Economics
262 solved Defence Economics previous year questions on Economics, each with the correct answer and a full explanation.
Q1
In India, Planning Commission was set up in year _______.
✓ Correct answer: c) 1950
ExplanationThe Planning Commission of India was established in 1950 by a resolution of the Government of India under the leadership of Prime Minister Jawaharlal Nehru.Its primary purpose was to promote a rapid rise in the standard of living of the Indian people by efficiently exploiting the country's resources, increasing production, and offering opportunities to all for employment in the service of the community.Hence, the correct answer is option C.
Q2
Which of the following is NOT a Maharatna company?
✓ Correct answer: b) Hindustan Copper Limited
ExplanationHindustan Copper Limited is not a Maharatna Company.Hindustan Copper Limited (HCL): HCL is a Schedule 'A' Miniratna Category - I Central Public Sector Enterprise.It operates under the administrative control of the Ministry of Mines, Government of India.Incorporated on 9th November 1967. Maharatna Status Eligibility Criteria: To qualify as a Maharatna CPSE, a company must meet one of the following criteria over three years: Average annual net profit of over Rs. 2,500 crore.Average annual turnover of Rs. 20,000 crore.Average annual net worth of Rs. 10,000 crore.Maharatna status grants certain benefits for investment decisions, including the authority to invest Rs. 1,000 crore - Rs. 5,000 crore in a project or up to 15% of their net worth in a project.Hence, the correct answer is option B.
Q3
The rate at which the Reserve Bank of India lends money to commercial banks is called
✓ Correct answer: c) Repo Rate
ExplanationThe rate at which the Reserve Bank of India (RBI) lends money to commercial banks is called the "Repo Rate." Repo stands for Repurchase Agreement.The Repo Rate is the interest rate at which the RBI provides short-term loans to commercial banks by purchasing government securities or other eligible securities from them.It is a crucial tool used by the central bank to regulate liquidity, inflation, and credit conditions in the economy.Hence, the correct answer is option (C).
Q4
In India, inflation is measured by
✓ Correct answer: b) Consumer price index
ExplanationIn India, inflation is primarily measured using two main indices: the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).Consumer Price Index (CPI) measures the average change over time in the prices paid by urban and rural consumers for a basket of goods and services, including food, housing, transportation, medical care, etc. CPI is calculated separately for various categories such as CPI for Industrial Workers (CPI-IW), CPI for Agricultural Labourers (CPI-AL), and CPI for Rural Labourers (CPI-RL), among others.Hence, the correct answer is option (B).
Q5
With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements: I. It is the flagship scheme of the Ministry of Labour and Employment. II. It was launched in the year 2014. III. Among other things, it will also impart training in soft skills, entrepreneurship, financial and digital literacy. IV. It aims to align the competencies of the unregulated workforce of the country to the National Skill Qualification Framework. Which of the statements given above is/are correct?
✓ Correct answer: b) III and IV only
ExplanationI) It is the flagship scheme of the Ministry of Labour and Employment.This statement is incorrect. - The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is not a scheme under the Ministry of Labour and Employment.Instead, it is the flagship scheme of the Ministry of Skill Development and Entrepreneurship (MSDE).II) It was launched in the year 2014, This statement is incorrect. - The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) was indeed launched on 16th July,2015. III) Among other things, it will also impart training in soft skills, entrepreneurship, financial and digital literacy.This statement is generally correct. - PMKVY aims to provide skill training in various domains, including soft skills, entrepreneurship, financial literacy, and digital skills, among others.IV) It aims to align the competencies of the unregulated workforce of the country to the National Skill Qualification Framework.This statement is generally correct. - The primary aim of PMKVY is to provide skill training and certification that aligns with the National Skill Qualification Framework (NSQF) to enhance the employability of the workforce.Hence, the correct answer is option (B).
Q6
With reference to the PM CARES Fund, consider the following statements: I. The amount collected by it directly goes to the Consolidated Fund of India. II. It can avail donations from the foreign contribution and donations to fund can also avail 100% tax exemption. Which of the above statements is/are correct?
✓ Correct answer: b) II only
ExplanationPM CARES Fund – Under the chairmanship of Prime Minister Narendra Modi, the Prime Minister’s Citizen Assistance and Relief in Emergency Situation Fund was created on March 28th, 2020. The Prime Minister’s Citizen Assistance and Relief in Emergency | | Defence Situations Fund popularly known as PM- CARES Fund has been established by the government to address any emergency or distress scenario, including the COVID- 19 pandemic.This Fund was established as a result of several demands from the public to assist the administration in the wake of the COVID-19 emergency.Candidates can know detailed information about the PM CARES Fund on the Official Website (pmindia.gov.in).PM CARES fund is covered under the PM Schemes which is an important static GK topic with regards to UPSC or any other competitive examination.About PM CARES Fund: With the Prime Minister serving as its Chairman, the Fund is a public charitable trust.The ministers of defence, home affairs, and finance are additional members.As a result of the Fund’s ability to accept micro-donations, many people will be able to make donations in even the smallest amounts.The Fund will enhance capabilities for disaster management and promote research on citizen protection.Objectives of PM CARES Fund: To undertake and support relief or assistance of any kind relating to a public health emergency or any other kind of emergency, calamity or distress, either man-made or natural, including the creation or upkeep of healthcare or pharmaceutical facilities, other necessary infrastructure, funding relevant research or any other type of support.To render financial assistance, provide grants of payments of money or take such other steps as may be deemed necessary by the Board of Trustees to the affected population.To undertake any other activity, which is not inconsistent with the above Objects.Hence, the correct answer is option (B).
Q7
The Mid-Day Meal scheme comes under the purview of which ministry?
✓ Correct answer: d) Ministry of Education
ExplanationThe Mid-Day Meal scheme is a school meal program designed to improve the nutritional status of school children and encourage school attendance.It falls under the Ministry of Education (formerly known as the Ministry of Human Resource Development) in India.The scheme aims to provide cooked meals to children in government schools and government-aided schools across the country, with the objective of boosting school attendance, retention, and the overall health and nutrition of students.The Mid-Day Meal Scheme in India was indeed started on August 15, 1995, but it was initially known as the 'National Programme of Nutritional Support to Primary Education.' This program was later renamed and expanded into what is now commonly referred to as the Mid-Day Meal Scheme.Hence, the correct answer is option (D).
Q8
"Global Competitiveness Report" is released by which of the following organization?
✓ Correct answer: b) WEF
ExplanationWEF stands for the World Economic Forum.The World Economic Forum is an international organization that brings together leaders from various sectors, including business, government, academia, and civil society, to engage in discussions and collaborations aimed at | | Defence addressing global challenges and shaping economic agendas.Key aspects of the World Economic Forum include:1. Annual Meeting: The WEF is best known for its annual meeting in Davos, Switzerland, where leaders gather to discuss and deliberate on pressing global issues.The meeting provides a platform for dialogue and collaboration across different sectors.2. Reports and Research: The WEF conducts research and publishes reports on a wide range of topics, including global competitiveness, technology, sustainability, and more.These reports often provide insights into key trends and challenges facing the world.3. Global Initiatives: The WEF initiates and supports global projects and initiatives aimed at finding solutions to complex issues.These initiatives often involve public-private partnerships and collaboration between various stakeholders.4. Public-Private Cooperation: The organization emphasizes the importance of public-private cooperation in addressing global challenges.It seeks to foster dialogue and collaboration between governments, businesses, and other stakeholders to achieve positive societal impact.Hence, the correct answer is option (B).
Q9
Which of the following are commercial banks assets?
✓ Correct answer: b) Loans
ExplanationA bank can have different types of assets, including physical assets, such as equipment and land; loans, including interest from consumer and business loans; reserves, or holdings of deposits of the central bank and vault cash; and investments, or securities.Hence, the correct answer is option (B).
Q10
Which of the following is an example of Mixed Economy?
✓ Correct answer: c) Public and Private Sector
ExplanationThe coexistence of both public and private sectors within an economy is a characteristic of a mixed economy.So, "Public & Private Sector" would indeed be an example of a mixed economy.A mixed economy features a combination of both public (government) and private sector enterprises, allowing for both state intervention and free- market principles, aiming to balance economic efficiency with social welfare.Hence, the correct answer is option (C).
Q11
Gross Domestic Product (GDP) is based on which of the following factors?
✓ Correct answer: d) All of the above
ExplanationNational Income: GDP is a key component of calculating national income, as it represents the total value of goods and services produced within a country's borders.Per Capita Income: While not directly defining GDP, dividing the total GDP by the population gives you the per capita income, which is often used to compare living standards across countries.Purchasing Power Parity (PPP): When comparing GDP between countries, PPP is often used to adjust for differences in the cost of living, providing a more accurate picture of relative economic output.While GDP is primarily calculated based on the total value of goods and services produced within a country, it is interconnected with concepts like national income, per capita income, and purchasing power parity, making all of these factors relevant to understanding GDP.Hence, the correct answer is option (D).
Q12
As of February 2025, what was the reverse repo rate in India, which is set by the Reserve Bank of India (RBI) to regulate liquidity in the economy?
✓ Correct answer: b) 3.35%
ExplanationAs of the RBI's February 7, 2025, policy announcement, the reverse repo rate in India remained unchanged at 3.35%.In detail: What is the reverse repo rate?The reverse repo rate is the interest rate at which the RBI borrows money from commercial banks by holding the government securities as collateral.Why is it important?The Reserve Bank of India (RBI) uses the reverse repo rate as a tool to manage liquidity in the financial system and regulate the flow of money in the economy.Recent Changes: The Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points to 6.25% on February 7, 2025. However, the reverse repo rate remained unchanged at 3.35%.Other policy rates: Repo Rate: 6.25% Bank Rate: 6.50% Marginal Standing Facility (MSF) Rate: 6.50% Standing Deposit Facility (SDF) Rate: 6.00% Hence, the correct answer is option (B).
Q13
Which of the following are considered legal tender in India?1. Bank notes2. Coins3. Cheques4. e-Rupee5. Bitcoins Select the correct answer using the codes given below:
✓ Correct answer: b) 1, 2, and 4 only
ExplanationIn India, bank notes, coins, and the e-Rupee (Central Bank Digital Currency - CBDC) are considered legal tender.Cheques are not legal tender as they are a negotiable instrument requiring acceptance.Bitcoins and other cryptocurrencies are not recognized as legal tender in India.Hence the correct answer is option B
Q14
Which is the first state in India to impose an agriculture tax?
✓ Correct answer: b) Bihar
ExplanationBihar was the first state in India to impose an agricultural tax.This tax was introduced to generate revenue from agricultural produce, given that agriculture is a significant part of the state's economy.Hence, the correct answer is option (B).
Q15
What is meant by 'Sex Ratio'?
✓ Correct answer: b) Number of females per 1000 males
ExplanationSex ratio is defined as the number of females per 1000 males in a given population.In a society that has males and females equal in number, the sex ratio is 1:1 or 1000 females for every 1000 males.This ratio is an important indicator of gender balance in population.Historically there were more females than males in most countries of the world.This phenomena occurred due to two reasons: i) Girl babies enjoy better immune system and resistant to diseases in comparison of male child. ii) Females live longer than males in most of the societies.Hence, the correct answer is Option B i.e Number of females per 1000 males.
Q16
Which one of the following is not a part of the service sector in India?
✓ Correct answer: b) Construction
ExplanationKey Points- Construction is a part of the manufacturing sector and not the service sector.Explanation- Construction is a part of the manufacturing sector, which is a sector which derives its raw materials from the primary sector.Various raw materials such as limestone, sandstone, cement, plaster etc are derived from the primary sector.Transport, hotels and restaurants and insurance are part of the service sector, which produces services rather than goods.Hence, options a, c and d are incorrect.Hence the correct option is ‘B’ i.e Construction.
Q17
Rise in the price of a commodity means
✓ Correct answer: d) Fall in the value of currency and rise in the value of commodity
ExplanationKey concept:- Inflation-Inflation refers to the increase in the price of most goods and services that are routinely or commonly used.Food, clothing, housing, recreation, transportation, essentials, etc. Inflation measures the change in the average price of a basket of goods and services over time.Explanation:- As the demand for goods and services increases, the prices of goods and services increase, and raw materials are used to produce those goods and services.As the demand for a product increases, so does the price of the product.Hence, the correct answer is Option D i.e., fall in the value of currency and rise in the value of commodity
Q18
What is meant by 'Public Good'?
✓ Correct answer: b) A commodity whose benefits are indivisibly spread among the entire community.
ExplanationKey Points- Public good are the type of goods whose benefits are spread among the entire community and are provided free of cost by the government.Explanation- Public goods are provided by the government free of cost for the welfare of the public at large.These goods are also called collective or social goods.People cannot be stopped from using them just because they failed to pay for them, i.e, these goods are both are non- excludable and non-rivalrous.Hence the correct option is ‘b’ i.e, a commodity whose benefits are indivisibly spread among the entire community.
Q19
Which one of the following statements is incorrect?
✓ Correct answer: b) India meets more than 50 per cent of its defence equipment through imports.
ExplanationKey Concept: India tops the list of the largest buyer or importers of weapons / defence equipment by accounting for approximately 11 percent of the Global Market.Explanation: In recent researches, the biggest defense equipments exporter to India was France, which 36 percent of the year's total defense import.Russia followed closely by exporting around 35 percent of the Year total defense import.Hence, the correct option is Option (B) i.e, India meets more than 50 per cent of its defence equipment through imports.Additional Information: After India, Saudi Arabia follows closely in the list of largest importers of arms by accounting for 11 percent market share from 2017 to 2022.
Q20
Which of the following phrases were used in the theme of the Twelfth Five-Year Plan (2012- 17)?1. Inclusive2. Faster3. More inclusive4. Sustainable5. More sustainable Select the correct answer using the codes given below:
✓ Correct answer: c) 2, 3 and 4
ExplanationExplanation Planning Commission It was established on March 15, 1950 and was chaired by Prime Minister Jawaharlal Nehru.The Planning Commission of India was an organization of the Government of India which, among other things, formulated India's five-year plans(there were 12 Five Years Plans till 2014).The Planning Commission was charged with serving all community service employment opportunities.The Planning Commission did not derive its origin from either the Constitution or the Statute but it was formed through Cabinet’s decision.Its objective was to promote a rapid rise in the standard of living of Indians by productively utilizing the country's resources, increasing production and providing opportunities for everyone for employment in the service of society.Slogan for 12th Five Year Plan "Faster, Sustainable, and More Inclusive Growth." It was replaced by NITI Aayog, a more robust organization, on 1 January 2015. It is more of a think tank that works with stakeholders to develop the country.Hence, the correct answer C, i.e 2, 3 and 4
Q21
Which of the following statements about the New Development Bank is/are correct?1. The Headquarters of the Bank is situated in Moscow, Russia.2. K. V. Kamath was the first President of the Bank. Select the correct answer using the code given below.
