. Bank rate, 2. Open market operations, 3. Public debt, 4. Public Revenue Which of the above is/are component/components of Monetary Policy? (a) 1 only (b) 2, 3 and 4 (c) 1 and 2 (d) 1, 3 and 4",2015
80,c,"Option (c) is correct: The monetary policy tools implemented by the RBI include open market operations, bank rate, cash reserve ratio (CRR), statutory liquidity ratio (SLR), repo rate, and reverse repo rate. Among these tools, the bank rate represents the rate at which the RBI lends money to commercial banks, while open market operations involve the buying and selling of government securities to adjust liquidity in the market. The explanation accurately identifies the functions of the bank rate and open market operations, while correctly noting that public revenue and debt are not components of monetary policy."
81
81,"The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time Liabilities’, sometimes appearing in news, are used in relation to: (2014)","(a) Banking operations, (b) Communications networking, (c) Military strategies, (d) Supply and demand of agricultural products",2014
81,a,"Option (a) is correct: The Marginal Standing Facility (MSF) indeed serves as a window for banks to borrow from the Reserve Bank of India (RBI) in times of emergency when interbank liquidity dries up completely. This facility allows banks to access funds from the RBI to meet their short-term liquidity needs, providing a crucial mechanism to maintain stability in the banking system during liquidity crises. The explanation concisely summarizes the purpose and function of the MSF, supporting the accuracy of the statement."
82
82,"What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas? (2014)","1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages., 2. It enables the beneficiaries in the rural areas to make deposits and withdrawals. Select the correct answer using the code given below. (a) 1 only (b) 2 only (c) Both 1 and 2 only (d) Neither 1 nor 4",2014
82,c,"Option (c) is correct: The Business Correspondent (BC) Model introduced by the Reserve Bank of India (RBI) in 2006 aims to enhance financial inclusion by bringing banking services to underserved communities. Through this model, individuals in remote areas can access basic banking facilities such as deposit and withdrawal services through designated business correspondents operating in their villages. Additionally, the BC model facilitates the direct transfer of government subsidies and social security benefits to beneficiaries' accounts, promoting financial empowerment and access to formal financial services. The explanation accurately outlines the objectives and functioning of the BC model, confirming the correctness of the statement."
83
83,"In the context of the Indian economy, which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’? (2014)","1. To enable the Central Bank to control the amount of advances the banks can create., 2. To make the people’s deposits with banks safe and liquid., 3. To prevent the commercial banks from making excessive profits., 4. To force the banks to have sufficient vault cash to meet their day-to-day requirements. Select the correct answer using the code given below. (a) 1 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2, 3 and 4",2014
83,a,"Option (a) is correct: Lowering the reserve ratio indeed increases the money supply in the economy by allowing banks to create more credit and extend additional loans to borrowers. By reducing the reserve requirements, the central bank enables commercial banks to utilize a larger portion of their deposits for lending purposes, thereby expanding the overall money supply in the economy. The explanation effectively explains the impact of lowering the reserve ratio on money supply and credit creation, supporting the accuracy of the statement."
84
84,"Supply of money remaining the same when there is an increase in demand for money, there will be: (2013)","(a) A fall in the level of prices, (b) An increase in the rate of interest, (c) A decrease in the rate of interest, (d) An increase in the level of income and employment",2013
84,b,"Option (b) is correct: An increase in demand for money, coupled with a constant money supply, leads to an increase in the rate of interest. This phenomenon occurs as banks strive to attract customers and encourage deposits by offering higher interest rates, thereby promoting savings over spending. The explanation provides a clear and accurate depiction of the relationship between money demand, interest rates, and savings behavior, validating the correctness of the statement."
85
85,"In the context of Indian economy, ‘Open Market Operations’ refers to: (2013)","(a) Borrowing by scheduled banks from the RBI, (b) Lending by commercial banks to industry and trade, (c) Purchase and sale of government securities by the RBI, (d) None of the above",2013
85,c,"Option (c) is correct: Open Market Operations (OMO) involve the purchase and sale of government securities by the Reserve Bank of India (RBI) to regulate liquidity in the financial system. When the RBI buys securities, it injects money into the economy, leading to an expansionary effect by increasing the money supply. Conversely, when the RBI sells securities, it removes money from the economy, resulting in a contractionary effect by reducing the money supply. The explanation succinctly describes the mechanism and effects of OMO, supporting the accuracy of the statement."
86
86,"Priority Sector Lending by banks in Indian constitutes the lending to: (2013)","(a) Agriculture, (b) Micro and small enterprises, (c) Weaker sections, (d) All of the above",2013
86,d,"Option (d) is correct: Under the Priority Sector Lending (PSL) guidelines, the Reserve Bank of India (RBI) mandates banks to allocate a certain portion of their funds to specified sectors such as agriculture, Micro, Small and Medium Enterprises (MSMEs), export credit, education, etc. This regulatory requirement aims to ensure that banks contribute to the development of priority sectors by providing them with adequate financial support. The explanation concisely summarizes the PSL mandate, affirming the accuracy of the statement."
87
87,"Which of the following grants/grant direct credit assistance to rural households? (2013)","1. Regional Rural Banks, 2. National Bank for Agriculture and Rural Development, 3. Land Development Banks. Select the correct answer using the codes given below. (a) 1 and 2 only (b) 2 only (c) 1 and 3 only (d) 1, 2 and 3",2013
87,c,"Option (c) is correct: Statement 1 accurately describes the main objective of Regional Rural Banks (RRBs), which is to provide credit and banking facilities to small and marginal farmers, artisans, laborers, and small entrepreneurs in rural areas to foster rural economic development. However, Statement 2 is incorrect as NABARD primarily focuses on promoting agricultural and rural development by providing refinance facilities to various financial institutions, including Commercial banks, State Cooperative Banks, Central Cooperative Banks, Regional Rural Banks, and Land Development Banks. NABARD does not directly extend credit assistance to rural households. Statement 3 is correct, as Land Development Banks are established to offer long-term loans to farmers for the purchase of equipment such as tractors and pump sets. The explanation provides accurate clarification on the objectives and functions of RRBs, NABARD, and Land Development Banks, validating the correctness of the statements."
88
88,"The Reserve Bank of India regulates the commercial banks in matters of: (2013)","1. Liquidity of assets, 2. Branch expansion, 3. Merger of banks, 4. Winding-up of banks. Select the correct answer using the codes given below: (a) 1 and 4 only (b) 2, 3 and 4 only (c) 1, 2 and 3 only (d) 1, 2, 3 and 4",2013
88,d,"Option (d) is correct: All four statements accurately describe various functions and regulatory actions undertaken by the Reserve Bank of India (RBI). Statement 1 highlights RBI's role as the regulator of banks in India, utilizing mechanisms such as Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) to monitor and control the liquidity of bank assets. Statement 2 outlines RBI's Branch Authorization Policy, which grants general permission for domestic Scheduled Commercial Banks to open branches in Tier-1 and Tier-2 centers, with prior approval required for certain regions. Statement 3 discusses the regulatory oversight of mergers and acquisitions (M&As) in the banking sector, necessitating clearance from both the Competition Commission of India (CCI) and RBI. Statement 4 highlights RBI's authority to issue orders for the winding up of banks, as evidenced by recent actions against institutions like Sahara India Financial Corp (SIFCL) and Siddharth Cooperative Bank. The explanation effectively validates the accuracy of each statement by providing context and clarification on the functions and regulatory actions of the RBI."
89
89,"Consider the following liquid assets: (2013)","1. Demand deposits with the banks, 2. Time deposits with the banks, 3. Savings deposits with the banks, 4. Currency. The correct sequence of these assets in the decreasing order of liquidity is (a) 1-4-3-2 (b) 4-3-2-1 (c) 2-3-1-4 (d) 4-1-3-2",2013
89,d,"Option (d) is correct: The explanation provides a comprehensive overview of different types of deposits held by banks and their respective liquidity levels. It accurately describes demand deposits as funds deposited in bank accounts that can be withdrawn on-demand, typically used for everyday expenses. Time deposits are characterized as interest-bearing accounts with fixed maturity dates, offering higher interest rates for longer terms but with reduced liquidity compared to demand deposits. Savings deposits are highlighted as interest-bearing accounts suitable for short-term needs, offering modest interest rates and higher liquidity than time deposits. The explanation correctly identifies currency as the most liquid form of money, followed by demand deposits, savings deposits, and time deposits, which are the least liquid. Overall, the explanation provides a clear understanding of the liquidity hierarchy among different types of bank deposits, supporting the accuracy of the statement."