✓ Correct answer: b) 2 only
ExplanationKey Concept: The headquarters of the New Development Bank BRICS are located in Shanghai, China.Explanation: The headquarters of NBD was officially inaugurated on the 9th of December 2004 in Shanghai, China Mr. K.V. Kamath from India was the first President of the New Development Bank.He served the bank from 2015 to 2020. Overview: Formation: Established at the 6th BRICS Summit in Fortaleza, Brazil, 2014 Headquarters: Shanghai, China Observer Status: Received in the United Nations General Assembly in 2018 Objectives: Foster development in member countries Support economic growth Promote competitiveness and job creation Build a knowledge-sharing platform among developing countries Support public and private projects through loans, guarantees, equity participation, and other financial instruments Recent Proposal: India's Proposal: Expand NDB’s scope to include strengthening social infrastructure (e.g., healthcare, education, housing) alongside promoting industry Major Projects Funded in India: Mumbai Metro Rail Delhi-Ghaziabad-Meerut Regional Rapid Transit System Various Renewable Energy Projects Total Approved Projects: 14 projects amounting to nearly USD 4.2 billion Recent Developments: 2020 Loan Pact: India secured a USD 1 billion loan from NDB to boost rural employment and infrastructure Hence, the correct answer is Option (B).
Q22
Which of the following statements in the context of income-environment relationship is/are correct?1. Pollution trends tend to follow an inverse-U shaped relationship across different stages of economic development.2. In the beginning stage, pollution increases due to urbanization and industrialization.3. In the later stage, pollution declines due to structural changes towards services sector. Select the correct answer using the code given below.
✓ Correct answer: c) 1,2 and 3
ExplanationKey Points- As there is a structural change in society towards the service sector, the level of pollution caused keeps declining.Explanation- In the early stage of economic development, forests are converted into manufacturing hubs which leads to high environmental degradation and pollution.Service sector causes less pollution than other sectors, thus after the structural change towards the service sector, there is a decline in the level of pollution.Hence the correct option is Option C i.e. 1,2 and 3.
Q23
Which of the following statements is not true?
✓ Correct answer: c) The Most Favoured Nation principle under GATT provided that preferential trading agreements reached with one country should be extended to other countries.
ExplanationGeneral Agreement on Tariffs and Trade (GATT) and World Trade Organisation(WTO): The General Agreement on Tariffs and Trade (GATT) was signed by 23 countries in October 1947 after World War II and entered into force on January 1, 1948. The purpose of the GATT was to facilitate international trade.The GATT was held eight times in total from April 1947 to December 1993, each with great success and results.In 1995, the GATT was merged into the World Trade Organization (WTO) and the WTO was enlarged.All signatory members of the GATT should be treated equally with all other members.This is known as Most Favored Nation and has carried over to the WTO.The practical result of this is that when a country negotiates a tariff reduction with another country (usually a major trading partner), the same reduction automatically applies to all GATT signatories.The Agreement on Agriculture (AoA), a WTO treaty negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), was formally ratified in 1994 in Marrakech, Morocco.It came into effect in 1995. Preferential Trade Agreement (PTA) term used in the WTO for preferential trade such as: reduced or zero tariffs that Member States can unilaterally offer to their trading partners.This includes the Generalized System of Preferences, under which developed countries grant preferential tariffs on imports from developing countries. | | Defence It includes non-reciprocal schemes granted by the General Council.Member States are therefore exempt from the application of the Most Favored Nation (MFN).Hence, the correct answer is option (C).
Q24
Under flexible exchange rate system, the exchange rate is determined:
✓ Correct answer: a) Predominantly by market mechanism
ExplanationKey Points- Flexible exchange rate system is a type of exchange system where the exchange rate is predominantly on demand and supply of money in the market.Explanation- In a flexible exchange rate system, as per the changes in demand and supply of foreign exchange, the currency is allowed to fluctuate freely.There is no involvement of the central bank in this system and neither is there any need of maintaining foreign reserves.Appreciation and Depreciation of currency take place in this type of exchange system.Hence the correct option is Option A i.e. predominantly by market mechanism.
Q25
Which one of the following is an example of a 'natural monopoly'?
✓ Correct answer: b) Delhi Jal Board
ExplanationKey Points- Delhi Jal Board is an example of natural monopoly and it is the most efficient provider in its industry.Explanation- Natural Monopoly is a type of monopoly where a single company is capable of providing a product or service at a cost which is lower as compared to its competitor in the industry.It arises due to natural market forces.Examples include industries related to electricity and water services.Hence the correct option is Option B i.e. Delhi Jal Board.
Q26
In view of the fact that kerosene is an inferior good in India, what is/are its implication(s)?1. As households get richer, they consume less kerosene.2. Over time there is a decline in quality of kerosene.3. Government needs to stop subsidies on kerosene. Select the correct answer using the code given below.
✓ Correct answer: a) 1 only
ExplanationKey Points- Inferior goods refer to those type of goods whose demand decreases with increase in income of households.Explanation- Since kerosene is an inferior good, its demand will decrease with the rise of income of households.With the rise in income of households, they can afford other costlier alternatives in place of inferior goods.Thus,Statement 1 is correct.Statements 2 and 3 are incorrect as there is not necessarily a decline of quality of inferior goods after a period of time.Hence the correct answer is Option A i.e 1 only is the correct answer.
Q27
Which of the following factors led to a decline in inflation rate in India during 2014-2015?1. Persistent decline in crude oil prices.2. Softness in global prices of tradables such as edible oils and coal.3. Tight monetary policy pursued by the Reserve Bank of India. Select the correct answer using the code given below.
✓ Correct answer: d) 1,2 and 3
ExplanationKey Points- Persistent decline in crude prices, Softness in global prices of tradables such as edible oils and coal and Tight monetary policy pursued by the RBI are the main factors which led to the decline in inflation rate in India during 2014- 2015. Explanation- Inflation refers to the general increase in prices of goods and services in an economy.Decline in prices of crude oil, edible oil and coal led to control of inflation.RBI through its monetary policy reduced bank rate, CRR and SLR which led to decline of money flow and thus decline of inflation.Hence the correct option is Option D i.e. 1,2 and 3.
Q28
Private investment in Indian agriculture is mostly on labour-saving mechanization. This could be a response to
✓ Correct answer: c) Rising wages and tighter labour market
ExplanationKey Points- Private investment in agriculture is mostly on labour- saving mechanization due to rising wages of labour and tighter labour market.Explanation- People from rural areas are migrating to cities for better opportunities.This has led to the scarcity of labour.The scarcity of labour has, in turn, led to increasing wages of labour.Hence the correct option is ‘C’ i.e rising wages and tighter labour market.
Q29
Which one of the following represents a progressive tax structure?
✓ Correct answer: b) Tax rate increases as income increases.
ExplanationKey Points- A progressive tax structure is a type of taxing mechanism wherein the tax increases as the income increases.Explanation- The taxing authority in this type of mechanism increases the taxes charged from people as their income increases.High income earners pay more taxes as compared to low income earners in this type of system.This structure is based on the concept of ability to pay.India follows this type of system.Hence, the correct answer is Option B.
Q30
Inclusion strategy does not focus on:
✓ Correct answer: d) Getting poorer countries closer
ExplanationKey point: Inclusion strategy provides equal access to opportunities and resources for people under marginalized,excluded or deprived sections.Explanation: Inclusion strategy aims to reduce inequality and poverty,diversifying livelihood for tribal population etc.Irrespective of their caste, gender,place of birth and family background.Hence, the correct option is (d).
Q31
Demand for a commodity refers to
✓ Correct answer: d) Quantity demanded at certain price during any particular period of time.
ExplanationExplanation Demand of a Commodity Demand for a commodity refers to the quantity of a commodity demanded at a given price and a particular time.Demand for a commodity is the quantity that a consumer can and wants to buy at various prices in a given period of time.Supply of a Commodity The quantity of goods that can be sold at a given price per unit of time.Supply is a flow variable.The supply of goods therefore refers to the quantity of goods sold at a certain price per unit of time.Hence, the correct answer is option D, i.e. Quantity demanded at certain price during any particular period of time.
Q32
Which one of the following is not an example of externalities?
✓ Correct answer: d) Increase in land price of adjacent plots due to construction of a road by the Government
ExplanationKey Points- Externalities occur when production or consumption of a good or service impacts a third party who is not directly related to the production or consumption of that specific good or service.Explanation- The externalities can be both positive or negative.Pollution and smoke are both examples of negative externalities as person causing these do not take into account the indirect costs of those harmed.Hence the correct option is Option D i.e. Increase in land price of adjacent plots due to construction of a road by the Government.
Q33
When two goods are completely interchangeable, they are
✓ Correct answer: a) Perfect substitutes
ExplanationKey concept:- Substitute goods: Substitutes are products that can replace each other in whole or in part.Explanation:- A good that can be used in place of another good that has exactly the same function is said to be a perfect substitute for the other good.In the case of such products, if the price of the product rises, the demand for replacement will increase.For example, if someone gets the same satisfaction and benefits from tea or coffee and can substitute for each other, the two are perfect substitutes.Hence, the correct answer is Option i.e., Perfect substitutes
Q34
Which of the following statements with regard to the proposed Asian Infrastructure Investment Bank is/are correct?1. India is one of the founding members of the Bank.2. The Bank is to be headquartered in Shanghai. Select the correct answer using the code given below :
✓ Correct answer: a) 1 only
ExplanationKey Points- Asian Infrastructure Investment Bank is a multilateral development bank, Its aim is to improve the economic and social outcomes in Asia.Explanation- India has a shareholding of 7.6% in the bank which is second largest after China.Thus, statement one is correct.The Bank is headquartered in Beijing.Thus, statement 2 is incorrect.Hence the correct option is ‘A’ i.e. 1 only.
Q35
Which one of the following statements with regard to India's economy between 1814 to 1860 is not correct?
✓ Correct answer: a) Between 1814 and 1850 , four commodities dominated India's exports-raw silk, opium, cotton and indigo.
ExplanationKey Points- Raw silk, opium, cotton and indigo were the four main commodities that dominated India’s exports between 1814 and 1850. Explanation- First Jute mill of India was established in Calcutta in 1855. Thus, it cannot be a dominating commodity of India between 1814 and 1850. Thus, option b is incorrect.Indigo and raw silk neither required processing techniques and were neither financed by foreign capital.Thus options c and d are incorrect.Hence the correct option is Option A i.e. Between 1814 and 1850 , four commodities dominated India's exports-raw silk, opium, cotton and indigo.
Q36
Shishu, Kishor and Tarun are the schemes of :
✓ Correct answer: b) Micro Units Development & Refinance Agency Ltd. (MUDRA).
ExplanationKey point: Pradhan Mantri MUDRA Yojana (PMMY) Shishu: covers loans upto 50,000/-.Kishor: covers loans above 50,000/- and upto 5 lakh.Tarun: covers loans above 5 lakh and upto 10 lakh Explanation: It was introduced by the government in 2015 for giving loans up to Rs. Ten lakh to the non-corporate and non-farm micro- enterprises.MUDRA stands for Micro Units Development & Refinance Agency Limited is a financial institution set up by Government.Hence, the correct option is Option (B) i.e, Micro Units Development & Refinance Agency Ltd. (MUDRA).
Q37
In India, the term 'hot money' is used to refer to:
✓ Correct answer: d) Foreign Portfolio Investment
ExplanationKey Concept: Hot money is a term used to describe funds which are involved in managing shareholders looking for quick profits.Explanation: An entity located in a different country makes an investment in the form of a controlling ownership stake in a company in another country.Investments made by foreigners in a country's stock or bond markets or through bank deposits are referred to as foreign portfolio investments.The securities or enterprises in FPI are not directly under the investor's control.Typically, FPI is used to refer to hot money.Hence, the correct answer is option (D) i.e, Foreign Portfolio Investment Additional Information: Throughout troubled times, these enormous portfolio transfers may worsen current financial issues.
Q38
Which of the following is/are example(s) of 'Near Money'? 1 Treasury Bill 2 Credit Card 3 Savings accounts and small time deposits 4 Retail money market mutual funds Select the correct answer using the code given below :
✓ Correct answer: d) 1,3 and 4
ExplanationKey Concept: Treasury bill, saving accounts and small time deposits, and retail money market mutual funds are the examples of near money.A credit card allows a user to make a purchase without having to make the payment right away.Explanation: Near Money refers to highly liquid assets that aren't actual money but can be quickly changed into it.Treasury Bills: Treasury Bills is a short-term borrowing tool.T-Bills are issued at a discount to face value; however, upon maturity, the holder receives the face value.Saving accounts and small time deposits: Individuals make deposits into savings accounts and small time deposits in order to save money and earn interest.Retail Money Market Mutual Funds: These are used to temporarily deposit funds.Treasury bills, short-term debt, tax-free bonds, and other securities are included in the money market funds' investment portfolio.Hence, the correct option is Option (D) i.e, 1,3 and 4 only
Q39
Who among the following is the Chairman of the Fourteenth Finance Commission?
✓ Correct answer: c) Y. V. Reddy
ExplanationKey Concept: Finance Commission is a constitutional body that is setup under article 280 of the Constitution by the President of India.The body is mandated to define differential relations between the center and the state governments.Explanation: The 14th finance commission was constituted on 2nd January 2013 to make recommendations for a period of 5 years from 2015 to 2020. Former Governor of the Reserve Bank of India, Y.V. Reddy was the chairman of the commission.Hence, the correct answer is Option C i.e, Y V Reddy Additional Information: Other members of the 14th finance commission were M. Govinda Rao, Abhijeet Sen, Sushma Nath, AN Jha and Sudipto Mundle.