90
90,"The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following? (2012)","1. Other banks retain their deposits with the RBI., 2. The RBI lends funds to the commercial banks in times of need., 3. The RBI advises the commercial banks on monetary matters. Select the correct answer using the codes given below: (a) 2 and 3 only (b) 1 and 2 only (c) 1 and 3 only (d) 1, 2 and 3",2012
90,d,"Option (d) is correct: All three statements accurately depict various roles and functions performed by the Reserve Bank of India (RBI). Statement 1 highlights RBI's role as the banker, agent, and adviser to the Government of India and states, as well as other commercial banks, performing similar functions as banks do for their customers. Statement 2 emphasizes RBI's role in lending money to all commercial banks in the country, serving as a key source of liquidity and financial support for the banking system. Statement 3 discusses RBI's advisory functions, providing guidance and expertise to banks on financial matters and broader economic issues. The explanation effectively validates the accuracy of each statement by outlining the multifaceted roles and functions of the RBI in facilitating financial stability and promoting economic growth."
91
91,"The basic aid of Lead Bank Scheme is that: (2012)","(a) Big banks should try to open offices in each district., (b) There should be stiff competition among the various nationalized banks., (c) Individual banks should adopt a particular district for intensive development., (d) All the banks should make intensive efforts to mobilise deposits.",2012
91,c,"Option (c) is correct: The Lead Bank Scheme, introduced by the Reserve Bank of India (RBI) on the recommendation of the Gadgil Study Group and Banker’s Committee, was implemented towards the end of 1969. The scheme aims to assign lead roles to individual banks, both in the public and private sectors, for specific districts. The primary objective of the Lead Bank Scheme is to facilitate intensive development in adopted districts by ensuring appropriate credit deployment and extending banking facilities to unbanked areas. The explanation provides a succinct overview of the Lead Bank Scheme, outlining its inception, objectives, and implementation approach, thereby validating the accuracy of the statement."
92
92,"Why is the offering of “teaser loans” by commercial banks a cause of economic concern? (2011)","1. The teaser loans are considered to be an aspect of subprime lending and banks may be exposed to the risk of defaulters in future., 2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units. 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
92,a,"Option (a) is correct: Teaser loans are indeed considered an aspect of subprime lending, as they typically attract borrowers with lower credit ratings by offering lower initial interest rates for a fixed period. Statement 2, however, is incorrect, as teaser loans are generally targeted at a wide range of borrowers, including new homeowners and entrepreneurs, without necessarily requiring prior experience. The explanation elaborates on the concept of teaser loans, highlighting their promotional nature and association with subprime lending practices, thus confirming the accuracy of statement 1 and correcting the inaccuracy of statement 2."
93
93,"In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities? (2011)","(a) Commercial Banks, (b) Cooperative Banks, (c) Regional Rural Banks, (d) Microfinance Institutions",2011
93,a,"Option (a) is correct: The statement accurately identifies commercial banks as the primary contributors to credit disbursement in agriculture and allied activities in India, with a share of around 60%. Cooperative banks follow with approximately 30% of credit disbursement, while Regional Rural Banks (RRBs) and other institutions contribute the remaining share. The explanation reinforces the statement by providing an overview of the distribution of credit disbursement among different banking institutions, thereby validating its accuracy."
94
94,"Which of the following can aid in furthering the Government’s objective of inclusive growth? (2011)","1. Promoting Self-Help Groups., 2. Promoting Micro, Small and Medium Enterprises., 3. Implementing the Right to Education Act. 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
94,d,"Option (d) is correct: All three statements are accurate representations of initiatives and policies aimed at promoting inclusive growth in India. Statement 1 emphasizes the role of Self-Help Groups (SHGs) in fostering financial inclusion, as their proliferation correlates with improved financial access and empowerment at the grassroots level. Statement 2 highlights the significance of Micro, Small, and Medium Enterprises (MSMEs) in driving socio-economic development and financial inclusion through employment generation and rural development. Statement 3 underscores the importance of the Right to Education (RTE) Act in ensuring access to education for disadvantaged sections of society, thereby contributing to inclusive growth by empowering marginalized communities. The explanation effectively validates each statement by providing context and elaboration on the role of SHGs, MSMEs, and the RTE Act in fostering inclusive growth, thereby confirming their accuracy."
95
95,"Microfinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under microfinance is/are: (2011)","1. Credit facilities, 2. Savings facilities, 3. Insurance facilities, 4. Fund Transfer facilities Select the correct answer using the codes given below the lists: (a) 1 only (b) 1 and 4 only (c) 2 and 3 only (d) 1, 2, 3 and 4",2011
95,d,"Option (d) is correct: The explanation provides a comprehensive overview of microfinance and its role in promoting financial inclusion. It defines microfinance as a banking service aimed at providing financial assistance to unemployed or low-income individuals or groups to alleviate poverty through income-generating activities. Additionally, it identifies various entities, including Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), small finance banks, cooperative banks, Non-Banking Financial Companies (NBFCs), and NBFC-Microfinance Institutions (MFIs), involved in providing microfinance services in India. The explanation further elucidates the concept of microfinance by highlighting the provision of micro-loans, micro-savings, and microinsurance to underserved populations, thereby affirming the accuracy of the statement."
96
96,"The money multiplier in an economy increases with which one of the following? (2019/2021)","(a) Increase in the Cash Reserve Ratio in the banks, (b) Increase in the Statutory Liquidity Ratio in the banks, (c) Increase in the banking habit of the people, (d) Increase in the population of the country",2019/2021
96,c,"Option (c) is correct: The explanation provides a clear definition of the money multiplier as the ratio of the money supply to the base money and reserve ratio. It illustrates this concept with an example, demonstrating how an increase in banking activity, leading to more deposits, can result in a higher money multiplier. The explanation effectively validates the accuracy of the statement by providing a concise overview of the money multiplier and its relationship with banking habits and deposit creation."
97
97,"What is/are the most likely advantages of implementing ‘Goods and Services Tax’ (GST)? (2017)","1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves. 3. It will enormously increase the growth and size of the economy of India and will enable it to overtake China in the near future. 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",2017
97,a,"Option (a) is correct: The explanation confirms the accuracy of statement 1 by outlining the key features and objectives of the Goods and Services Tax (GST), emphasizing its role as a unified indirect tax system for the entire nation. However, it corrects the inaccuracies in statements 2 and 3 by clarifying that GST implementation does not guarantee a drastic reduction in the Current Account Deficit (CAD) or enable India to surpass China economically. The detailed explanation provides insights into the various aspects of GST, including its structure, tax slabs, compensation mechanism, input tax credit, and advantages/disadvantages, thereby confirming the accuracy of statement 1 and correcting the inaccuracies of statements 2 and 3."
98
98,"Under which of the following circumstances may ‘capital gains’ arise? (2012)","1. When there is an increase in sales of product., 2. When there is a natural increase in the value of the property owned., 3. When you purchase a painting, there is a growth in its value due to an increase in its popularity. Select the correct answer using the codes given below: (a) 1 only (b) 2 and 3 only (c) 2 only (d) 1, 2 and 3",2012
98,b,"Option (b) is correct: The explanation validates the accuracy of statement 2 by providing a comprehensive definition of capital gains as the increase in a capital asset's value realized upon its sale. It also clarifies that capital gains can apply to various types of assets, including those purchased for personal use, thereby confirming the accuracy of statement 3. However, it corrects the inaccuracy in statement 1 by explaining that an increase in sales of products is not considered capital gains. The detailed explanation provides clarity on the concept of capital gains and the types of assets to which it applies, thereby validating the accuracy of statement 2 and correcting the inaccuracy of statement 1."
99
99,"Which one of the following is not a feature of “Value Added Tax”? (2011)","(a) It is a multi-point destination-based system of taxation, (b) It is a tax levied on value addition at each stage of transaction in the production distribution chain, (c) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer, (d) It is basically subject of the Central Government and the State Governments are only a facilitator for its successful implementation",2011
99,d,"Option (d) is correct: The explanation provides a detailed overview of value-added tax (VAT), highlighting its characteristics, implementation, and impact on consumption. It clarifies that VAT is levied at each stage of production and sale, ultimately paid by the consumer based on the value added at each stage. The comprehensive explanation validates the accuracy of statement 1 by providing insights into the nature and application of VAT, thereby confirming its correctness."
100
100,"With reference to the expenditure made by an organization or a company, which of the following statements is/are correct? (2022)","1. Acquiring new technology is capital expenditures., 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. 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",2022
100,a,"Option (a) is correct: The explanation validates the accuracy of statement 1 by providing a clear definition of capital expenditure (CapEx) as the funds used by a company to acquire, upgrade, and maintain physical assets. However, it corrects the inaccuracy in statement 2 by clarifying that equity financing is an example of non-debt capital receipts, not debt financing. The detailed explanation provides clarity on the concepts of capital expenditure and equity financing, thereby validating the accuracy of statement 1 and correcting the inaccuracy of statement 2."
101
101,"With reference to Indian economy, consider the following statements: (2022)","1. A share of the household financial savings goes towards government borrowings., 2. Dated securities issued at market related rates in auctions form a large component of internal debt. Which of the above statements is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2",2022
101,c,Basic Concept of Economy,"Option (c) is correct: The household financial savings used in part to finance government borrowing. Governmental securities, often known as G-secs and Treasury Bills, are issued as a means of borrowing. Over 93% of the total state debt is made up of internal debt. Internal loans, which account for the majority of the public debt, are further separated into marketable and non-marketable debt."
102
102,"Which one of the following effects of the creation of black money in India has been the main cause of worry to the Government of India? (2021)","(a) Diversion of resources to the purchase of real estate and investment in luxury housing, (b) Investment in unproductive activities and purchase of precious stones, jewellery, gold, etc., (c) Large donations to political parties and growth of regionalism, (d) Loss of revenue to the State Exchequer due to tax evasion",2021
102,d,Black Money,"Option (d) is correct: Black money is the money that comes from illegal activity or unreported activity (maybe legal). The creation of black money in India causes the loss of revenue to the State Exchequer due to tax evasion, which is the main cause of worry for the Government of India. Shell companies are another major source of black money coming to an economy when companies evade the tax authorities by routing their income/profits through tax havens."
103
103,"In the context of the Indian economy, non-financial debt includes which of the following? (2020)","1. Housing loans owed by households, 2. Amounts outstanding on credit cards, 3. Treasury bills 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
103,d,Debt Financing,"Option (d) is correct: Debt financing mainly includes two types of debt: Public Debt and Non-Financial Debt. Public Debt is further divided into Internal Public Debt and External Public Debt. Non-Financial Debt includes credit instruments issued by businesses, consumers, and governments. Examples of non-financial debt include housing loans owed by households, amounts outstanding on credit cards, treasury bills, etc."
104
104,"Consider the following statements: (2017)","1. Tax revenue as a percent of GDP of India has steadily increased in the last decade., 2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade. 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",2017
104,d,Tax Revenue/Fiscal Deficit,"Option (d) is correct: Recent tax policy changes have impacted tax revenue and fiscal deficit. Tax rates, including service tax, personal income tax, and corporation tax, have been reduced to boost aggregate demand, resulting in stagnant tax revenue as a percentage of GDP. Similarly, the fiscal deficit as a percentage of GDP has not steadily increased over the past decade."
105
105,"There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit? (2016)","1. Reducing revenue expenditure, 2. Introducing new welfare schemes, 3. Rationalising subsidies, 4. Reducing import duty Select the correct answer using the code given below. (a) 1
105,c,Budget,"Option (c) is correct: Reducing revenue expenditure and rationalizing subsidies would help in bridging the budget deficit gap. Introducing new welfare schemes and expanding industries would increase expenditure, thereby widening the budget deficit. The impact of reducing import duty on the budget deficit is not explicitly stated, but it would likely depend on various factors such as the specific duty rates and their impact on government revenue."
106
106,"Which of the following is/are included in the capital budget of the Government of India? (2016)","1. Expenditure on acquisition of assets like roads, buildings, machinery, etc. 2. Loans received from foreign governments 3. Loans and advances granted to the States and Union Territories 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
106,d,Budget,"Option (d) is correct: All three statements are accurate regarding the budget. Capital expenditure includes spending on acquiring assets like land, buildings, machinery, etc., as well as repayment of government borrowings. Capital receipts consist of sources like loan borrowings, disinvestments, and funds received from issuing shares or debentures. Loans and advances by the central government to state and union territory governments are also considered part of the capital budget of the Government of India."
107
107,"With reference to ‘Financial Stability and Development Council’, consider the following statements: (2016)","1. It is an organ of NITI Aayog. 2. It is headed by the Union Finance Minister. 3. It monitors macroprudential supervision of the economy. Which of the statements given above is/are correct? (a) 1 and 2 only (b) 3 only (c) 2 and 3 only (d) 1, 2 and 3",2016
107,c,Banking and NBFCs,"Option (c) is correct: Statement 1 is incorrect as the Financial Stability and Development Council (FSDC) was established in December 2010, before the establishment of NITI Aayog. Statement 2 is accurate as the Chairman of the FSDC is the finance minister. Statement 3 is also correct as the FSDC monitors macro-prudential supervision of the economy, including the functioning of large financial conglomerates."
108
108,"With reference to the Fourteenth Finance Commission, which of the following statements is/are correct? (2015)","1. It has increased the share of States in the central divisible pool from 32 percent to 42 percent. 2. It has made recommendations concerning sector-specific grants. 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",2015
108,a,Finance Commission,"Option (a) is correct: Statement 1 accurately describes the recommendations of the Fourteenth Finance Commission, which increased the states' share in the central divisible pool from 32% to 42%. Statement 2 is incorrect as the Fourteenth Finance Commission did not make recommendations concerning sector-specific grants. The Finance Commission is a constitutional body appointed by the President and plays a crucial role in the fiscal federalism of India."
109
109,"With reference to the Union Government, consider the following statements: (2015)","1. The Department of Revenue is responsible for the preparation of the Union Budget that is presented to the Parliament. 2. No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India. 3. All the disbursements made from Public Account also need the authorization from the Parliament of India. Which of the statements given above is/are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 2 only (d) 1, 2 and 3",2015
109,c,Public Finance,"Option (c) is correct: Statement 1 is incorrect as the budget is prepared by the Department of Expenditure, not the Department of Economic Affairs. Statement 2 accurately describes the Consolidated Fund of India, which is a fund where all receipts are credited and payments are debited. Statement 3 is incorrect as provident fund deposits, savings bank deposits, and remittances are credited to the Consolidated Fund of India, not the Public Account."
110
110,"A decrease in tax to GDP ratio of a country indicates which of the following? (2015)","1. Slowing economic growth rate 2. Less equitable distribution of national income Select the correct answer using the codes given below. (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2",2015
110,a,Economic Growth,"Option (a) is correct: Statement 1 is accurate in highlighting the pressure on the government to meet fiscal deficit targets due to a lower tax-to-GDP ratio. Statement 2 is incorrect as the tax-to-GDP ratio does not directly indicate the distribution of national income in the economy. The tax-to-GDP ratio is a crucial metric for assessing the government's revenue generation relative to the size of the economy."
111
111,"“Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which one of the following? (2022)","(a) Asian Development Bank (b) International Monetary Fund (c) United Nations Environment Programme Finance Initiative (d) World Bank",2022
111,b,Financial Assistance,"Option (b) is correct: Both the Rapid Financing Instrument (RFI) and Rapid Credit Facility (RCF) are arms of the International Monetary Fund (IMF) that provide financial assistance to countries in need. The RFI offers rapid financial assistance to member countries facing urgent balance of payment needs, while the RCF provides concessional financial assistance to low-income countries with no ex-post conditionality. Recent events in Sri Lanka have highlighted the importance of understanding international financial mechanisms like the RFI and RCF."
112
112,"With reference to the Indian economy, consider the following statements: (2022)","1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee. 2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness. 3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER. Which of the statements are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3",2022
112,c,Exchange Rate,"Option (c) is correct: NEER (Nominal Effective Exchange Rate) is a weighted average of bilateral nominal exchange rates of the home currency in terms of foreign currencies. An increase/decrease in NEER indicates the appreciation/depreciation of the home currency against a weighted basket of currencies. REER (Real Effective Exchange Rate) is NEER adjusted by relative price differentials, typically captured in inflation differentials between the home economy and trading partners. Higher inflation leads to a greater divergence between NEER and REER."
113
113,"Consider the following statements: (2022)","1. Tight monetary policy of the US Federal Reserve could lead to capital flight. 2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). 3. Devaluation of domestic currency decreases the currency risk associated with ECBs. 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
113,a,Monetary Policy and External Commercial Borrowings,"Option (a) is correct: A tight monetary policy involves increasing interest rates to constrain borrowing and stimulate savings, which can discourage investment and lead to capital flight. Capital flight reduces money supply, driving up interest costs, including those for firms with external commercial borrowings. Devaluation decreases the value of a currency within a fixed exchange rate system, increasing currency risks associated with ECBs and resulting in higher interest costs for borrowers."