Q40
Which of the following statements are correct ?1. Ability to pay principle of taxation holds that the amount of taxes people pay should relate to their income or wealth.2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes.3. A progressive tax takes a larger share of tax from poor families than it does from rich families.4. Indirect taxes have the advantage of being cheaper and easier to collect. Select the correct answer using the code given below :
✓ Correct answer: c) 1,2 and 4 only
ExplanationKey Concept: Taxes are a required financial burden placed on taxpayers by the government in order to collectively cover public expenses.Explanation: The principle of "ability to pay" believed that those who can pay more taxes should pay more, as measured by their income and wealth.Benefit-based taxation is based on the idea that those who gain more from government spending or expenditures should pay more taxes than those who do not.Indirect taxes are usually levied on the manufacturer or supplier and passes the tax on to the consumer.Indirect taxes are less burdensome for taxpayers and are convenient because they are only paid at the time of purchase.They are cheap and easy to collect.Hence, the correct option is Option C i.e, 1,2 and 4 only Additional Information: Progressive tax: Very few income earners are subject to a lower tax rate, and more income earners are subject to a higher tax rate.As a result, the average tax rate rises as the taxable amount does.Thus, option 3 is incorrect.
Q41
Which of the following statement(s) is/are false ?1. Wage Boards are tripartite in nature, with representatives from workers, employers and independent members.2. Except for the Wage Boards for Journalists and Non-Journalists, all the other wage boards are statutory in nature.3. Second National Commission on Labour has recommended against the utility of wage boards. Select the correct answer using the code given below :
✓ Correct answer: b) 2 only
ExplanationKey Concept: The Wage Boards consist of members who are representatives of workers, employers, and independent members who finalize the recommendations.Journalists and non-journalists news agencies employees have a statutory Wage Board and all the other Wage Boards are non-statutory in nature.Explanation: Wage Boards in India consist of representatives from all three - industry, trade unions and the Government.This way determining the wages of the workers in different categories is easily and correctly done.The board finalizes and rechecks the different parts of wages like HRA, DA, Basic Pay, etc. Hence, the correct option is Option b i.e, 2 only Additional Information: The Second Commission advised that there should be no need for any wage board for finalizing wages for employees or workers in any industry.It said that each state or union territory should have the jurisdiction to fix minimum wages.
Q42
Capital deepening refers to
✓ Correct answer: a) Going for more fixed capital per worker
ExplanationKey Concept: Capital Deepening refers to the rise within the ratio of the capital stock to labour hours (worked).It can also be defined as the circumstance when the economy is experiencing an increase in investment per worker.Explanation: A rise in capacity utilization is another term for this.The variation in invested capital every labour hour is frequently used to gauge capital deepening.The investment required to generate one production unit is known as the capital output ratio.Hence, the correct answer is option (A) i.e, going for more fixed capital per worker Additional Information: With advancements in technology (like a quicker copier) which allow greater productivity per worker, capital deepening often boosts production.In other words, capital deepening raises work efficiency.
Q43
Which one of the following is not among the aims of the Second Five-Year Plan?
✓ Correct answer: c) Achieve self-sufficiency in food grains and increase agricultural production to meet the requirements of industry and exports
ExplanationExplanation Planning Commission It was established on March 15, 1950 and was chaired by Prime Minister Jawaharlal Nehru.The Planning Commission of India was an organization of the Government of India which, among other things, formulated India's five-year plans(there were 12 Five Years Plans till 2014).The second five-year plan followed the Mahalanobis model.The heart of this model followed the pattern of industrial investment shifting towards building a domestic consumer goods sector.The main goal of the Second Five-Year Plan was rapid industrialization and increased productivity through technological modernization.Improving living standards through a significant increase in national income Creating social and economic justice and increasing employment The Planning Commission did not derive its origin from either the Constitution or the Statute but it was formed through Cabinet’s decision.It was replaced by NITI Aayog, a more robust organization, on 1 January 2015. It is more of a think tank that works with stakeholders to develop the country.Hence, the correct answer is option C, i.e. Achieve self-sufficiency in food grains and increase agricultural production to meet the requirements of industry and exports
Q44
According to the Classical Theory of Employment, deviations from the state of full employment are
✓ Correct answer: a) Purely temporary in nature.
ExplanationKey Concept: As per the statement by Classical Economists, the state of unemployment, if occurred, will be a temporary or abnormal condition in the economy and it will occur due to the government's interference into the natural mechanism of the market.Explanation: According to classical economics, over production is a common condition in the economy hence the condition of unemployment does not occur generally.The Classical theory of unemployment is based on the assumptions of interest, prices and flexible wages so, it is clear that interest rates, prices and wages keep changing according to the change in demand and supply.Hence, the correct option is Option (A) i.e, purely temporary in nature
Q45
Which of the following is/are the example(s) of Transfer Payment(s)? 1 Unemployment Allowance 2 Payment of Salary 3 Social Security Payments 4 Old age Pension Select the correct answer using the code given below :
✓ Correct answer: c) 1,3 and 4 only
ExplanationKey Concept: A few examples of transfer payments are subsidy, social student grants, social security payments, unemployment allowance and payments made to individuals by the government through any social welfare program.Explanation: Transfer payment is defined as a kind of one way payment which does not involve any kind of transfer of goods or services in it.Unemployment allowance, social security payments and old age payments do not require any kind of exchange of goods or services.Hence, the correct option is Option C i.e, 1,3 and 4 only Additional information: Payment of salary is done after the individual provides a kind of service to the institution, that's why it is not a type of transfer payment.A few old age pension programs by the Government are: National pension scheme, Atal Pension Yojana.
Q46
Which one of the following statements is correct with respect to the composition of national income in India?
✓ Correct answer: b) The share of the services sector has increased sharply.
ExplanationKey Concept: National income, which includes wages, bonuses, earnings, lease, or tax, is the aggregate of all the earnings that accrue to a nation's population over a given time period.Explanation: India's major industry is the services sector.It makes up 54.40% of India's overall Gross Value Added (2014).The services sector's contribution to the GDP rose from 28.5 percent in 1950–1951 to 39.6 percent in 1990–1991 dollars.Agriculture and associated sectors' share fell to 18.20% in 2013–14. The GDP contribution of the industrial sector is also increasing.Hence, the correct answer is option (B) i.e, The share of the services sector has increased sharply.Additional Information: Overall, the transfer payments and all final items and services that a nation produces in a given year is its national income.
Q47
Which of the following will be the outcome if an economy is under the inflationary pressure?1. Domestic currency heads for depreciation.2. Exports become less competitive with imports getting costlier.3. Cost of borrowing decreases.4. Bondholders get benefitted. Select the correct answer using the code given below.
✓ Correct answer: a) 1 and 2
ExplanationKey Concept: Inflation causes the currency of the country to go through depreciation and the cost of borrowing decreases.Explanation: Rise in the normal price of goods due to the demand and supply side pressure is referred to as inflationary pressure.Due to higher incomes, increased production, and increased spending, the overall volume of domestic trade tends to rise during an inflationary period.However, a rise in domestic product prices is likely to hurt the export trade.Hence, the correct option is Option (A) i.e, 1 and 2 only Additional Information: Debtors get profit during inflation period because they repay creditors with the current currency with less worth in terms of purchasing power.Bondholders receive a predetermined sum as interest.This interest, which is declared at the time the bond is issued and is not affected by inflation,
Q48
Which one of the Five Year Plans had a high priority to bring inflation under control and to achieve stability in the economic situation?
✓ Correct answer: b) Fifth Plan (1974-79)
ExplanationKey point: Our first Prime Minister, Jawaharlal Nehru on 8 December 1951, presented the five-year plan to the Indian Parliament Explanation: Fifth five year plan(1974-1979) laid stress to bring inflation under control to stabilise economic situation focussing on employment, checking inflation, poverty alleviation,self reliance in agricultural production, defence and justice.Hence, the correct option is (b).Additional information: Fourth five year plan(1969-74) focused o n Economic growth and modernisation.Sixth five year plan (1980-85) laid stress on economic liberalisation through creating technological self-sufficiency and eliminating poverty.Seventh five year plan(1985-1990) focused on socialism and energy production at large.
Q49
Which of the following statement(s) is/are true with respect to Phillips Curve ? 1 It shows the trade-off between unemployment and inflation 2 The downward sloping curve of Phillips Curve is generally held to be valid only in the short run 3 In the long run, Phillips Curve is usually thought to be horizontal at the non- accelerating inflation rate of unemployment (NAIRU) Select the correct answer using the code given below :
✓ Correct answer: c) 1 and 2 only
ExplanationKey Concept: Phillips curve is an accurate graphic representation of the economic relationship between the rate of unemployment and the rate of change of money wages.Explanation: According to the Phillips curve, there is a consistent inverse relationship between unemployment and inflation.According to this argument, inflation follows economic growth and should consequently produce more jobs and lower unemployment.But only in the short term is it claimed that this is true.Whereas in the long-run trade off the Phillips curve is a vertical line depicting that there is no long run tradeoff between inflation and unemployment.Hence the correct option is Option C i.e, 1 and 2 only Additional Information: It was named after the famous economist A. William Phillips.It indicates that wages tend to rise faster when unemployment is low.The specific unemployment rate at which the rate of inflation stabilizes and inflation neither rises nor falls is known as the non- accelerating inflation rate of unemployment (NAIRU).
Q50
Which one of the following is not a component of Revenue Receipts of the Union Government?
✓ Correct answer: c) Disinvestment receipts
ExplanationExplanation Receipts- It shows the various sources from which the government collects revenue.These revenues are of two types:1. Revenue Receipts These are income of the government which does not create any liability nor cause any reduction in the reduction of the asset of the government.Tax revenues- Taxes are statutory payments made by individuals and businesses to the government of a country, regardless of the direct benefits in return.Non-Tax Revenues- Income generated by the Government from non-tax sources is non-taxable income.The main sources of non-taxable income of the Central Government of India are: Commercial Revenue: electricity, railways, stamps, tolls, etc. Administrative Revenue: passport fees, government hospitals, fees, education and court costs.Fines and penalties, such as: Collected by the government when lawbreakers fail to follow rules and regulations.License Fees and Permits, Pledges and Interest Income Public Enterprise Profits.1. Capital Receipts It is the government income that creates a liability or causes a reduction in government assets.The main sources of capital income for the central government are: Borrowings Recovery of Loans and Disinvestment – Sale/Resale of shares of public sector undertakings(PSUs). | | Defence Hence, the correct answer is option C i.e Disinvestment receipts because it is part of Capital Receipts
Q51
The monetary policy in India uses which of the following tools?1. Bank rate2. Open market operations3. Public debt4. Public revenue Select the correct answer using the code given below
✓ Correct answer: a) 1 and 2 only
ExplanationKey Concept: The Central Bank uses various instruments to implement monetary policy such as repo rate, bank rate, open market operations, moral suasion, margin requirement, etc. Fiscal policy includes public debt and public revenue.Explanation: Bank Rate is the rate at which the central bank of a country lends money to commercial banks to meet their long term needs.Open market operations refers to buying and selling of government securities by the central bank from/to the commercial banks.Both are the instruments of monetary policy.This made statements 1 and 2 correct Hence, the correct answer is option (a)1 and 2 only
Q52
Which one of the following criteria got the highest weight for determination of shares of States in the formula given by the 14 th Finance Commission?
✓ Correct answer: b) Income distance
ExplanationKey Concept: 14th Finance commission.Explanations:1. According to Article 280 of the Indian Constitution, the Finance Commission's membership must be changed every five years.2. The division of the Union's net tax revenues between the Union and the States must be recommended by the Finance Commission.3. The tax devolution suggestion has increased dramatically from the 13th Finance Commission's 32% recommendation to 42%.4. The head of the 14th Finance Commission is Y. V. Reddy.The following criteria and weights govern how the tax is distributed horizontally.5. 50% Income distance6. 17.5% of the population in 1971.7. Local Population Change (2011) 10%8. 7.5% forest cover.Hence, the correct answer will be (B) ie.Income distance
Q53
Consider the following statements about the Second Five-Year Plan :1. It was drafted under the leadership of K. N. Raj.2. It proposed that industries like electricity, railways, steel, machineries and communication could be developed in the public sector.3. The drafters found balancing industry and agriculture very difficult.4. The drafters found balancing industry and agriculture really easy. Which of the statements given above is/are correct?
✓ Correct answer: c) 2 and 3
ExplanationKey Concept: The Second Five Year Plan (1956 - 1961) was subjected to the idea of improving the public sector and rapid industrialisation.Balancing between the industry and agriculture was challenging for the drafters.Explanation: The second five year plan was based on Mahalanobis model named after Indian statistician, Prasanta Chandra Mahalanobis.The second five-year plan focused on industry, especially heavy industries like electricity, railways, steel, machineries and communication The scale and methods of production were given a push for better.The growth rate targeted by the second five year plan was 4.5% and the growth rate achieved was 4.27%.Hence, the correct option is Option C i.e, 2 and 3 only
Q54
Which one of the following sectors is not affected by the changes made in the Foreign Direct Investment Policy in June 2016?
✓ Correct answer: a) Multi-brand retailing
ExplanationKey Concept: Foreign Direct Investment: A foreign direct investment (FDI) is an investment which is made by a company or an individual ,in one country and it is based in another country.Explanation: Foreign Direct Investment Policy in June 2016 was released by the department of industrial policy and promotion , ministry of commerce and industry.Multi -brand retailing sectors are not affected by the changes made in the FDI Policy in June 2016. Additional Information:- The main factors that affect FDI are Infrastructure and access to raw material.Communication and transport links.Skill and wage costs of labor.Hence, The correct answer is option(a)Multi - brand retailing.
Q55
Arrange the following events in sequential order as they happened in India :1. Mahalanobis Model2. Plan Holiday3. Rolling Plan Select the correct answer using the code given below.
✓ Correct answer: a) 1-2-3
ExplanationKey Concept:- Events that are in sequential order as they happened in India……1. Mahalanobis Model2. Plan Holiday3. Rolling Plan Explanation:- These all are related to five year plans of the planning commission.Mahalanobis Plan:-This was India’s IInd five-year plan (1956-61) proposed by Professor Prasanta Chandra Mahalanobis.Plan Holiday:-This was developed due to the failure of the Third Five Year Plan.Rolling Plan:- The Janata government's sixth five-year plan was introduced for the years 1978 to 1983. Hence, The correct answer is Option (a) ie.1,2,3
Q56
Who among the following scholars argued that "capital created underdevelopment not because it exploited the underdeveloped world, but because it did not exploit it enough"?
✓ Correct answer: c) Geoffrey Kay
ExplanationKey Concept: Identifying the statement .Explanation: The following statement is said by Geoffrey Kay in his book “Development and Underdevelopment: A Marxist Analysis” The book is based on the ideology of Karl Marx.In his book he tried to provide insight into the impact capitalism has on our society.Hence the correct answer is option (c) i.e., Geoffrey Kay
Q57
Devaluation of currency will be more beneficial if the prices of
✓ Correct answer: b) Exports become cheaper to importers.
ExplanationKey Concept: Devaluation refers to reduction in price of domestic currency in terms of all foreign currencies under fixed exchange rate regime.It helps a country's economy by increasing its competitiveness in the international market.Explanation: Under the fixed exchange rate system, the exchange rate for a currency is fixed by the government to ensure stability in foreign trade and capital movements.To achieve stability, the government undertakes to buy and sell foreign currencies.Hence, the correct answer is Option (b).
Q58
Goods and Services Tax likely to be levied in India is not a
✓ Correct answer: a) gross value tax
ExplanationKey Concept:- Goods and Services Tax( GST) likely to be levied in India is not a gross value tax.Explanation:- Goods and Services Tax (GST) is a type of indirect tax.It is used in India for the supply of goods and services.Goods and services are divided into five different tax slabs for collection of tax 0%, 5%, 12%, 18% , 28%.GST is not applicable for diesel, petrol, natural gas, aviation fuel, electricity and liquor.Additional Information:- Type of tax:- Indirect First Idea:- The Idea towards GST was the first mooted in the budget for 2006-2007. Nature of Tax:- Destination based tax, Value added tax, Consumption Tax.Here, The correct answer is Option ( a)
Q59
UBI, as an alternative for subsidies in poverty alleviation, stands for
✓ Correct answer: d) Universal Basic Income
ExplanationKey Concept: UBI is a government program in which every citizen would get a certain amount of money to cover their basic expenses as well as additional assistance, if they require it during challenging times.Explanation: UBI stands for Universal basic income According to the survey, UBI would cost between 4% and 5% of GDP to reduce poverty to 0.5%.Hence, the correct answer option is (d)Universal Basic Income Additional Information: Former Finance Minister, Arun Jaitley suggested a Universal Basic Income.It was suggested in the Economic Survey for 2016–17. Iran was the first nation to implement a national basic income in the fall of 2010.
Q60
Which one of the following indices is now used by the Reserve Bank of India to measure the rate of inflation in India?
✓ Correct answer: c) Consumer Price Index
ExplanationKey Concept: The Consumer Price Index (CPI), which calculates the percentage change in the cost of a basket of products and services that families typically use, is the most well-known measure of inflation.Explanation: The Reserve Bank of India has been tasked to keep in check that the retail inflation remains at 4% with margin of 2%.Retail inflation has constantly been above the upper tolerance limit for 11 months in a row due to some external factors.According to Trading Economics, global macro models and analyst's assumptions, inflation rate in India is said to be 5.30 percent by the end of this quarter.Hence, the correct option is Option C i.e, Consumer Price Index
Q61
The Most Favored Nation (MFN) Clause under WTO regime is based on the principle of
✓ Correct answer: a) non-discrimination between nations
ExplanationKey Concept: The principle of non- discrimination between nations is known as Most Favored Nation (MFN) treatment.Explanation: The World Trade Organization's 164 members make sure to treat other members equally so, all of them benefit from each other's lowest tariffs, highest import quotas and fewest trade barriers for goods and services.Most Favored Nation treatment requires members to accord the most favorable tariff and non-supervisory treatment given to the pro- conduit of any one member at the time of import or import of “like products” to all other members.Hence, the correct option is Option (A) i.e, non-discrimination between nations
Q62
The Twelfth Five-Year Plan focussed on inclusive growth. Which of the following were considered as challenges for inclusiveness?1. Poverty2. Group inequality3. Regional imbalance4. Unemployment Select the correct answer using the code given below.
✓ Correct answer: b) 1,2,3 and 4
ExplanationKey Concept: The Twelfth Five Year Plan (2012-2017) was focused on faster, sustainable and more inclusive growth.Unemployment, group inequality and regional imbalance were the biggest challenges faced by the program.Explanation: The Twelfth Five Year Plan ran from 2012 to 2017 and was presided over by Manmohan Singh.Even though many of the objectives outlined in the plan weren't entirely achieved, several economic sectors still experience significant improvements in output.Consumer products climbed by 87%, capital goods by 158%, and overall industrial output increased by 118%.Hence, the correct option is Option (B) i.e, 1,2,3 and 4
Q63
The phenomenon of 'demographic dividend' of a country relates to
✓ Correct answer: b) an increase in working age population
ExplanationKey Concept: The phenomenon of 'demographic dividend' of a country occurs when there is an increase in the working age population.Explanation: Demographic dividend means when the economic growth results from the shift in the population’s age structure The demographic dividend is the increase in economic growth , which results when the working age population is more than the non working age population Additional Information: David Bloom is the author of the phrase "demographic dividend".Hence, The correct answer is option (b) an increase in working age population.
Q64
Which one of the following statements about Exchange-Traded Fund (ETF) is not correct?
✓ Correct answer: c) It typically has lower daily liquidity and higher fees than mutual fund shares.
ExplanationKey Concept: Exchange traded funds, or ETFs, are marketable securities that follow an index, a commodity, bonds, or a portfolio of assets, similar to index funds.ETFs are a desirable alternative for individual investors since they often offer higher daily liquidity and lower fees than mutual fund schemes.Explanation: As an ETF is bought and sold on the stock market throughout the day, its trading price fluctuates just like the price of any other stock.The net asset value of the stock basket that the ETF is investing in is reflected in its pricing.Hence, the correct answer is Option (c).
Q65
The natural rate of unemployment hypothesis was advocated by
✓ Correct answer: a) Milton Friedman
ExplanationKey Concept- Natural Unemployment- Natural Unemployment or natural rate of unemployment can be defined as the minimum level required for a sustainable economy without being the cause of inflation.The number of jobs available should be equal to the number of unemployed.There are various two types of unemployment- Frictional Unemployment - Some people keep changing jobs frequently.So, they may be unemployed for some period.This may be called a temporary form of unemployment.Structural Unemployment- This means that jobs are available in the market.But people lack the required skills.So, they hire temporary people or hire fewer people.This is a structural form of unemployment.Explanation- A.W. Philips was the academic professor known for the Philips Curve.J.M. Keynes is an English economist, known founder of modern macroeconomics.R.G Lipsey is known for his theory of second best in Economics.The hypothesis of Natural Rate of Unemployment was given by Milton Friedman.Hence, the correct option is ‘a’.
Q66
The following item consists of two statements, Statement I and Statement II. Examine these two statements carefully and select the correct answer using the code given below. Statement I: There has been a sharp decline in savings rate in Indian economy between 2007- 2008 to 2015-2016. Statement II: There has been a fall in household and public savings.
✓ Correct answer: a) Both the statements are individually true and Statement II is the correct explanation of Statement I
ExplanationKey Points- According to CEIC data, there is sharp decline in savings rate from Explanation- Fall in household and public savings are one of themain reason for this decline.This fall is not a continuous downward .Low in household savings rate is due to the lower returns of invaluable assets.Hence the correct option is ‘a’ i.e. Both the statements are individually true and Statement II is the correct explanation of Statement I.
Q67
Which of the following statements about the India Post Payments Bank (IPPB) is/are correct?1. It has been incorporated as a Public Limited Company.2. It started its operation by establishing two pilot branches at Hyderabad and Varanasi. Select the correct answer using the code given below.
✓ Correct answer: a) 1 only
ExplanationKey Concept- India Post Payments Bank aimed at making the bank reach the locals through the post.India has one of the largest and oldest post services.It is governed by the RBI and has many facilities like zero balance accounts and many more considering the situation of rural people.Its first two operational branches were at Raipur and Ranchi.Now, it has expanded up to 650 branches.Explanation- India is still a developing country.It has a rural economy.There are many remote areas which lack basic facilities.There were fewer banking opportunities in many areas.So, the government started the IPPB initiative under the leadership of the Prime Minister in 2018. Hence, the correct option is ‘a’.
Q68
The Fourteenth Finance Commission assigned different weights to the following parameters for distribution of tax proceeds to the States :1. Income distance2. Population3. Demographic changes4. Area Arrange the aforesaid parameters in descending order in terms of their weights.
✓ Correct answer: b) 1-2-4-3
ExplanationKey Concept- Taxes- Taxes are the mandatory finances levied by the government to the nationals to incur their expenses.Explanation- We can see that the maximum weight was given as: Income Distance > Population > Area >Demographic changes Finance Commission- According to Article 280, the Finance Commission is built every 5 years under the president.The main objective is to govern the money flow and decide how to distribute it.Mr Y.V. Reddy, the governor of RBI, formed the Fourteenth Commission.It was constituted on 2 january 2013. The maximum weight was given to the Income distance which shifted from 47.5% to 50%.It focuses on the gross per capita income of all states.The state with the highest GDP is considered a reference for others.The weight of the population was shifted from 25% to 17.5%%.The weight of the area was increased to 15%.The demographic changes were at least a priority from the above list.Hence, the correct option is 'b'.
Q69
Which one of the following is the maximum age of joining the National Pension System (NPS) under the NPS-Private Sector?
✓ Correct answer: c) 65 years
ExplanationKey Concept: National Pension Scheme is a voluntary pension system where citizens can join the scheme up to an age of 65 years.Earlier, the age limit was 60 years but later it was increased.Explanation: One can exit from the scheme on completion of 5 years.PFRDA has recently announced that the National Pension System (NPS) will no longer compel investors to convert 40% of their accumulated retirement corpus into an annuity, as poor yields on annuities and high inflation are translating into negative returns.It has also announced that the retirees will be able to take out the entire Rs.5 lakh savings in the NPS against Rs. 2 lakh at present.Hence, the correct answer is Option (c).
Q70
The Economic historian, who has used the data collected by Buchanan Hamilton to support the thesis of deindustrialization in the 19th century India, is
✓ Correct answer: b) Amiya Kumar Bagchi
ExplanationExplanation The Buchanan-Hamilton data were utilized by Amiya Kumar Bagchi to bolster his deindustrialization argument in the 19th century.Hence the correct option is ‘B’ i.e. Amiya Kumar Bagchi.
Q71
The following item consists of two statements, Statement I and Statement II. Examine these two statements carefully and select the correct answer using the code given below. Statement I: Private investments in research have severely lagged public investments in India. Statement II: Universities play a relatively small role in the research activities of the country.
✓ Correct answer: a) Both the statements are individually true and Statement II is the correct explanation of Statement I
ExplanationKey Points- Private Investment is money invested by companies, financial organizations, or investors rather than by a government.Explanation- According to Economic Survey the investments by the private sector in research have severely lagged public investments in India.In comparison to developed countries,major research source are carried out by them in India.The survey also states that over the past two decades, public investment in research is stagnant to of GDP.Reason is the small role played by Universities in the research activities of India.Hence the correct option is ‘a’ i.e.Both the statements are individually true, and Statement II is the correct explanation of Statement I
Q72
According to the latest Reserve Bank of India study on State finances, capital spending is maximum on
✓ Correct answer: d) education
ExplanationKey Concept- Reserve Bank of India is the body responsible for regulating the Indian Banking System.The money that government or state spends on the infrastructure, schools, public facilities and development.The responsibility of keeping and maintaining the records of the capital is given to RBI.The RBI or Reserve Bank Of India publishes the reports on the capital spending of the state every year.This year also this report was published.Explanation- According to the latest reports, the spending was maximum on Education Sports And Culture .This is followed by Rural Devoplement Hence, the correct option is 'D'.
Q73
Consider the following statements about the impact of tax :1. A tax is shifted forward to consumers if the demand is inelastic relative to supply.2. A tax is shifted backward to producers if the supply is relatively more inelastic than demand. Which of the statements given above is/are correct?
✓ Correct answer: c) Both 1 and 2
ExplanationKey Concept- Impact of Tax- The initial burden of tax is called as Tax Impact.The one who is liable to pay taxes bears its impact.The consumers and producers both have to pay the taxes.Explanation- Taxes- Taxes are the mandatory finances levied by the government to the nationals to incur their expenses.Taxes also keep on changing with the new rules and are changed accordingly.It has various effects on people, which may be positive or negative.A tax is shifted forward to consumers if the demand is inelastic relative to supply.This statement is correct.When demand is inelastic (less responsive to price changes) compared to supply, producers can pass on the tax burden to consumers without much decrease in quantity demanded, hence shifting the tax burden forward to consumers.A tax is shifted backwards to producers if the supply is relatively more inelastic than demand.This statement is also correct.When supply is relatively more inelastic (less responsive to price changes) than demand, producers bear the brunt of the tax burden because they cannot easily reduce production in response to higher taxes.Consequently, they may absorb a larger portion of the tax burden, leading to a backward shift of the tax burden to producers.Hence, the correct option is 'c'.
Q74
As per the extant policy, Foreign Direct Investment is permitted in the defence sector under the automatic route up to which one of the following limits?
✓ Correct answer: d) 49 per cent
ExplanationKey Points- Defence Industry’s Foreign Direct Investments(FDI).Explanation- Under the automatic route, Foreign Direct Investment is permitted in the defense sector.Reason - to access modern technology.The defense sector has two laws-1. Arms Act,2. Industries(Development & Regulation) Act, .Hence the correct option is ‘d’ i.e. .
Q75
The following item consists of two statements, Statement I and Statement II. Examine these two statements carefully and select the correct answer using the code given below. Statement I: Agriculture in India still accounts for a substantial share in total employment. Statement II: There has been no decline in volatility of agricultural growth in India.