114
114,"Consider the following statements: (2021)","The effect of the devaluation of a currency is that it necessarily: 1. Improves the competitiveness of domestic exports in the foreign markets. 2. Increases the foreign value of the domestic currency 3. Improves the trade balance Which of the above statements is/are correct? (a) 1 only (b) 1 and 2 (c) 3 only (d) 2 and 3",2021
114,a,BoP,"Option (a) is correct: Devaluation decreases the value of a currency within a fixed exchange rate system, making exports cheaper to foreign customers and improving the competitiveness of domestic exports. However, devaluation also increases the debt burden on foreign loans valued in the native currency and might not ultimately lead to an improvement in the trade balance."
115
115,"Consider the following: (2021)","1. Foreign currency convertible bonds 2. Foreign institutional investment with certain conditions 3. Global depository receipts 4. Non-resident external deposits Which of the above can be included in Foreign Direct Investments? (a) 1, 2 and 3 (b) 3 only (c) 2 and 4 (d) 1 and 4",2021
115,a,Foreign Investment,"Option (a) is correct: FCCBs (Foreign Currency Convertible Bonds), Foreign Institutional Investment, and Global Depository Receipts are instruments for foreign investment in India. Non-resident external deposits, while a form of foreign investment, create debts in the balance of payment accounts and are not considered part of FDI."
116
116,"With reference to the international trade of India at present, which of the following statements is/are correct? (2020)","1. India’s merchandise exports are less than its merchandise imports. 2. India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years. 3. India’s exports of services are more than its imports of services. 4. India suffers from an overall trade/current account deficit. Select the correct answer using the code given below: (a) 1 and 2 only (b) 2 and 4 only (c) 3 only (d) 1, 3 and 4 only",2020
116,d,BoP,"Option (d) is correct: India's current account deficit (CAD) primarily arises from the merchandise trade, where imports exceed exports. This deficit is evident in the data provided, showing higher imports compared to exports during a specific period. While imports of certain commodities have experienced positive growth rates, India maintains a surplus in net services, where service exports exceed imports. The CAD is a measure of the shortfall between exports and imports, and recent figures indicate a deficit of 2.1% in 2018-19 and 1.5% of GDP in the first half of 2019-20."
117
117,"In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis? (2019)","1. The foreign currency earnings of India’s IT sector 2. Increasing the government expenditure 3. Remittances from Indians abroad Select the correct answer using the code given below. (a) 1 only (b) 1 and 3 only (c) 2 only (d) 1, 2 and 3",2019
117,b,Currency crisis/BoP,"Option (b) is correct: Remittances from abroad and foreign currency earnings from India's IT sector contribute to increased inflow of foreign currencies, thereby boosting the foreign exchange reserves. Government expenditure does not directly affect the value of the currency or currency reserves. A currency crisis typically arises from a decline in the value of a country's currency, leading to instabilities in exchange rates and reduced purchasing power."
118
118,"Consider the following statements: (2019)","1. Most of India’s external debt is owed by governmental entities. 2. All of India’s external debt is denominated in US dollars. 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",2019
118,d,External Debt,"Option (d) is correct: The largest component of India's external debt is denominated in US dollars, comprising 45.9% of the total debt at the end of December 2018. Commercial borrowings represent the largest share of external debt, followed by NRI deposits and short-term trade credit. The composition of external debt is essential for understanding the country's debt profile and its implications for economic stability."
119
119,"Consider the following statements: (2019)","1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries. 2. In terms of PPP dollars, India is the sixth largest economy in the world. 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",2019
119,a,Purchasing Power,"Option (a) is correct: Purchasing Power Parity (PPP) is an economic theory that compares different countries' currencies based on a basket of goods approach. It measures the amount of one country's currency required to purchase a similar basket of goods and services compared to another country's currency. China's economy is the largest in terms of PPP dollars, followed by the US and India, respectively."
120
120,"India enacted the Geographical Indications of Goods (Registration and Protection)
120,d,IP Related issues/WTO,"Option (d) is correct: Geographical Indications (GI) are a form of intellectual property recognized under the WTO's TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement. GI identifies a good as originating from a specific territory, region, or locality, with qualities attributable to its geographical origin. India enacted legislation to protect GIs in compliance with TRIPS. The Controller General of Patents, Designs & TradeMarks oversees the registration and protection of GIs in India."
121
121,"With reference to the ‘National Intellectual Property Rights Policy’, consider the following statements: (2017)","1. It reiterates India’s commitment to the Doha Development Agenda and the TRIPS Agreement. 2. Department of Industrial Policy and Promotion is the nodal agency for regulating intellectual property rights in India.",2017
121,c,IP Related issues,"Option (c) is correct: The National Intellectual Property Rights Policy was introduced by India as part of its commitment to the Doha Development Agenda and the TRIPS Agreement. It aims to create an ecosystem supportive of innovation and creativity, coordinated by the Department of Industrial Policy and Promotion (DIPP). The TRIPS Agreement, effective from January 1, 1995, provides strong protection for intellectual property rights among all member nations of the World Trade Organization (WTO)."
122
122,"Which of the following best describes the term ‘import cover’, sometimes seen in the news? (2016)","(a) It is the ratio of value of imports to the Gross Domestic Product of a country (b) It is the total value of imports of a country in a year (c) It is the ratio between the value of exports and that of imports between two countries (d) It is the number of months of imports that could be paid for by a country’s international reserves",2016
122,d,BoP,"Option (d) is correct: Import cover is a crucial indicator of currency stability, measuring the number of months of money available in the national bank to cover the cost of imports or the stock of foreign exchange reserves in terms of months of retained imports of goods. It reflects a country's ability to finance its imports and maintain currency stability based on its reserves."
123
123,"In the context of which of the following do you sometimes find the terms ‘amber box, blue box and green box’ in the news? (2016)","(a) WTO affairs (b) SAARC affairs (c) UNFCCC affairs (d) India-EU negotiations on FTA",2016
123,a,WTO,"Option (a) is correct: Domestic agricultural subsidies in the WTO are classified into three categories: Amber Box, Blue Box, and Green Box. Amber Box subsidies are those that distort commerce and production, while Blue Box subsidies have conditions designed to reduce distortion. Green Box subsidies do not distort trade or cause minimal distortions and must be government-funded without involving price support."
124
124,"With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: (2016)","1. IMFC discusses matters of concern affecting the global economy, and advises the International Monetary Fund (IMF) on the direction of its work. 2. The World Bank participates as an observer in IMFC’s meetings.",2016
124,c,Various Financial Committee/Organisations,"Option (c) is correct: The International Monetary and Financial Committee (IMFC) advises and reports to the IMF Board of Governors on the supervision and management of the international monetary and financial system. It lacks formal decision-making authority but provides strategic direction to IMF policies. Several international institutions, including the World Bank, participate as observers in IMFC meetings."
125
125,"With reference to Indian economy, consider the following statements: (2015)","1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade. 2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.",2015
125,b,Economic Growth,"Option (b) is correct: Gross domestic product at market prices (GDP) is the sum of added values of all activities producing goods and services, including taxes and minus subsidies on products. It reflects the total wealth generated by both private and public agents in a nation's territory over a specific time frame. Real GDP is an inflation-adjusted measure used for meaningful comparisons of GDP across years."
126
126,"There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit? (2015)","1. Reducing revenue expenditure 2. Introducing new welfare schemes 3. Rationalising subsidies 4. Expanding industries",2015
126,a,Public Finance,"Option (a) is correct: Both statements 1 and 3 are correct. Budget deficit occurs when expenditures exceed revenue, and reducing revenue expenditure can help bridge the gap. Subsidies are indeed a part of expenditure, and rationalizing them can reduce the deficit. However, introducing new welfare schemes and expanding industries usually increase expenditure and require capital infusion, thus worsening the deficit."
127
127,"Convertibility of rupee implies: (2015)","(a) being able to convert rupee notes into gold. (b) allowing the value of rupee to be fixed by market forces. (c) freely permitting the conversion of rupee to other currencies and vice versa. (d) developing an international market for currencies in India.",2015
127,c,Currency Convertibility,"Option (c) is correct: Currency convertibility refers to the ease with which a country's currency can be freely converted into any other foreign currency or gold at market-determined exchange rates. It facilitates financial transactions for the export and import of goods and services by allowing easy conversion of currency."
128
128,"The problem of international liquidity is related to the nonavailability of: (2015)","(a) Goods and services (b) Gold and silver (c) Dollars and other hard currencies (d) Exportable surplus",2015
128,c,Basic Economic Concepts,"Option (c) is correct: International liquidity refers to the resources available to countries' monetary authorities for meeting balance of payments deficits. It includes assets readily available for international transactions, such as gold and widely accepted foreign currencies. Developing countries often face challenges related to international liquidity."
129
129,"With reference to the Union Budget, which of the following is/are covered under Non-Plan Expenditure? (2014)","1. Defence expenditure 2. Interest payments 3. Salaries and pensions 4. Subsidies",2014
129,c,Public Finance,"Option (c) is correct: Non-plan expenditure includes both revenue and capital expenditure of the government, covering expenses not included in the Plan Expenditure. It consists mainly of interest payments, pensions, statutory transfers to state and union territory governments, defence costs, and subsidies. Revenue and capital expenses are incurred for defence services."
130
130,"With reference to Balance of Payments, which of the following constitutes/constitute the Current Account? (2014)","1. Balance of trade 2. Foreign assets 3. Balance of invisibles 4. Special Drawing Rights",2014
130,c,BoP,"Option (c) is correct: The balance of payments (BoP) records all monetary transactions between a country's residents and the rest of the world. A deficit occurs when imports exceed exports. The BoP comprises the current account (balance of trade, net remittances, and transactions in commodities and services) and the capital account (foreign investment, external borrowings, etc.)."
131
131,"Which of the following constitute a Capital Account? (2013)","1. Foreign Loans 2. Foreign Direct Investment 3. Private Remittances 4. Portfolio Investment",2013
131,b,BoP,"Option (b) is correct: Statements 1, 2, and 4 are correct. The capital account of the balance of payments records the net change in physical or financial asset ownership for a country. It includes transactions such as Foreign Direct Investment, Portfolio Investment, foreign loans, and changes in reserve accounts. Private remittances, on the other hand, come under the Current account. The Balance of Payment (BoP) is a systematic record of all economic transactions between the residents of one country and the residents of another in a financial year, consisting of the balance of trade, balance of current account, and capital account."
132
132,"Which one of the following groups of items is included in India’s foreign-exchange reserves? (2013)","(a) Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries (b) Foreign-currency assets, gold holdings of the RBI and SDRs (c) Foreign-currency assets, loans from the World Bank and SDRs (d) Foreign-currency assets, gold holdings of the RBI, and loans from the World Bank",2013
132,b,Forex Reserve,"Option (b) is correct: The Reserve Bank of India (RBI) Act and the Foreign Exchange Management Act, 1999 govern India's foreign exchange reserves. RBI accumulates foreign currency reserves through open market operations. India's foreign exchange reserves include foreign currency assets (FCA), gold, special drawing rights (SDRs), and reserve tranche position (RTP) in the International Monetary Fund (IMF). These reserves act as a cushion against rupee volatility."
133
133,"Which of the following would include Foreign Direct Investment in India? 1. Subsidiaries of foreign companies in India. 2. Majority foreign equity holding in Indian companies. 3. Companies exclusively financed by foreign companies. 4. Portfolio investment. Select the correct answer using the codes given below:", "(a) 1, 2, 3 and 4; (b) 2 and 4 only; (c) 1 and 3 only; (d) 1, 2 and 3 only",2012
133,d,Foreign Investment,"Option (d) is correct: Statements 1, 2, and 3 are correct regarding Foreign Direct Investment (FDI), which involves investments in Indian companies by persons resident outside India. Foreign Portfolio Investment (FPI), on the other hand, includes investments in capital instruments where the investment is less than 10 percent of the post-issue paid-up equity capital on a fully diluted basis of a listed Indian company."
134
134,"Consider the following statements: The price of any currency in international market is decided by the 1. World Bank 2. Demand for goods/services provided by the country concerned 3. Stability of the government of the concerned country 4. Economic potential of the country in question Which of the statements given above are correct?", "(a) 1, 2, 3, and 4; (b) 2 and 3 only; (c) 3 and 4 only; (d) 1 and 4 only",2012
134,b,Currency Value/IMF,"Option (b) is correct: Statements 2 and 3 are correct. Demand and supply factors influence the price of a currency, with demand affected by exports and investments, and the stability of the government being a significant factor. The World Bank does not directly influence the price of currencies, and the value of a currency on the international market is not indicative of the economic capacity of a nation."
135
135,"In terms of economy, the visit by foreign nationals to witness the XIX common Wealth Games in India amounted to:", "(a) Export; (b) Import; (c) Production; (d) Consumption",2011
135,a,International Trade,"Option (a) is correct: Exports involve goods and services produced in one country and used by another, leading to foreign nationals buying Indian goods and using Indian services, resulting in Indian companies earning foreign currency. Imports, on the other hand, are goods and services bought in one country and produced by another. Production refers to the manufacturing process, while consumption is the usage of manufactured goods."
136
136,"Consider the following actions which the government can take: 1. Devaluing the domestic currency. 2. Reduction in the export subsidy. 3. Adopting suitable policies which attract greater FDI and more funds from FIIs. Which of the above action(s) can help in reducing the current account deficit?", "(a) 1 and 2; (b) 2 and 3; (c) 3 only; (d) 1 and 3",2011
136,d,BoP,"Option (d) is correct: Statements 1 and 3 are correct. The government can reduce a substantial current account deficit by increasing exports, decreasing imports through import restrictions or duties, or by promoting an investor-friendly environment to attract capital inflows. Reduction in export subsidies might negatively impact exports, but promoting an investor-friendly environment can lead to capital inflows, thus reducing the current account deficit."
137
137,"Regarding the International Monetary Fund, which one of the following statements is correct?", "(a) It can grant loans to any country; (b) It can grant loans to only developed countries; (c) It grants loans to only member countries; (d) It can grant loans to the central bank of a country",2011
137,c,IMF,"Option (c) is correct: The International Monetary Fund (IMF) aims to reduce global poverty, encourage international trade, and promote financial stability and economic growth. It was created in 1945 and has 190 member countries, with representation on the board based on financial position. The IMF supports member nations experiencing balance of payments issues."
138
138,"Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?", "(a) FII helps bring better management skills and technology, while FDI only brings in capital; (b) FII helps in increasing capital availability in general, while FDI only targets specific sectors; (c) FDI flows only into the secondary market, while FII targets primary market; (d) FII is considered to be more stable than FDI",2011
138,b,Foreign Investment,"Option (b) is correct: Foreign Direct Investment (FDI) involves a parent firm making an investment in another nation, targeting the primary market and bringing management skills and technology. Foreign Institutional Investor (FII) involves investors investing in the markets of a foreign nation, targeting the secondary market and increasing capital availability."
139
139,"With reference to the Indian economy, what are the advantages of “Inflation-Indexed Bonds (IIBs)”? 1. Government can reduce the coupon rates on its borrowing by way of IIBs. 2. IIBs provide protection to the investors from uncertainty regarding inflation. 3. The interest received as well as capital gains on IIBs are not taxable. 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
139,a,Bonds and Securities,"Option (a) is correct: Statements 1 and 2 are correct regarding Inflation-Indexed Bonds (IIBs), which protect savings from inflation by offering positive real rates of returns linked to WPI/CPI. Statement 3 is incorrect as existing tax provisions apply to interest payment and capital gains on IIBs, without any special tax treatment."
140
140,"Which of the following activities constitute a real sector in the economy? 1. Farmers harvesting their crops 2. Textile mills converting raw cotton into fabrics 3. A commercial bank lending money to a trading company 4. A corporate body issuing Rupee Denominated Bonds overseas. Select the correct answer using the code given below.", "(a) 1 and 2 only; (b) 2, 3 and 4 only; (c) 1, 3 and 4 only; (d) 1, 2, 3 and 4",2022
140,a,Sectors of Economy,"Option (a) is correct: The real sector of an economy encompasses economic segments essential for GDP progress, such as farming and textile mills, which produce goods to satisfy global demand. The financial sector, which offers financial services, is distinct from the real sector."
141
141,"Indian Government Bond Yields are influenced by which of the following? 1. Actions of the United States Federal Reserve 2. Actions of the Reserve bank of India 3. Inflation and short-term interest rates 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",2021
141,Debt Instrument,d,"Bond yield is the return an investor gets on that bond or on a particular government security. It depends on the price of the bond which is impacted by its demand. The actions of the US federal reserve can impact the investments flowing in India. This will lead to a decrease in demand for Government Securities (G-sec) and thus impacting its yield. The actions of RBI directly impacts the bond yield because it is directly related to liquidity in the market which is controlled by RBI through various tools. The purchasing capacity of an economy is directly related to inflation. So any change in short term rates will impact the demand and price of G-sec and thereby influencing the yield."