✓ Correct answer: c) Statement I is true but Statement II is false
ExplanationKey Points- Agriculture is a primary sector of India.Explanation- Total contribution in GDP of India by Agricultural sector is .Thus, Statement I is true in its sense that in India, Agriculture still accounts for a substantial share in total employment.The annual volatility (measured by standard deviation) is reduced from to .Thus, Statement II is wrong.Hence the correct option is ‘c’ i.e.Statement I is true but Statement II is false
Q76
According to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to
✓ Correct answer: b) diminish
ExplanationThe Law of Diminishing Marginal Utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases.The law of diminishing marginal utility states that the "as a consumer consumes more and more units of a commodity, the utility with every unit consumed goes diminishing' The theory can be explained with an example suppose a consumer has 5 apples, if he gets 50 utils with consuming ISt apple, then marginal utility gained after consuming 2nd apple will be less than 50 utils and goes on decreasing with every extra unit consumed.
Q77
The Reserve Bank of India has recently constituted a high-level task force on Public Credit Registry (PCR) to suggest a road map for developing a transparent, comprehensive and near-real-time PCR for India. The task force is headed by
✓ Correct answer: d) Y. M. Deosthalee
ExplanationKey Concept- Public Credit Registry (PCR)- It is a repository in which the information of all the borrowers is stored.It aggregates the financial and non- financial information of all the borrowers.It was setup in the year 2018. The government constituted a high level task force on PCR to suggest a road map for the system.Explanation- Public Credit Registry or PCR is necessary as it helps to distinguish between good and bad borrowers.This committee was headed by Y.M. Deosthalee along with 10 other people.Hence, the correct option is 'd'.
Q78
According to the World Bank's Doing Business Report, 2018, India's ranking has improved in 2018 as compared to 2017 in which of the following areas?1. Paying taxes2. Resolving insolvency3. Starting a business4. Getting electricity Select the correct answer using the code given below.
✓ Correct answer: b) 1 and 2 only
ExplanationKey Concept- Ease of Doing Business Index- The ease of doing business index is released by the world bank every year.It gives the rank to countries by rating them on a scale of 100. The better the score the greater the rank will be.The rating is given based on 11 key points.The better rank emphasizes that the procedures are less hectic and with maximum protection of rights.Explanation- India- India jumped from its rank of 130 to 100. The areas in which we improved the ranking was paying taxes and resolving insolvencies.Hence, the correct option is 'b'.
Q79
The following item consists of two statements, Statement I and Statement II. Examine these two statements carefully and select the correct answer using the code given below. Statement I: The overall fiscal deficit of the States in India during 2017-2018 stayed above the FRBM threshold level of 3 percent for the third successive year. Statement II: Special Category States had run up a higher level of fiscal deficit in 2017-2018 compared to 2016-2017.
✓ Correct answer: d) Statement I is false but Statement II is true
ExplanationKey Points- There is a fall in fiscal deposits of FY in comparison to FY Fiscal deposits are a difference between total revenue and total expenditure.Explanation- The overall Fiscal deficit stated in FY 2017-18 fell to , which was at in FY , according to RBI reports.Thus, the first statement is wrong.While fiscal deposits of Special category states in FY were at deteriorated to in FY .Thus, statement II is correct.Hence the correct option is ‘d’ i.e. Statement I is false but Statement II is true.
Q80
Which one of the following is an example of a price floor?
✓ Correct answer: a) Minimum Support Price (MSP) for Jowar in India
ExplanationKey Concept: Minimum Support price (MSP) for Jowar in India is an example of price floor.Explanation: The price floor is the lowest- price for a commodity to be sold at fixed legally.When the demand of a product is less, the price floors are used by the government to prevent the price of that product from being too low.For example, if a government wants to promote the business of coffee beans, it can set one in the coffee grain market.Government introduced floor prices in markets where demand is inelastic and prices are naturally very low.Hence, the correct option is Option A i.e, Minimum Support Price (MSP) for Jowar in India
Q81
Which one of the following factors is not considered in determining the Minimum Support Price (MSP) in India?
✓ Correct answer: c) Cost of living index
ExplanationKey Concept: The cost of living index is not considered in the Minimum Support Price (MSP).Minimum Support Price (MSP) is the minimum amount fixed by the government for particular agricultural products.Products would be bought from the farmers directly at this fixed price if the open market prices are lower than the cost incurred.Explanation: According to the opinions of the Commission for Agricultural Costs and Prices, the Department of Agriculture and Cooperation, Government of India, announces the Minimum Support Prices (MSP) for generally 22 crops before their sowing seasons.There are some factors regarding the minimum support price like demand, supply, cost of production, intercrop price, terms of trade between agriculture and non agricultural, etc. Hence, the correct option is Option C i.e, Cost of living index
Q82
Gini Coefficient or Gini Ratio can be associated with which one of the following measurements in an economy?
✓ Correct answer: c) Income inequality
ExplanationKey Concept: In economics, the Gini coefficient is used to calculate the degree of income disparity among a country's citizens.Explanation: A Gini coefficient of zero shows maximum equality, whereas a Gini coefficient of one expresses the maximum degree of inequality.The Consumer Price Index is used to calculate inflation in India (CPI).Additional Information: Many factors, such as the Global Multidimensional Poverty Index and the Human Poverty Index, are used to calculate an index of poverty.Wages/salaries and money the government transfers to you in the form of transfer payments are both considered personal income.Hence, the correct option is Option C i.e, Income inequality
Q83
Which one of the following statements is not correct?
✓ Correct answer: d) When total utility is maximum, marginal and average utility are equal to each other.
ExplanationKey Concept: consumer theory Explanation: Total utility is the overall content a consumer gets from the consumption of a specific service or goods Total utility is the net of marginal utilities of all the individual goods.When the consumption of an extra unit of the item occurs, it results in marginal utility.Hence, the correct option is Option (D) i.e, When total utility is maximum, marginal and average utility is equal to each other.Additional Information: Total utility works hand in hand with marginal utility.When the marginal utility is positive, the total utility will increase and once the marginal utility is negative, then the total utility will decrease.
Q84
The value of the slope of a normal demand curve is
✓ Correct answer: b) negative
ExplanationKey Concept: The demand curve is normally downward sloping hence, the value of the slope of a normal demand curve is negative.Explanation: The demand curve is normally inclined downwards because it indicates an inverse relationship between price and quantitative demand.The demand curve predicts that as the price of the product goes up, the amount requested goes down, and as the price goes down, the demand of the product goes up.In some cases if there is a straight-line demand curve then, the slope is equal at all its points.Hence, the correct option is Option B i.e, negative
Q85
A market situation when many firms sell similar but not identical products is termed as
✓ Correct answer: c) monopolistic competition
ExplanationKey Concept: A situation in the market when many firms sell a similar but not identical product then, it is termed as Monopolistic competition.Explanation: In Monopolistic competition, economists refers to the industries that consist of many firms competing against each other, but selling products that are distinctive in some way.For example, when grocery stores are selling products, as there are a large number of firms that sell many of the same goods but with distinct branding and marketing.This exists in monopolistic competition.Hence, the correct option is Option C i.e, monopolistic competition
Q86
Which one of the following equals Personal Disposable Income?
✓ Correct answer: a) Personal Income - Direct taxes paid by households and miscellaneous fees, fines, etc.
ExplanationKey Concept: Personal Disposable Income can be described as the amount of money left for the household after deduction of all forms of taxes like the direct tax (Income Tax), fees, and fines, etc. Explanation: Personal Disposable income is the left money of our income after we pay all the direct taxes.Personal Disposable Income is measured using the following formula: Disposable income = Personal income – Personal current taxes.Hence, the correct option is Option A, i.e Personal Income - Direct taxes paid by households and miscellaneous fees, fines, etc.
Q87
Which one of the following is not an assumption in the law of demand?
✓ Correct answer: c) Consumers are demonstrating the effect affected by
ExplanationKey Concept: The law of demand states that the quantity purchased varies inversely with the price.Explanation: The law of demands principle conveys that there is a negative relation between the price and quantity demanded of a commodity over a particular period of time.There are three exceptions to the Law of Demand- Giffen goods Veblen effect Change in income Hence, the correct option is Option C i.e, Consumers are demonstrating the effect affected by
Q88
Consider the following statements:1. Inflation in India continued to be moderate during 2017-18. 2.There was significant reduction in food inflation, particularly pulses and vegetables during the period. Which of the statements given above is/are correct?
✓ Correct answer: a) 1 only
ExplanationKey Concept: Inflation remained moderate during 2017-18 in India.During this period, reduction in inflation was broadly based on major commodities except for housing fuel and electricity.Explanation: The average of inflation measured by the method of CPI (Consumer Price Index) was 3.3% during 2017-18. It is the lowest value calculated in the last six financial years, according to the Economic Survey.Hence, the correct option is Option (A) i.e, 1 only Additional Information: A moderate inflation shows the economy of the country healthy, because as the economy grows, demand for goods also grows.This increase in demand forces prices a little high as industries try to produce more of the goods that are in demand and consumers and businesses want to buy.
Q89
Consider the following statements about a joint-stock company :1. It has a legal existence.2. There is limited liability of share- holders.3. It has a democratic management.4. It has a collective ownership. Which of the statements given above are correct?
✓ Correct answer: d) 1, 2, 3 and 4
ExplanationKey Concept: The companies are registered under the Companies Act, 2013. Hence a company acts as an artificial legal person which can buy and sell products.It can also sue and get sued.Explanation: A business organization that is owned by its investors is called a Joint-stock company.In a joint stock company the company's shares of the company can be bought and sold by the shareholders.Shareholders must have ownership of at least one stock of the company in order to be considered as a partial owner.Hence, the correct option is Option (D) i.e, 1, 2, 3 and 4
Q90
Consider the following statements about. indifference curves :1. Indifference curves are convex to the origin.2. Higher indifference curve represents higher level of satisfaction3. Two indifference curves cut each other. Which of the statements given above is/are correct?
✓ Correct answer: b) 1 and 2
ExplanationKey Concept: One of the four features of the indifference curve is that they do not intersect each other.Explanation: An indifference curve is the group of various points depicting different combinations of two different products providing equal utility to the consumer.There are four features of an indifference curve- Indifference curve slopes downwards to the right.Indifference curve is convex to the origin.It cannot intersect with each other.The higher indifference curve shows the higher satisfaction is in comparison to the less higher indifference curve.Hence, the correct option is Option (B) i.e, 1 and 2 only
Q91
Indexation is a method whose use can be associated with which one of the following?
✓ Correct answer: a) Controlling inflation
ExplanationKey Concept: Indexation considers the period from when you acquired the asset until when you sold it.It considers both the inflation rate at the time of asset purchase and the inflation rate at the time of asset sale.Explanation: Indexation is a technique for adjusting income payments using a price index to preserve the public's purchasing power after inflation.Indexation offers the chance to raise the selling price by accounting for the effects of inflation.Thus, indexation would enable beneficiaries to gain from a reduction in tax liability.Hence, the correct option is A. Which is Controlling inflation
Q92
Which one of the following statements with regard to economic models is not correct?
✓ Correct answer: c) They can be expressed only through equations.
ExplanationKey Concept: The economic models are not necessarily represented in equations only.They are presented in a way to show the whole or a part of theory.Explanation: An economic model is a simplified definition of reality, modeled in a way to yield hypothesis about economic behavior that can be tested.An important feature of an economic model is that, it is necessarily subjective in design because there are no objective measures of economic outcomes.Hence, the correct option is Option C i.e, They can be expressed only through equations.
Q93
Who among the following has given the concept of Human Development?
✓ Correct answer: b) Mahbub-ul-Haq
ExplanationQuestion Demand: Human Development Index.Key Concept: Human Development Index.Explanations:1. In the late 1970s and early 1980s, the economist and statesman Mahbub-ul-Haq of Pakistan popularised the idea of human development.2. He made the case that conventional measurements of economic growth, such the Gross Domestic Product (GDP), were insufficient to capture a society's whole spectrum of development and well-being.3. The Human Progress Index (HDI), which Haq suggested as a new paradigm for assessing development, attempted to capture advancements in both education and health outcomes in addition to economic growth.4. Today, several countries utilise the HDI as a gauge of human progress.Hence, the correct answer will be (B) ie.Mahbub-ul-Haq
Q94
Which one of the following canons of taxation was not advocated by Adam Smith?
✓ Correct answer: d) Canon of fiscal adequacy
ExplanationKey concept: Adam Smith , the 18th century economist and philosopher, attempted to systematize the rules that should govern a rational system of taxation.Explanation: Four Canons or four principles of taxation of Adam smith are: Canon of Equality Canon of Certainty Canon of Convenience Canon of Economy Hence, the correct option is (d).Additional information: Other canons were added by other Economists in the list of Adam Smith’s Canon.Canon of productivity Canon of Elasticity Canon of Simplicity Canon of Variety Canon of Flexibility.
Q95
According to John Maynard Keynes, employment depends upon
✓ Correct answer: c) effective demand
ExplanationKey Concept: According to J. M. Keynes, the amount of employment depends on the level of effective demand of individuals and their goods and services.Explanation: J.M Keynes’ theory of employment is based on the efficient demand.This means that Keynes approached employment by the demand side of the model.According to him, the volume of employment in a country is directly dependent on the level of effective demand of individuals.Hence, unemployment is seen as the deficiency of effective demand.Hence, the correct option is Option C i.e, effective demand
Q96
The working of the price mechanism in a free- market economy refers to which one of the following?
✓ Correct answer: a) The interplay of the forces of demand and supply
ExplanationKey Concept: In the Price mechanism, the prices are determined by the free interaction of the forces of demand and supply.Explanation: A price mechanism, which is part of a market system, involves various ways of matching buyers with sellers.The price mechanism is an economic model in which price plays a key role in informing the activities of producers, consumers and resource providers.An example of a price mechanism is the prices of a product proposed and charged.Hence, the correct option is Option A i.e, The interplay of the forces of demand and supply.
Q97
Which one of the following is not a dimension of the Human Development Index?