142
142,"With reference to India, consider the following statements: 1. Retail investors through Demat account can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in the primary market. 2. The ‘Negotiated Dealing System-Order Matching’ is a government securities trading platform of the Reserve Bank of India. 3. ‘Central Depository Services Ltd’ is jointly promoted by the Reserve Bank of India and the Bombay Stock Exchange. Which of the statements given above is/are correct?", "(a) 1 only; (b) 1 and 2; (c) 3 only; (d) 2 and 3",2021
142,Debt Instrument,b,"Retail investors have multiple channels to invest in treasury bills (T-Bills) and Government bonds. It is mandatory to open a Demat account for a retail investor to invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in the primary market. The Negotiated Dealing System Order Matching is an electronic trading platform operated by the Reserve Bank of India to facilitate the issuing and exchange of government securities and other types of money market instruments. CDSL was promoted by BSE Ltd. jointly with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank and Union Bank of India."
143
143,"With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic?", "(a) It is the investment through capital instruments essentially in a listed company; (b) It is a largely non-debt creating capital flow; (c) It is an investment that involves debt-servicing; (d) It is the investment made by foreign institutional investors in the Government Securities",2020
143,Foreign Investment – FDI,b,"FDI is the investment through a capital instrument by a non-resident entity/person resident outside India in an unlisted Indian company, or 10% or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company. A non-debt creating capital flow is the one where there is no direct repayment obligation for the residents. FDI is largely a non-debt creating capital flow. Debt servicing is the regular repayment of interest and principal on a debt for a particular period. FDI has no link with this concept. The investment can be made in equities or equity linked instruments or debt instruments issued by the company. Thus, FDI isn’t directly associated with government securities."
144
144,"With reference to ‘Water Credit’, consider the following statements: 1. It puts microfinance tools to work in the water and sanitation sector. 2. It is a global initiative launched under the aegis of the World Health Organization and the World Bank. 3. It aims to enable poor people to meet their water needs without depending on subsidies. 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",2021
144,Water Conservation,c,"Water Credit is a powerful solution and the first to put microfinance tools to work in the water and sanitation sector. It helps bring small loans to those who need access to affordable financing and expert resources to make household water and toilet solutions a reality. Water Credit Initiative is a loan program started by water.org to address the barrier of affordable financing for safe water and sanitation."
145
145,"In a given year in India, official poverty lines are higher in some States than in others because:", "(a) Poverty rates vary from State to State; (b) Price levels vary from State to State; (c) Gross State Product varies from State to State; (d) Quality of public distribution varies from State to State",2019
145,Poverty,b,"Poverty Lines: Poverty is pronounced deprivation in well-being and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity - World Bank. Poverty lines would vary from State to State because of inter-state price differentials. According to the Planning Commission, the national poverty line for rural regions in 2011–12 was estimated to be Rs. 816 per capita per month in rural areas and Rs. 1,000 per capita per month in urban areas using the Tendulkar methodology. The population’s income distribution and the basis for consumer spending determine the poverty line. The poverty line is a function of the cost of the consumption basket which varies from state to state."
146
146,"Consider the following statements: Human capital formation as a concept is better explained in terms of a process which enables: 1. Individuals of a country to accumulate more capital. 2. Increasing the knowledge, skill levels and capacities of the people of the country. 3. Accumulation of tangible wealth. 4. Accumulation of intangible wealth. Which of the statements given above is/are correct?", "(a) 1 and 2; (b) 2 only; (c) 2 and 4; (d) 1, 3 and 4",2018
146,Human Capital,c,"As per RBI, Gross capital formation refers to the aggregate of gross additions to fixed assets (that is fixed capital formation) plus change in stocks during the counting period. OECD defines human capital as “the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services or ideas in market circumstances”. Human capital formation is the outcome of investments in education, health, on-the job training, migration and information. Tangible capital is also GCF as it involves largely infrastructural components. Intangible wealth of a nation comprises the skilled population, human resource base, culture, arts etc."
147
147,"Despite being a high saving economy, capital formation may not result in significant increase in output due to:", "(a) Weak administrative machinery; (b) Illiteracy; (c) High population density; (d) High capital-output ratio",2018
147,Capital Formation,d,"Capital formation entails building up a nation’s actual capital stock. In other words, capital creation entails creating new capital goods, such as factories, machinery, tools, materials, electricity, transport equipment, etc., all of which are used to produce goods in the future. Capital Output Ratio (COR): It serves as a measure for the proportional increase in capital formation needed to produce an increase in GDP. COR is a measure of capital required for producing one unit of output. If capital to output ratio is high, then capital formation may not result in a significant increase in the output."
148
148,"To obtain full benefits of the demographic dividend, what should India do?", "(a) Promoting skill development; (b) Introducing more social security schemes; (c) Reducing infant mortality rate; (d) Privatisation of higher education",2013
148,Demographic Dividend,a,"Skill development is needed to increase employability of the young population. Government has established ‘Skill India’ as a mission to skill India’s youth and the National Skill Development Corporation (NSDC) with the overall target of skilling/up skilling 500 million people in India by 2022. Social security schemes can be used for providing security to the nonworking population like old-age pensions etc. It will not provide any benefit of demographic dividend. Reducing Infant Mortality Rate is one of the Millennium Development Goals, but it does not provide any benefit of demographic dividend. Privatisation of Higher Education will have a negative effect as it will make education costlier thus making it out of reach of a large section of the eligible population."
149
149,"How does the National Rural Livelihood Mission seek to improve livelihood options of rural poor? 1. By setting up a large number of new manufacturing industries and agribusiness centres in rural areas. 2. By strengthening ‘self-help groups’ and providing skill development. 3. By supplying seeds, fertilisers, diesel pump-sets and micro-irrigation equipment free of cost to farmers. Select the correct answer using the codes given below:", "(a) 1 and 2 only; (b) 2 only; (c) 1 and 3 only; (d) 1, 2 and 3",2012
149,Government Schemes and Policies,b,"Deen Dayal Antyodaya Yojana – National Livelihoods Mission (NRLM): Launched by the Ministry of Rural Development (MoRD), Government of India in June 2011 as a restructured version of Swarna Jayanti Gram Swarozgar Yojna (SGSY). Aims to build strong institutional frameworks for the rural poor that will enable them to improve their access to financial services and raise household incomes through improvements to their sustainable means of subsistence. Objective is to Cover 7 crore rural poor families throughout 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats, and 6 lakh villages through self-managed Self-Help Groups (SHGs) and federal institutions, and assist them for livelihood collectives during an 8–10 year timeframe."
150
150,"With reference to the National Rural Health Mission, which of the following are the jobs of ‘ASHA’, a trained community health worker? 1. Accompanying women to the health facility for antenatal care check-up. 2. Using pregnancy test kits for early detection of pregnancy. 3. Providing information on nutrition and immunisation. 4. Conducting the delivery of a baby. Select the correct answer using the codes given below:", "(a) 1, 2 and 3 only; (b) 2 and 4 only; (c) 1 and 3 only; (d) 1, 2, 3 and 4",2012
150,Government Schemes and Policies,a,"ASHA will mobilise the community and facilitate them in accessing health and health related services such as providing immunization, Antenatal Check-up (ANC), Post Natal Check-up supplementary nutrition, etc. Empowered with knowledge and a drug-kit to deliver first-contact healthcare along with identifying and registering new pregnancies, births, and deaths. Delivery of a baby is being conducted by a professional medical practitioner not by ASHA worker. NOTE: By general understanding, we know that ASHAs are not paramedics and not trained in providing “delivery of a baby” as it is conducted by a professional medical practitioner. However, supporting health service delivery through home visits, first-aid and immunisation sessions are done by ASHA workers. With this information, we can eliminate option 4."
151
151,"The endeavour of ‘Janani Suraksha Yojana’ Programme is (2012)","1. To promote institutional deliveries. 2. To provide monetary assistance to the mother to meet the cost of delivery. 3. To provide for wage loss due to pregnancy and confinement.",2012
151,Government Schemes and Policies,a,"Janani Suraksha Yojana (JSY) is a safe motherhood intervention under the National Rural Health Mission (NRHM). The objective is to reduce maternal and neonatal mortality by promoting institutional delivery among the poor pregnant women. JSY is a 100 % centrally sponsored scheme and it integrates cash assistance with delivery and post-delivery care. To provide compensation for the wage loss in terms of cash incentives so that the woman can take adequate rest before and after delivery of the first living child comes under Pradhan Mantri Matru Vandana Yojana."
152
152,"Consider the following: (2012)","1. Hotels and restaurants 2. Motor transport undertakings 3. Newspaper establishments 4. Private medical institutions The employees of which of the above can have the ‘Social Security’ coverage under Employees’ State Insurance Scheme?","(a) 1, 2 and 3 only (b) 4 only (c) 1, 3 and 4 only (d) 1, 2, 3 and 4",2012
152,Government Schemes and Policies,d,"Employees State Insurance Scheme: The Employees’ State Insurance Act of 1948 is a piece of social security legislation that covers medical care and financial benefits in the events of sickness, maternity, disability, or worker death as a result of work-related injuries. The Act applies, in the first instance, to non-seasonal factories employing 10 or more persons. The provisions of the Act are being extended area wise by stages. An enabling clause in the Act gives the “appropriate government” the authority to apply the Act’s provisions to various types of institutions, including industrial, commercial, agricultural, and other types. In accordance with these provisions, the majority of State governments have expanded the application of the Act’s provisions to new classes of businesses, including shops, hotels, restaurants, cinemas, including preview theatres, road-motor transportation undertakings, and newspaper businesses with 20 or more employable workers."
153
153,"If the National Water Mission is properly and completely implemented, how will it impact the country? (2012)","1. Part of the water needs of urban areas will be met through recycling of waste-water. 2. The water requirements of coastal cities with inadequate alternative sources of water will be met by adopting appropriate technologies that allow for the use of ocean water. 3. All the rivers of Himalayan origin will be linked to the rivers of peninsular India. 4. The expenses incurred by farmers for digging bore-wells and for installing motors and pump-sets to draw ground-water will be completely reimbursed by the Government.","(a) 1 only (b) 1 and 2 only (c) 3 and 4 only (d) 1, 2, 3 and 4",2012
(b) Sub-Theme: Water conservation
Statements 1 and 2 are correct: National
Water Mission is one of the eight missions
launched under the National Action Plan
on Climate Change (NAPCC) for combating
the threats of global warming. The main
objective of NWM is “conservation of water,
minimising wastage and ensuring its more
equitable distribution both across and
within States through integrated water
resources development and management”.
It will seek to ensure that a considerable share
of the water needs of urban areas are met
through recycling of wastewater and ensuring
that the water requirements of coastal
cities with inadequate alternative sources
of water are met through adoption of new
and appropriate technologies such as low
temperature desalination technologies that
allow for the use of ocean water.
Statement 3 is incorrect: All the rivers of
Himalayan origin will be linked to the rivers
of peninsular India falling under Interlinking
of Rivers Programme, where linking different
surplus rivers of the country with deficient
rivers take place.
Statement 4 is incorrect: Reimbursement of
complete expenses on digging bore wells and
motors and pump installations sound absurd,
as the government would not encourage
something which will deplete the groundwater
further.
154
154,"How do District Rural Development Agencies (DRDAs) help in the reduction of rural poverty in India? (2012)","1. DRDAs act as Panchayati Raj Institutions in certain specified backward regions of the country. 2. DRDAs undertake area-specific scientific study of the causes of poverty and malnutrition and prepare detailed remedial measures. 3. DRDAs secure inter-sectoral and interdepartmental coordination and cooperation for effective implementation of anti-poverty programmes. 4. DRDAs watch over and ensure effective utilisation of the funds intended for anti-poverty programmes.","(a) 1, 2 and 3 only (b) 3 and 4 only (c) 4 only (d) 1, 2, 3 and 4",2012
(b) Sub-Theme: Poverty Alleviation/Rural
Development/Inclusive Growth
Statement 1 is incorrect: The DRDAs are
expected to coordinate effectively with the
Panchayati Raj Institutions (PRIs). Under no
circumstances will they perform the functions
of PRIs.
Statement 2 is incorrect: No such provisions
are there for DRDAs to undertake an areaspecific scientific study of the causes of poverty
and malnutrition and prepare detailed remedial
measures.
Statement 3 is correct: The role of the DRDA is
in terms of planning for effective implementation
220 UPSC Prelims PYQs
of anti-poverty programmes; coordinating
with other agencies- Governmental, nonGovernmental, technical and financial for
successful programme implementation; etc.
Statement 4 is correct: DRDA will watch over
and ensure effective utilisation of the funds
intended for anti-poverty programmes, it will
need to develop a far greater understanding of
the processes necessary for poverty alleviation/
eradication.
155
155,"India’s ranking in the ‘Ease of Doing Business Index’ is sometimes seen in the news. Which of the following has declared that ranking? (2016)","(a) Organization for Economic Cooperation and Development (OECD) (b) World Economic Forum (c) World Bank (d) World Trade Organization (WTO)",2016
155,Reports and Indexes/World Bank Reports,c,"Ease of Doing Business Index is published by the World Bank. It is an aggregate figure that includes different parameters which define the ease of doing business in a country. It is calculated by adding up the distance to frontier ratings of various economies. The “regulatory best practices” for conducting business serve as the basis for the distance to frontier score, which compares economies based on that parameter. The index for ease of doing business is calculated based on the following indicators: Construction permits, registration, obtaining financing, tax payment mechanisms, etc. Other Reports of World Bank: Remittance Report, Universal Health Coverage Index, The Service trade restriction index, Ease of Living Index, Global Economic Prospect (GEP) Report, World Development Report, Human Capital Index"
156
156,"In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight? (2015)","(a) Coal production (b) Electricity generation (c) Fertiliser production (d) Steel production",2015
156,Index of Industrial Production,b,"Index of Industrial Production (IIP): It details the growth of various sectors in an economy such as mining, electricity and manufacturing. The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period. It is compiled and published monthly by the Central Statistical Organisation (CSO) six weeks after the reference month ends. Eight Core Sectors: Comprising 40.27% of the weight of items included in the Index of Industrial Production (IIP). The eight core sector industries in decreasing order of their weightage: Refinery Products > Electricity > Steel > Coal > Crude Oil > Natural Gas > Cement > Fertilisers."
157
157,"Which of the following organisations brings out the publication known as ‘World Economic Outlook’? (2014)","(a) The International Monetary Fund (b) The United Nations Development Programme (c) The World Economic Forum (d) The World Bank",2014
157,IMF Reports,a,"The World Economic Outlook (WEO) is a report by the International Monetary Fund (IMF) that analyses key parts of the IMF’s surveillance of economic developments and policies in its member countries. The World Economic Outlook (WEO) presents the IMF’s analysis and projections of global economic developments and classifies their analysis by region and stage of economic development. The World Economic Outlook database is created during the bi-annual WEO exercise, which begins in January and June of each year and results in the April and September/October WEO publication. It is usually prepared twice a year and is used in meetings of the International Monetary and Financial Committee. Other Report published by IMF: Global Financial Stability Report"
158
158,"Disguised unemployment generally means (2013)","(a) Large number of people remain unemployed (b) Alternative employment is not available (c) Marginal productivity of labour is zero (d) Productivity of workers is low",2013
158,Unemployment,c,"Unemployment is a phenomenon that occurs when a person who is capable of working and is actively searching for work is unable to find work. The unemployment rate, which is calculated by dividing the number of jobless persons by the total labour force, is the most widely used indicator of unemployment. Disguised unemployment means that more people are engaged in a job which can be done with less people, normally seen in agriculture where the whole family is involved. It means extra people can be removed without affecting productivity, i.e., their marginal productivity is zero."
159
159,"The Multi-dimensional Poverty Index developed by ‘Oxford Poverty and Human Development’ initiative with UNDP support covers which of the following? (2012)","1. Deprivation of education, health, assets and services at household level. 2. Purchasing power parity at national level. 3. Extent of budget deficit and GDP growth rate at national level.","(a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3",2012
159. (a) Sub-Theme: Reports and Indices
z Global Multidimensional Poverty Index is a
key international resource that measures
acute multidimensional poverty across more
than 100 developing countries. It was first
launched in 2010 by the Oxford Poverty
and Human Development Initiative
(OPHI) and the Human Development
Report Office of the UNDP.
z Poverty is often defined by one-dimensional
measures usually based on income. But no
single indicator can capture the multiple
dimensions of poverty.
z Multidimensional poverty includes: poor
health, lack of education, inadequate living
standards, disempowerment, poor quality
of work, the threat of violence, and living in
areas that are environmentally hazardous,
among others.
160
160,"With reference to Convertible Bonds, consider the following statements: (2022)","1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest. 2. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices.","(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2",2022
160,Convertible Bond,c,"A convertible bond is a fixed-income corporate debt security that yields interest payments but can be converted into a predetermined number of common stock or equity shares. Convertible bonds generally offer a lower coupon rate or rate of return in exchange for the value of the option to convert the bond into common stock. Investors will generally accept a lower coupon rate on a convertible bond, compared with the coupon rate on an otherwise identical regular bond, because of its conversion feature. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices as equity prices can differ widely from the given interest and the difference in that can be used as a hedge for inflation."