✓ Correct answer: c) Access to banking and other financial provisions
ExplanationKey Concept: Access to banking and other financial provisions is not considered as a factor of measuring the Human Development Index of any country.Explanation: A country's social and economic development is measured by calculating its Human Development Index by focusing on the following main four factors: mean years of schooling, expected years of schooling, life expectancy at birth, and gross national income (GNI) per capita.The United Nations Development Programme is the international institution which measures and publishes the Human Development Index.India ranks at 132nd position in 191 countries that were included in HDI report according to the latest report(HDR-2022).Hence, the correct option is Option C i.e, Access to banking and other financial provisions
Q98
When some goods or productive factors are completely fixed in amount, regardless of price, the supply curve is
✓ Correct answer: c) vertical
ExplanationKey Concept: When the quantity of products is fixed and the price varies, the slope will be vertical.Explanation: In a supply curve graph, the quantity of goods or products is shown on the x-axis and the price of those goods are depicted on the y axis.When the amount of products on the x-axis are fixed and the priceways the slope is vertical.Since the quantity of goods generally doesn't start with zero, there is no curve in the slope.Hence, the correct option is C Which is vertical
Q99
Sub-prime crisis' is a term associated with which one of the following events?
✓ Correct answer: a) Economic recession
ExplanationKey point: Subprime generally refers to the credit score of a consumer which is lower than someone with good credit.Explanation: The subprime crisis that started in 2007 is an economic recession.It had badly affected the mortgage industry after the borrowers were not able to afford the repayment of loan.Many financial institutions and Hedge funds in the USA collapsed due to the economic crisis.It severely affected Global credit “Global turn down” is called an economic crisis.Hence, the correct option is (a).
Q100
Which one of the following countries is not a founding member of the New Development Bank?
✓ Correct answer: c) Canada
ExplanationKey point: National Development Bank(NDB) was founded in 2014 formerly known as the BRICS Development Bank.It was established to fund sustainable development projects and infrastructure projects in the BRICS countries and other developing countries and emerging markets.Explanation: The BRICS countries, namely, Brazil, Russia, India, China and South Africa established the multilateral financial institution i.e. National Development Bank.Hence, the correct option is (c).
Q101
Which one of the following hypotheses postulates that individual's consumption in any time period depends upon resources available to the individual, rate of return on his capital and age of the individual?
✓ Correct answer: c) Life Cycle Hypothesis
ExplanationKey Concept: The Life Cycle Hypothesis (LCH) is an economic theory that explains how people maintain roughly the same level of consumption over time by saving when income is high and borrowing when income is low.Explanation: The consumption function theory was given by Endo and Modigliani and it is known as Life Cycle Hypothesis.The life-cycle hypothesis (LCH) is an economic theory that conveys the spending and saving patterns of individuals over the course of their life.It motivates people to work and save for retirement instead of spending all their income.Hence, the correct option is Option C i.e, Life Cycle Hypothesis
Q102
Which of the following statements with regard to the 'Make in India' initiative is/are correct?1. It was launched in the year 2018. 2.Its objective is to foster innovation. Select the correct answer using the code given below:
✓ Correct answer: b) 2 only
ExplanationQuestion Demand: Make in India.Key Concept: Make in India.Explanations:1. A key programme of the Indian government, Make in India, was introduced in 2014.2. It was started with the intention of promoting India as a significant investment location as well as a centre for design, manufacturing, and innovation on a worldwide scale.3. The program's promotion of innovation is one of its key goals.4. The Ministry of Commerce and Industry's Department of Industrial Policy and Promotion is in charge of it.5. By 2025, it is desired to increase manufacturing's contribution to GDP from its present 16% to 25%.Hence, the correct answer will be (B) ie.Only B
Q103
Who among the following is the Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM)?
✓ Correct answer: b) Bibek Debroy
ExplanationBibek Debroy is an Indian Economist appointed as the Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) in September 2017. The Economic Advisory Council to the Prime Minister (EAC-PM) is constituted to give economic advice to the Government of India, especially to the Prime Minister.Economic Advisory Council to the Prime Minister is a non-constitutional, non- permanent and independent body set up in September 2017. Hence, the answer is option (b) Bibek Debroy.Additional Information: Ratan P. Watal is a Finance Secretary at the Ministry of Finance.Ashima Goyal is a member of the Indian Technical Advisory Committee on monetary policy.Sajidid Chinoy serves on the Advisory Council of the 15th Finance Commission set up by the government of India.
Q104
In economics, if a diagram has a line passing through the origin and has angle with either axis and it is asserted that along the line , what is tacitly assumed?
✓ Correct answer: b) Both variables are in the same unit.
ExplanationKey Concept: If a diagram has a line going through the origin and makes an angle of 45° with either axis and it is asserted that along the line X = Y, then both variables are in the same unit.Explanation: When a line in a diagram in economics passes through the origin and makes a 45° angle with either axis and it is said that along the line X=Y, both variables are in the same unit.Furthermore, it is impossible to compare the magnitudes of the estimated coefficients in different units.Hence, the correct option is Option B i.e, Both variables are in the same unit.
Q105
The Cash Reserve Ratio refers to
✓ Correct answer: b) the share of Net Demand and Time Liabilities that banks have to hold as balances with the RBI
ExplanationKey Concept: The share of Net Demand and Time Liabilities that banks have to hold as balances with the RBI is known as the Cash Reserve Ratio (CRR).Explanation: It is mandatory for banks to hold a particular proportion of their deposits in the cash with the Reserve Bank of India.The minimum ratio, that is, the portion of the total deposits to be held in cash is stipulated by the RBI and is referred to as CRR.The Prime function of CRR is to maintain inflation in control.In times when inflation rises in the economy, the central bank increases the CRR to lower the bank's loanable funds.Hence, the correct option is Option B i.e, the share of Net Demand and Time Liabilities that banks have to hold as balances with the RBI Additional Information: Statutory Liquidity Ratio (SLR) is the ratio of these liquid assets to the demand and time liabilities.The Reserve Bank of India (RBI) can increase this ratio by up to 40%.
Q106
Suppose an agricultural laborer earns per day in her village. She gets a job to work as a babysitter in a nearby town @ ₹700 per day. She chose to work as an agricultural laborer. Which one of the following is the opportunity cost of the agricultural laborer?
✓ Correct answer: d) ₹ 300
ExplanationIf a farm worker earns Rs. 400 per day and additionally secures a second babysitting position in a nearby town that pays Rs. 700 per day.Opportunity cost = Return on the Best Investment Option – Investment Returns Selected for Pursuit.The opportunity cost for her to work in agriculture would be (Return on the Best Investment Option) 700 – (Investment Returns Selected for Pursuit) 400 = 300. Hence, the Correct option is D‘ i.e. ₹ 300
Q107
A market, in which there are a large number of firms, homogeneous product, infinite elasticity of demand for an individual firm and no control over price by firms, is termed as
✓ Correct answer: d) perfect competition
ExplanationKey Concept: Market Explanation: Perfect competition Market has a large number of buyers and sellers.All sellers are small sellers in competition with each other.There is no big seller hence, all the firms in such a market are price takers.Participants are high both buyers ans sellers.Products have many substitutes and no marketing or selling cost is incurred in this market.The seller is a price taker, not a price maker.Buyer is a price maker as he is willing to buy all at a certain price but none at a price higher.Hence, the correct option is D i.e.' Perfect Competition.'
Q108
Which one of the following is not an objective of the MGNREGA?
✓ Correct answer: a) Providing up to 100 days of skilled labour in a financial year
ExplanationKey concept: MGNREGA stands from The Mahatma Gandhi National Rural Employment Guarantee Act which was passed in 2005. This act ensures the Right to work for Rural people.Prime minister P.V. Narshimha Rao proposed Rural Employment in 1991. Explanation: This act provides guaranteed at least 100 days of wage employment for unskilled labour work. provides the livelihood security for the poor people by creating productive assets like roads, water canal for irrigation and wells and ponds.It ensures livelihood security by merging people belonging to the poverty line.So it will reduce the migration of labour from Rural areas to urban areas.Providing helps and ensures work for the women belongs to the ST, SC and poverty line.Hence, the correct option is (a).Additional information: It was called the Employment Assurance scheme but later known as MGNREGA because of the inclusion of the food work programme in 2005
Q109
Since 2014-15, India has consistently run trade surplus with which one among the following countries?
✓ Correct answer: c) USA
ExplanationKey Concept: Internaional Trade Explanation: USA was India's top trading partner for the second consecutive fiscal year in 2019-20. It shows increasing economic ties between the two.Bilateral trade between India and USA in 2019-20 was USD 88.75 billion.USA surpassed China to become a top trading partner of India.Bilateral trade between India and China decreased to 87.08 billion in 2018-19. Hence, the correct option is C i.e.'USA.'
Q110
Recently the Reserve Bank of India has imposed limitations, initially for a period of six months, on the withdrawal of amount by account holders of which one of the following banks?
✓ Correct answer: c) Punjab and Maharashtra Cooperative Bank
ExplanationKey Concept: The Reserve Bank of India has imposed some restrictions on the withdrawal of money by the account holders of Punjab and Maharashtra Co-operative Bank initially for a period of 6 months.Explanation: The Punjab and Maharashtra Co-operative Bank is a Multi State scheduled Urban and Co-operative bank.It is currently working in the states of Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh.This Bank was given the scheduled status by the Reserve Bank of India in 2000. Hence, the correct option is Option C i.e, Punjab and Maharashtra Cooperative Bank Additional Information: A Cooperative Bank is a bank which is governed by both banking and co-operative legislation.These banks are registered under the Cooperative Society Act 1965.
Q111
Which of the following are considered to be the four pillars of human development?
✓ Correct answer: b) Equity, productivity, empowerment and sustainability
ExplanationThe process of enlarging individual’s/people’s freedom, opportunities and their well being is called Human development.People are central to all development under this concept.Human Development has six pillars: Equity, Sustainability, Productivity, Empowerment, Cooperation, and Security.Equity is based on the moral of equality (that people should be treated equally).Sustainability is human societies that live and meet their needs without compromising the ability of future generations to meet their own needs.Productivity is a major determinant of inflation and also economic growth.Empowerment is people having the ability to make their own decisions for themselves and society.Cooperation is the process of working together for mutual benefit.Security is building people’s strength and aspirations.Hence, the answer is option (b) Equity, productivity, empowerment and sustainability.Additional Information: The Human development concept was developed by economist Mahbub ul Haq.The first Human Development report was published by the United Nations in 1990.
Q112
Normally, there will not be a shift in the demand curve when
✓ Correct answer: a) Price of a commodity falls
ExplanationKey Concept: Market Explanation: The demand curve is used in microeconomics to determine the quantity of a particular commodity that people are willing to purchase if its price changes correspondingly.It depicts the relationship between the commodity's price (y-axis) and the quantity of the demanded commodity at that price(x-axis).It will shift to the right or left as per the change in a non-price determinant of demand.Factors such as Changes in expectations, Changes in taste and preference, Rising income and Population change affects market demand.Hence, the correct option is A, i.e.'Price of a commodity falls.'
Q113
Which one of the following statements about the Repo rate is not correct?
✓ Correct answer: c) It is the rate on commercial banks' deposits with the central bank.
ExplanationKey Concept: The repo rate is a liquidity adjustment facility (LAF) mechanism through which banks borrow money from the central bank.Explanation: It is the interest rate charged by the Central Bank on overnight loans.Correct: The repo rate is the interest rate at which the central bank lends money to commercial banks, typically for short periods such as overnight, against collateral securities.It is the interest rate paid by the commercial banks on overnight borrowing.Correct: The repo rate is the rate at which commercial banks borrow funds from the central bank, and the interest they pay is determined by this rate.It is the rate on commercial banks' deposits with the central bank.Incorrect: The rate on commercial banks' deposits with the central bank is the reverse repo rate.The repo rate pertains to borrowing by commercial banks from the central bank, not deposits.It is the interest rate applied to the borrowing of funds against collateral.Correct.It is the interest rate applied to the borrowing of funds against collateral.The collateral is used to secure the loan, but the cost associated with borrowing (the interest rate) defines the repo rate.Hence, the correct option is Option C.
Q114
Which one of the following statements in the context of social sector spending in India during 2014 - 19 (both States and the Union Government together) is true?
✓ Correct answer: c) There was a stagnation in the spending on education as a percent of GDP
ExplanationKey Concept: | | Defence The central government's education budget has been cut since 2014. Despite government promises to increase spending on education, the share of union budgets devoted to education fell from 4.14% in 2014-15 to 3.4% in 2019-20. In the 2019- 20 budget, the share of the union budget devoted to education remains at 3.4%.Explanation: According to the Economic Survey, the combined spending of the federal government and the state governments on social services increased to Rs 17.16 lakh crore during the fiscal year 2020–21. At Rs 17.16 lakh, the expenditure is 12% higher than Rs 15.31 lakh (revised estimate) for 2019-20. Overall, India's public health spending (sum of central and government spending) remained between 1.2% and 1.6% of GDP during 2008-09 and 2019-20. As the study shows, social services sector expenditure in FY 2019-20 was Rs 1.531 crore, of which Rs. 6.13 lakh crore was spent on education, Rs 3.12 lakh crore on health, and Rs 6.06 crore on others.This spending is relatively small compared to other countries such as China (3.2%), US (8.5%) and Germany (9.4%).Hence, the correct option is Option C i.e, There was a stagnation in the spending on education as a percent of GDP Additional Information: For 2020-2021, the ministry received a quota of 67,112 kroner.This is an increase of 3.9% from the revised 2019-20 estimate of Rs 64,609 crore.Under the department, 97% of the department's allocation will go to the Department of Health and Family Welfare at Rs 6,501.2 crore.On the other hand, the health research department is allocated 2,100 kroner (3% of the allocation).
Q115
The mismatch in the regional or occupational pattern of job vacancies and the pattern of worker availability results in
✓ Correct answer: a) Structural unemployment
ExplanationKey Concept: The type of unemployment where there is a mismatch in the regional pattern of job vacancies and the pattern of worker availability is known as structural unemployment.Explanation: The type of unemployment where the jobs are available but there's a mismatch between what companies need and what the workers available there offer is known as structural unemployment.This mismatch can occur because the jobseekers don't have the needed skills for the available jobs or the available jobs far away from the jobseekers.It is a long-lasting unemployment that is due to shifts in a nation's economy.Hence, the correct option is Option (A) i.e, Structural unemployment.Additional Information: Disguised employment or hidden unemployment is a type of fake scenario that is different from the underlying reality, where workers appear to be employed but in reality they are not.It is a type of unemployment that does not affect aggregate economic output.
Q116
The situation where the equilibrium level of real GDP falls short of potential GDP is known as
✓ Correct answer: a) Recessionary gap
ExplanationKey concept: Recessionary gap is a term used in macroeconomics when the Real Gross Domestic Product is lesser than its potential Gross Domestic Product.Explanation: A recessionary gap also known as contractionary gap generally occurs when a Nation's real gross domestic product is lesser than its Gross Domestic Product at full employment.Contractionary gaps close when real wages are back to equilibrium and the labor demand equals the quantity supplied.Sometimes, stabilization policy is implemented by the policy makers to close the recessionary gap and increase the Real Gross Domestic Product.Hence, the correct option is Option A i.e, Recessionary gap Additional Information: Inflationary gap- An inflationary gap measures the difference between the current real GDP and the GDP of an economy operating at full employment.It is called inflationary gap due to its outcome being inflation (continuous rise in prices).
Q117
Which one of the following is true of a pure voluntary exchange between two parties A and B ?
✓ Correct answer: b) Both gain; it is a win-win situation
ExplanationA voluntary exchange is a type of exchange where two parties freely trade goods or services.This happens in a market economy where both participants interact and gain a mutual benefit from it and they improve than when they started.For example, when an individual starts tutoring students in exchange of money then he is gaining money in exchange of their expertise and the student is gaining knowledge to pass their exam.The market economies are free and the exchange of goods and services is not undergarments restrictions.It means businesses or individuals can determine the prices of their products on their own.Hence, the correct option is Option B i.e, Both gain; it is a win-win situation Additional Information: Voluntary exchange is the term given by Neoclassical economists.It was used to describe their primary assumptions of trading.This is what today we call a free market.Voluntary exchange is beneficial because participants feel that they are | | Defence in profit from the transaction hence they are encouraged to complete it organically.When government restrictions are not there a voluntary exchange can create a fair competition in the market.
Q118
According to UNDP's Human Development Report - 2020, in which of the HDI components has India improved in recent years ?1. Life expectancy at birth2. Expected years of schooling3. GNI per capita4. Mean years of schooling Select the correct answer using the code given below :
✓ Correct answer: d) 1, 2, 3 and 4
ExplanationKey Concept: According to UNDP's Human Development Report 2020, India has improved in all the four mentioned components of HDI in recent years.Explanation: Overall HDI value of India in the year 2019 is 0.649, according to which India is considered as a medium Human Development category.Indians life expectancy at birth was 69.7 years in 2019 which increased by 11.8 years since 1990. Expected years of schooling in India were 12.2 years between 1990 and 2019 the expected years of schooling increase by 4.5 years The standard of living in terms of gross national income per capita is 6681 USD in India which also increased by 273.9% between 1990 and 2019. Hence, the correct option is Option D i.e, 1, 2, 3 and 4 Additional Information: India stands at 131st out of 189 countries and territories according to Human Development Report 2020 released by United Nation development program (UNDP).
Q119
Which one of the following is the opportunity cost of a chosen activity ?
✓ Correct answer: d) Value of next best alternative that is given up
ExplanationKey Concept: Opportunity cost is defined as the cost of the next best alternative that was foregone.Explanation: It represents the sacrifices people have to make due to lack of resources.Resources are limited, but desires are limitless, so choices must be made.The opportunity cost of an activity is the value of the next best option that one must sacrifice in order to engage in that activity.Hence, the correct option is Option D i.e, Value of next best alternative that is given up Additional Information: Sunk costs cannot be ignored.The only costs that influence decisions about action are those that can be avoided if action is not taken.To properly assess opportunity cost, the costs and benefits of each available option must be considered and weighed against other options.Considering the value of the opportunity cost allows individuals and organizations to make more profitable decisions.For example, if you spend your time and money on movies, you can't spend that time at home reading a book, and you can't spend that money on something else.
Q120
The excess of total expenditure of Government over its total receipts, excluding borrowings, is known as
✓ Correct answer: b) Fiscal deficit
ExplanationKey Concept: Fiscal deficit is the term used to determine the difference between the government's total expenditure and its total receipt, including the borrowings.Explanation: The difference between the total income of the government including the total taxes and non-debt capital receipts and its total expenditure is known as fiscal deficit.A very high fiscal deficit shows that the government has been spending more than its income.Borrowing money is a method by which the government meets the fiscal deficit, hence the total borrowing requirements in a financial year are equal to the fiscal deficit in that year.Hence, the correct option is Option B i.e, Fiscal deficit Additional Information: Fiscal deficit = Total expenditure of the government - Total income of the government Fiscal Deficit = Primary Deficit + Interest Payment
Q121
Which one of the following is a typical example of monopolistic competition?
✓ Correct answer: b) Market for soaps
ExplanationKey concept: Monopoly refers to business in the market without any competition and has exclusive control of trade and supply of goods in the market.Explanation: In Monopoly market prices are fixed according to the supplier or the provider due to lack of competition in the market.Monopoly market is the downward sloping demand curve.Monopolistic competition is a market in which many companies are present and they produce similar but differentiated products or not identical products, so the best example is the market of soaps.Hence, the correct option is (B).Additional information: Duopoly refers to the market in which only two companies or competitors have the exclusive control of supply and trade of goods in the market.Oligopoly refers to the market in which many companies or small businesses are present and all have the right to supply and trade goods in the market.
Q122
Which one of the following target groups is the beneficiary of 'Garib Kalyan Rojgar Abhiyan' scheme?
✓ Correct answer: b) All returning migrants
ExplanationKey concept: Garib Kalyan Rojgar Abhiyan was launched by the Government of India on 20 June 2020, to minimize the impact of covid 19 pandemic on the all returning migrants rural worker.Explanation: Garib Kalyan Rojgar Abhiyan was launched by the P.M. Narendra Modi through video conference in the Telihar village, Kharagai district of Bihar.Main aim of this scheme is to provide employment for 67,0000 workers for 125 days who are directly affected by coronavirus.This scheme was launched in 116 District of 6 states in India Total 12 different Ministries put joint effort for this scheme.Hence, the correct option is (B).Additional information: Covid 19 is a severe acute respiratory syndrome.It is an infectious transmissible disease.The first case was reported in Wuhan, China.
Q123
The percentage by which the money the borrower pays back exceeds the money that was borrowed is called as
✓ Correct answer: b) Nominal interest rate
ExplanationKey Concept: The nominal interest rate is the percentage that is used by banks, money lenders and investment firms for borrowers to pay back.Explanation: The interest rates on consumer loans are normally called the annual percentage rate (APR).This is the percentage of repayment that lenders ask for as the ability to borrow their money.Annual percentage rate or apr is the annual cost of borrowing money.Hence, the correct option is Option B i.e, Nominal interest rate Additional Information: Bank Rate: It is the interest rate at which a country's central bank lends money to the banks generally in the form of short-term loans.The central bank directly affects economic activity by managing the bank rate.
Q124
The situation in an economy which is growing slowly along with rapid inflation (rising price level) is called
✓ Correct answer: c) Stagflation
ExplanationKey Concept: The situation where and economy is growing along with rapid inflation is called Stagflation.Explanation: Stagflation is a time period when a slowly growing economy and unemployment go hand in hand with rapid inflation.Stagflation is mainly caused by cost-push inflation.When some kind of force or condition increases the costs of production, it leads to cost- push inflation.Hence, the correct option is Option C i.e, Stagflation.Additional Information: Deflation: It is a situation where the prices of goods continue to fall.It is totally opposite of inflation.Deflation generally occurs when there is a rise in productivity, decrease in overall demand or there is decrease in overall volume of credit in the economy.
Q125
The asset or assets that a borrower pledges in order to guarantee repayment of a loan is called as
✓ Correct answer: b) Collateral
ExplanationKey Concept: Collateral is an asset that a borrower pledges as a security of repayment of a debt or loan.Explanation: A collateral is property or an asset that an individual or borrower offers as a security for a debt.If the borrower, somehow, is not able to return the agreed repayments, the lender would have the right to seize the offered asset, known as collateral.Collateral reduces the risk for the lenders.Hence, the correct option is Option B i.e, Collateral.Additional Information: There are two types of collateralized loans: Mortgages and car loans.Guarantee card: A card that is used, when we pay any cost by cheque, as proof that the bank will pay the certain money.
Q126
Which one of the following approaches of human development was initially proposed by the International Labour Organisation (ILO) and emphasised on health, education, food, water supply, sanitation and housing ?
✓ Correct answer: b) Basic needs approach
ExplanationKey Concept: The Human Development Approach The enhancement of people's lives is the primary goal of development according to the human development (HD) approach.Major facets of the technique are summarised in this publication.Explanation: Basic needs were outlined in the ILO report for the 1976 World Employment Conference in terms of housing, food, clothes, education, and public transportation.October 1919 saw the founding of the ILO.The company's main office is in Geneva, Switzerland.Guy Ryder will be the ILO's director general beginning in March 2021. Employment served as both a means and an aim, and it also encompassed decision- making.This strategy went against the norm, which was to forecast an ideal annual rate of per capita economic growth for the future.Hence, the correct answer is option (b).Additional Information:1. Welfare approach This method views people as the beneficiaries of development efforts.The strategy supports greater public spending on facilities, amenities, and amenities.2. Income approach One of the earliest theories of human development is this one. | | Defence The progression of humanity is believed to be related to wealth.The level of human development rises in direct proportion to wealth levels.3. Capability approach Prof. Amartya Sen is credited for developing this approach.Increasing human development requires strengthening human capacity in the areas of health, education, and resource access.
Q127
Exchange rates state the value of one currency in terms of other currencies. Which one of the following statements with respect to the exchange rate of currency is correct?
✓ Correct answer: b) Fixed exchange rates are rates set by Government decisions and maintained by Government actions
ExplanationKey Concept: The Fixed Exchange Rates are set by Government decisions and maintained by Government actions and it is the value of one country's currency versus the currency of another country.Explanation: Mostly the exchange rates are free floating and they can increase or decrease based on the supply and demand in the market.And there are some currencies which are not free floating and have restrictions.There are a few types of exchange rates: Free floating Restricted currencies Currency peg Onshore versus Offshore Hence, the correct option is Option B i.e, Fixed exchange rates are rates set by Government decisions and maintained by Government actions Additional Information: Floating exchange rate- it is a rate based on the private market by supply and demand.This is opposite to a fixed exchange rate where the government entirely determines the rate.
Q128
Which of the following measures should be taken when an economy is going through inflationary pressures?1. The direct taxes should be increased.2. The interest rate should be reduced.3. The public. speñding should be increased. Select the correct answer using the code given below :
✓ Correct answer: a) 1 only
ExplanationKey concept- What is inflation and what are ways to control the same?Explanation Inflation refers to increase in price of goods and services or reduction in the value of currency.Inflation generally occurs when too much money chases few goods i.e the money supply in the market is high as well as demand for goods and services is high while availability of goods and services is low.So inorder to control inflation, we need to reduce money supply and public spending in the market.If government increases the direct tax, it will reduce income of individuals and therefore will reduce money supply in the market.This will therefore control the inflation.Hence, statement 1 is correct.If government lowers the interest rates, it becomes easier and cheaper to borrow money and therefore increases money supply and spending in the economy.This step will again boost the already existing inflation.Hence, statement 2 is incorrect.If government increases public spending, it will increase the money supply in the market, | | Defence which in turn will boost the inflation.So government reduces the public spending to control inflation.Hence, statement 3 is incorrect.Hence, the correct answer is option (a)
Q129
The increase in private investment spending induced by the increase in Government spending is known as
✓ Correct answer: a) Crowding in
ExplanationKey Concept: Crowding is a situation when high government spending leads to a growth in private sector investment because there are more profitable investments opportunities.Explanation: When the government spends highly by borrowing it leads to two possible effects- crowding in or crowding out.Crowding in- this is related to a situation when higher government spending encourages private forms to invest more full stop.This occurs because of the income effect of higher government spending.If the economy of the country is going through recession, crowding in can be very helpful increasing the private sector Investments.Hence, the correct option is (a).Additional Information: Crowding out- higher government spending is when financed by the borrowing it leads to decrease in savings of the private sector.
Q130
Which one of the following is not a function of money ?
✓ Correct answer: d) Used for regulating consumption
ExplanationKey Concept: Money is not used for regulating consumption.Money is used as a medium of exchange, as a store of value, and as a unit of account.Explanation: The most important function of money is as a medium of exchange to help in transactions.Money should hold value over time, hence must be a store of value.Money also works as a unit of account, by providing a common measure of the value of goods and services.Hence, the correct option is Option D i.e, Used for regulating consumption Additional Information: Barter system is an exchange of goods or services.A barter exchange is a method in which people contract with each other to exchange property or goods according to their needs.
Q131
Which one of the following may lead to movement along the demand curve of a commodity ?
✓ Correct answer: a) Change in its price
ExplanationKey Concept: A change in the price of a product leads to a movement along a specific demand curve and it generally causes some change in the demand of the product but it does not shift the demand curve.Explanation: A demand curve graphically represents the relationship between price of the product and the quantity of the product demanded.There is a shift in the demand curve whenever a determinant of demand other than the price of the product changes.Even when the price remains the same, there should at least one of the Other five determinants of the demand change.Hence, the correct option is Option (A) .Additional Information: The other five determinants of the demand are- Income of the buyer Consumer taste and preferences Expectations of future changes of goods, supply, needs etc Price of products Number of potential consumers
Q132
Consider the following statements about the Micro, Small and Medium Enterprises (MSMEs) :1. The MSMEs comprise a dynamic sector of the Indian economy, providing large employment opportunities.2. MSMEs require low capital costs and help the industrialization of backward regions.3. MSMEs contribute enormously to socio- economic development. Which of the above statements is/are correct?
✓ Correct answer: d) 1,2 and 3
ExplanationKey Concept: MSME stands for Micro, Small and Medium Enterprises.MSMEs are businesses that produce, process, and preserve goods and commodities.These are broadly classified based on their investment in plant and machinery for manufacturing or equipment for service enterprises, as well as their annual turnover.MSME Regulation in India: In 2007, the Ministry of Small-Scale Industries and the Ministry of Agro and Rural Industries merged to form the Ministry of Micro, Small, and Medium Enterprises.This ministry develops policies, facilitates programs, and monitors implementation to support MSMEs' growth.The Micro, Small, and Medium Enterprises Development Act of 2006 addresses various issues affecting MSMEs, establishes a National Board for MSMEs, defines the concept of "enterprise," and empowers the Central Government to enhance MSME competitiveness Explanation: Being a diverse sector in the Indian economy, it provided a large scale of enterprises.It requires low-cost capital.MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost but also help in industrialization of rural & backward areas, thereby, reducing regional | | Defence imbalances, assuring more equitable distribution of national income and wealth.Hence, the correct answer is option D.