161
161,"If a commodity is provided free to the public by the Government, then (2018)","(a) The opportunity cost is zero. (b) The opportunity cost is ignored. (c) The opportunity costs are transferred from the consumers of the product to the tax-paying public. (d) The opportunity cost is transferred from the consumers of the product to the Government.",2018
161,Opportunity Cost,c,"Opportunity cost represents the benefits an individual, investor, or business misses out on when choosing one alternative over another. If a commodity is provided free to the public by the Government, then the opportunity cost is transferred from the consumers of the product to the tax-paying public. As per microeconomics, the opportunity cost is zero for free goods such as air and common goods such as fish/grazing land. For public goods such as street lights and defence, the opportunity cost is involved (The government could have spent that much money on street lights rather than on the military). So, the opportunity cost is not zero. Opportunity cost is also called Economic cost."
162
162,"If the interest rate is decreased in an economy, it will: (2014)","(a) Decrease the consumption expenditure in the economy. (b) Increase the tax collection of the Government. (c) Increase the investment expenditure in the economy. (d) Increase the total savings in the economy.",2014
162,Money and Banking,c,"Relationship between investment and interest rates: The investment curve of the economy serves as another example of expenditure. A decrease in interest rates results in an increase in investment spending. Hence, if the interest rate is decreased in an economy, it will increase the investment expenditure in the economy. Decreased interest rates would ensure the availability of capital for investment expenditure."
163
163,"Economic growth in country X will necessarily have to occur if: (2013)","(a) There is technical progress in the world economy (b) There is population growth in X (c) There is capital formation in X (d) The volume of trade grows in the world economy",2013
163,Economic Growth and Development,c,"Capital Formation is defined as that part of a country’s current output and imports which is not consumed or exported during the accounting period but is set aside as an addition to its stock of capital goods. Capital formation in any country boosts its development as investment activities increase resulting in high production, increase in per-capita income, employment generation, the standard of living, poverty reduction. The increase in population has both pros and cons for the economy. If the population is skilled then it will generate more output for the economy. But in case if the economy itself is not in a position to stand still then in such case it will prove to be a burden to the country. The development of new and better technologies for the manufacture of goods and services is referred to as technical advancement. Despite having their advantages, when these technologies enter the market, it requires a heavy investment in training workers and sometimes these technologies replace human beings resulting in unemployment. The volume of trade may be favourable or non-favourable depending upon the overall trade surplus or deficit."
164
164,"The national income of a country for a given period is equal to the: (2013)","(a) Total value of goods and services produced by the nationals (b) Sum of total consumption and investment expenditure (c) Sum of personal income of all individuals (d) Money value of final goods and service produced",2013
164,National Income,d,"Option (d) is correct: The entire monetary/money value of the goods and services produced on a nation’s territory over the course of a certain amount of time is its national income. Thus, it is the result of every economic activity that takes place throughout the course of a year in every nation. The total amount of income that a nation accrues from all of its economic operations over the course of a year is, in a nutshell, its national income. It is also helpful in determining the progress of the country. It includes wages, interest, rent, profit, received by factors of production like labour, capital, land and entrepreneurship of a nation."
165
165,"The balance of payments of a country is a systematic record of: (2013)","(a) All import and export transactions of a country during a given period of time, normally a year (b) Goods exported from a country during a year (c) Economic transaction between the government of one country to another (d) Capital movements from one country to another",2013
165,BoP,a,"Option (a) is correct: The balance of payments (BoP) records the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time period typically a year. The balance of payments (BOP), also known as balance of international payments, summarises all transactions that a country’s individuals, companies, and government bodies complete with individuals, companies, and government bodies outside the country. These transactions consist of imports and exports of goods, services, and capital, as well as transfer payments, such as foreign aid and remittances."
166
166,"An increase in the Bank Rate generally indicates that the: (2013)","(a) Market rate of interest is likely to fall (b) Central Bank is no longer making loans to commercial banks (c) Central Bank is following an easy money policy (d) Central Bank is following a tight money policy",2013
166,Monetary Policy/Money and Banking,d,"Option (d) is correct: Bank rate refers to the rate at which the Reserve Bank of India (RBI) gives loans to banks. An increase in this rate means that RBI is following a tight monetary policy as an increase in rates will lead to decrease in money circulation leading to a decrease in inflation."
167
167,"In India, deficit financing is used for raising resources for: (2013)","(a) Economic development (b) Redemption of public debt (c) Adjusting the balance of payments (d) Reducing the foreign debt",2013
167,Budget,a,"Option (a) is correct: Deficit financing is the process of raising money to cover the deficit that is brought on by an excess of spending in comparison to income. By selling bonds or printing new money, the government is borrowing money from the people to close the shortfall. For developing countries like India, higher economic growth is a priority. A higher economic growth requires finances. With the private sector being shy of making huge expenditures, the responsibility of drawing financial resources rests on the government. Many times, neither tax nor non-tax revenues are able to raise enough money. Hence, the deficit is often funded through borrowings or printing new currency notes."
168
168,"Economic growth is usually coupled with: (2011)","(a) Deflation (b) Inflation (c) Stagflation (d) Hyperinflation",2011
168,Economic Growth/Inflation,b,"Option (b) is correct: Economic growth: Increased consumer disposable income as a result of economic growth raises both the total demand for goods as well as the quantity that is readily available to customers. This rise in demand leads to inflation, which finally becomes a necessary evil for a growing economy."
169
169,"The lowering of Bank Rate by the Reserve Bank of India leads to: (2011)","(a) More liquidity in the market (b) Less liquidity in the market (c) No change in the liquidity in the market (d) Mobilization of more deposits by commercial banks",2011
169,Money and Banking/Monetary Policy,a,"Option (a) is correct: Bank rate refers to the interest rate charged by the central bank (RBI) on loans granted to commercial banks. When Bank Rate is lowered by RBI, bank’s borrowing costs decrease (less interest) which in return, increases the supply of money in the market. It means more loans will be provided by banks, which will increase Liquidity in the market. On the other hand, an increase in this rate means that RBI is following a tight monetary policy as an increase in rates will lead to decrease in money circulation leading to a decrease in inflation."
170
170,"Which one of the following statements appropriately describes the “fiscal stimulus”? (2011)","(a) It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth (b) It is an intense affirmative action of the Government to boost economic activity in the country (c) It is Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation (d) It is an extreme affirmative action by the Government to pursue its policy of financial inclusion",2011
170,Inflation/Monetary Policy/Fiscal Policy/Money and Banking,b,"Option (b) is correct: A ‘stimulus’ is an attempt by policymakers of a country to kickstart a sluggish economy through a package of measures. The central bank will use a monetary stimulus to boost consumer spending by increasing the money supply or lowering interest rates. A fiscal stimulus is when the government increases spending out of its own funds or lowers tax rates. Consumer spending increases as a result of stimulus measures, which boosts demand and growth. It’s common to refer to a stimulus as “priming the pump” or “pump priming."
171
171,"A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”? (2011)","(a) It is the impact of drastic deficiency in supply due to failure of crops (b) It is the impact of the surge in demand due to rapid economic growth (c) It is the impact of the price levels of previous year on the calculation of inflation rate (d) None of the statements (a), (b) and (c) given above is correct in this context",2011
171,Inflation/Monetary Policy/Fiscal Policy/Money and Banking,c,"Option (c) is correct: Base Effect refers to the impact of an increase in the price level (i.e., previous year’s inflation) over the corresponding rise in price levels in the current year (i.e., current inflation). If the inflation rate was low in the corresponding period of the last year, then even a small increase in the price index will give a high rate of inflation in the current year."
172
172,"India is regarded as a country with a “Demographic Dividend”. This is due to: (2011)","(a) Its high population in the age group below 15 years (b) Its high population in the group of 15-64 years (c) Its high population in the age group above 65 years (d) Its high total population",2011
172,Demographic Dividend,b,"Demographic Dividend: According to United Nations Population Fund (UNFPA), demographic dividend means, “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older)”."
173
173,"A “closed economy” is an economy in which: (2011)","(a) The money supply is fully controlled (b) Deficit financing takes place (c) Only exports take place (d) Neither exports or imports take place",2011
173,Types of Economy,d,"Refer to table below: Closed Economy: Does not have economic relations with the rest of the world. Activities taking place outside the territory do not affect the economic activities. There is no difference b/w national income and domestic income. It is an imaginary economy. A closed economy is completely self-sufficient, which means that no imports enter and no exports leave the country. E.g.: Brazil imports the least amount of goods in the world when measured as a portion of the gross domestic product (GDP) and is the most closed economy in the world. Open Economy: An open economy has economic relations with other countries. Economic activities of such an economy are affected by international fluctuations. The size of national income may be greater or smaller than the domestic income. It is a realistic economy. E.g.: USA, Singapore, Finland, etc."