Q133
During 2020-21, when India was passing through the adverse effects of COVID-19, which one of the following sectors witnessed positive growth ?
✓ Correct answer: b) Electricity, gas, water supply, and other utility services
ExplanationExplanation- During 2020-21 India was hit by Covid - 19 A contagious illness called Covid - 19 (coronavirus disease) is brought on by the SARS-coV-2 virus.It is an epidemic by which the whole world shook.Because of the lockdown many sectors got affected but electricity, gas, water supply, and other utility services show positive growth.Hence, the correct option is ‘b’ i.e. Electricity, gas, water supply, and other utility services
Q134
Which one of the following is the first State in India to have 100 percent households with tap water connection?
✓ Correct answer: b) Goa
ExplanationKey points- Under Jal Jeevan Mission, Goa is the first state to have 100% households with a tap water connection.Explanation- Goa is the first State in India to have100% households with tap water connection in the rural areas covering 2.30 lakh households.The main purpose of the Jal Jeevan Mission of the central government is to provide piped water to all rural households by 2024. Hence, the correct option is ‘B’ i.e. Goa.
Q135
Consider the following statements regarding e- RUPI prepaid digital vouchers :1. The maximum amount of e-RUPI is rupees one lakh.2. Beneficiaries can receive e-RUPI without having a bank account.3. To receive e-RUPI on mobile phones, beneficiaries need a smart phone with Internet connection. Which of the statements given above is/are correct?
✓ Correct answer: a) 1 and 2
ExplanationKey points- e-RUPI prepaid digital vouchers:- The Reserve Bank of India on Thursday increased the maximum amount of e-RUPI prepaid digital vouchers from ₹10,000 presently to ₹1 lakh.RBI Governor Shaktikanta Das declared that the e-RUPI voucher can be used more than once till the amount is all redeemed.Explanations: It is mainly a digital voucher, which a beneficiary gets on his phone by an SMS or QR code.New instructions for e- RUPI as issued by RBI in February 2022. The maximum quantity of e- RUPI from Rs. 10,000 to Rs. 1 lakh.The voucher can be used more than once, until the amount is completely redeemed.Beneficiaries can get e-RUPI, even without having a bank account.Hence, the correct answer is option ‘A’. i.e Both 1 and 2.
Q136
Which one of the following statements about Non-Banking Financial Companies (NBFCs) is not correct?
✓ Correct answer: b) NBFCs cannot give loans.
ExplanationExplanation- NBFcomes under the Company Act of 1956. In comparison with banks NBFC cannot accept demand deposits.They cannot issue cheques drawn on themselves They can give loans such as home loans.They lend and made investments.They cannot offer the deposit insurance facilities of Deposit Insurance and Credit Guarantee Corporation.Hence, the correct option is (B).
Q137
The Department for Promotion of Industry and Internal Trade (DPIIT) has revised the base year index of Eight Core Industries having a combined weight of about 40 - 27 percent in the Index of Industrial Production. Which one of the following is not one of the Eight Core Industries ?
✓ Correct answer: c) Rubber products
ExplanationExplanation- Eight core Industries contain1. Coal2. Crude oil3. Natural gas4. Refinery Products5. Fertilizers6. Steel7. Cement8. Electricity Eight core industries account for 40.27n% of the weight of of items included in the Index of Industrial Production(IIP).Hence, the correct option is ‘C’ i.e. Rubber products.
Q138
Which one of the following forms of money supply is considered as the most widely used in the Indian monetary system ?
✓ Correct answer: c) M3
ExplanationKey points- The total amount of money in an economy at any given time is called the Money supply.Explanation- Price level (inflation) and interest rates on deposits & loans are two factors where Money supply plays a crucial role M3 (Aggregate monetary resources) the most widely used in the Indian monetary system.M1= currency with public + demand deposits in Bank M2 = M1+ Saving deposits of post office savings banks M3= M1+ Time deposits with the banking system M4= M3+ All deposits with the post office savings banks.Hence, the correct option is ‘C’ i.e. M3.
Q139
Which one of the following does not influence quantity demanded for a good?
✓ Correct answer: d) Prices of inputs into production of the good
Explanationthe demand of goods- it is an economic principle that refers to a consumer's desire to buy goods and services and his willingness to pay a certain amount of money for a particular good or service.The factors that directly affect the demand or the shift in demand are income of the consumer, buyers taste and preferences, expectation of future prices and supplies, the price of its related goods and the number of potential consumers.Hence, the correct option is Option (D) i.e, Prices of inputs into production of the good.Additional Information: The consumers buy more of a product which is low priced and less of a product which is at high price.This inverse relationship between the price of the product and the amount of buyers who are willing to buy that product is referred to as the Law of Demand.Demand curve is a graphically represented relationship between the price of the product and the quantity of the product demanded by the buyers.
Q140
Which one among the following reports defines: Sustainable Development as development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs?
✓ Correct answer: a) Brundtland Report
ExplanationExplanation- The Brundtland Report, officially known as "Our Common Future," was published by the World Commission on Environment and Development in 1987. The report is widely recognized as a landmark document in the history of sustainable development.The report defined sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs." The Brundtland Report helped to raise awareness of the need for sustainable development and has been influential in shaping international agreements and policies, including the 1992 United Nations Conference on Environment and Development (UNCED) and the subsequent adoption of Agenda 21, a comprehensive plan of action to build a global partnership for sustainable development.Hence, the Correct option is A i.e. Brundtland report.
Q141
Which one of the following Labour Codes notified by the Government of India incorporated various provisions of the Central Labour Acts such as the Factories Act, 1948 and Plantations Labour Act, 1951?
✓ Correct answer: a) The Occupational Safety, Health and Working Conditions Code, 2020
ExplanationKey points- There are four Labour Codes In India namely, the Code on Wages 2019, the Industrial relation Code 2020, the Code on Social Security 2020 and the occupational, safety, Health, and working Conditions Code,2020. Explanation- The Occupational Safety, Health and Working Conditions Code,2020 incorporated various provisions of the Central Labour Acts such as the Factories Act,1948 and Plantations Labour Act .Aim: To amend the laws governing the occupational safety, healthy and working conditions of the persons employed in an establishment.Hence, the correct option is ‘A’ i.e. The Occupational Safety, Health and Working Conditions Code, 2020.
Q142
Who among the following formulated the concept of poverty as a measurable development indicator in the Indian subcontinent?
✓ Correct answer: a) Dadabhai Naoroji
ExplanationKey Concept: The earliest estimation of poverty line was made by Dadabhai Naoroji in his book poverty and unbritish rule in India.Explanation: Dadabhai Naoroji in his book "Poverty and Un-British Rule in India" mentioned the estimation of poverty line.He estimated Rs.16 to Rs.35 per capita per year.The poverty line he proposed was entirely based on the cost of a subsistence or minimum basic diet.Poverty Estimation is a method commonly used to estimate poverty in India and it is based on income or consumption level.If the consumption or the income per capita Falls below a given minimum level then the household is said to be below the poverty line or BPL.In India now, Poverty Estimation is carried out by NITI Aayog's force by the calculation of the poverty line based on the data recorded by the National Sample Survey office.Hence, the correct option is (a).Additional Information: Professor Vijendra Kasturi Ranga Varadaraja Rao was a multi-talented personality, an economist, an educationist, an | | Defence administrator and an intuition builder.Mahadev Govind Ranade was born in 1842, in Nashik Maharashtra, he passed his Lord degree and then he was appointed as a judge at Bombay High Court he was one of the members who founded Prarthana Samaj.Romesh Chandra Dutt was seen as a national leader of the pre Gandhian era.He was a contemporary of Dadabhai naoroji and Justice Ranade.He, broadly known as RC Dutt, was a Civil Servant, political leader, economic thinker and a writer.
Q143
Among the following countries, where did the idea of 'Social Market Economy' emerge in 1950?
✓ Correct answer: a) Germany
ExplanationKey concept: Social market economy Explanation The idea of 'Social Market Economy' first emerge in Germany Hence, the correct answer is option(A) i.e, Germany.Additional Information After the nazi regime, there is a realization that if the gap between rich and poor will be wide then there are the chances of the rise of extreme policies( right wing or left wing) therefore every citizen should get the economic stability and growth and hence the concept of social market economy emerged
Q144
While forming the 'Indo-Pacific Economic Framework for Prosperity', the member countries launched collective discussions towards future negotiations on four pillars. Which one of the following is not one of those pillars?
✓ Correct answer: b) Defense cooperation and intelligence sharing
ExplanationExplanation- Indo-Pacific Economic Framework for Prosperity(IPEF) has four pillars-1. Clean energy, decarbonization, and infrastructure.2. Supply chain.3. Tax and anti-corruption.4. Trade It is an initiative between the US and 13 other member countries e.g. India, Australia, etc strive toward a connected, resilient, clean, and fair economy.Hence, the correct option is ‘B’ i.e. Defense cooperation and intelligence sharing.
Q145
Which one of the following statements with regard to the National Rural Employment Guarantee Act, 2005 is correct?
✓ Correct answer: d) This is implemented only in rural areas of India.
ExplanationThe Mahatma Gandhi National Rural Employment Guarantee Act was earlier known as National Rural Employment Guarantee Act which was passed in 2005 to secure Employment in India.This scheme works under the Ministry Of Rural Development and it is a demand driven wage employment scheme.Any adult member of a household in a rural area in India with a job card is eligible for a job under this scheme.This scheme secures 100 days of guaranteed wage employment in a financial year to every adult member who is eligible for this scheme.Every district in India comes under this scheme accept those who have 100% Urban population Hence, the correct option is Option (D) i.e, This is implemented only in rural areas of India.Additional information: 56% of the MGNREGA workers are women.Unlike the minimum wages, under MGNREGA, men and women both are paid equal wages.
Q146
The Insolvency and Bankruptcy Board of India (IBBI) was established in the year
✓ Correct answer: c) 2016
ExplanationKey Concept: On October 1st, 2016, the Insolvency and Bankruptcy Board of India (IBBI) was created.The IBBI amends and regulates the laws relating to Bankruptcy Code, 2016. Explanation: It was formed under Insolvency and Bankruptcy Code, 2016. Hence, the correct answer is Option (c).
Q147
Which one of the following assists a country through 'Extended Fund Facility', often talked about in the news
✓ Correct answer: b) International Monetary Fund
ExplanationKey Concept:- The International Monetary Fund (IMF) is a major financial agency of the United Nations and an international financial institution, with its headquarters in Washington, D.C. Explanation:- When a country faces serious medium- term balance of payments problems because of structural sins that bear time to address, the IMF can help through an Extended Fund Facility( EFF).Compared to backing handed under the Stand- by Arrangement, backing under an extended arrangement features longer program engagement — to help countries apply medium- term structural reforms and a longer prepayment period.Hence, the correct answer is Option ‘B’ i.e., International Monetary Fund.
Q148
Infant mortality ratio of which one of the following countries is comparable to that of India?
✓ Correct answer: d) None of the above
ExplanationIndia's infant mortality rate is 32 infant deaths per 1,000 live births.India is neither in the top countries with the highest infant mortality rate nor in those countries which have the lowest infant mortality rate.Infant mortality rate has decreased and it indicates an increase in medical care facilities and hygiene.It also shows decrease in female infanticide.Hence, the correct option is Option D i.e, None of the above.Additional Information: Globally the infant mortality rate is 29 dates per 1000 live births in 2018 it was calculated 65 deaths per thousand live births in 1990. The infant mortality rate in the United States is 5.8 and in China it is 5.5 per 1000 like birth calculated in 2020. In Sri Lanka this rate is 5.9 deaths per thousand live births.
Q149
Recently, the term 'two-pillar solution/two- pillar package' often seen in the news, refers to
✓ Correct answer: c) Minimum global corporate tax
ExplanationThe first pillar's objective is to ensure a better distribution of taxation of multinationals as per the countries in which they operate.The second Pillar aims to reduce tax competition on corporate profits.It will be done by starting a global minimum tax of 15% from 2023. After implementation it will have the potential to solve the complex problems of the very old-existing international tax system.It will also help in making it compatible with the digital revolution going on nowadays.Hence, the correct option is Option (C) i.e, Minimum global corporate tax.Additional Information: OECD stands for Organization for Economic Cooperation and Development.OECD is an international organization that aims to build better policies for better lives.OECD has 38 member countries which are inter- governmental, it was founded in 1961 to start the economic progress and world trade.
Q150
Which one of the following statements about a borrower from a Microfinance Company is not correct?
✓ Correct answer: d) The borrower should not refuse to pay any rate of interest offered.
ExplanationExplanation- Like a bank, a microfinance company is a provider of credit.The borrower is generally from a low-income background.Loans under Microfinance Companies are small loans i.e. micro finance.Microfinance loans do not require collateral.These loans are generally repaid at higher interest.Hence, the correct option is ‘D’ i.e.the borrower should not refuse to pay any rate of interest offered.
Q151
Who among the following, first mooted the idea of deficit financing?
✓ Correct answer: c) John Maynard Keynes
ExplanationKey Concept: John Maynard Keynes first mooted the idea of deficit financing.He used it as a compensatory spending measure to solve the problem of unemployment and depression.Explanation: Deficit Financing can be defined as a practice where the government's higher spending exceeds its received as a revenue, the difference being made up by borrowing.It generally occurs when the total income of the government falls below its total expenditure.This deficit is financed by borrowing money from the central bank or commercial banks by the government.The government generally withdraws money from its deposits in the Reserve Bank of India or asks the RBI to print new currency notes or sometimes it lends money from the public in the form of bonds or security.Hence, the correct option is Option C i.e, John Maynard Keynes Additional Information: Adam Smith was a Scottish economist and he is also known as the Father of economics or the Father of capitalism.Adam Smith has done impressive work in The theory of moral sentiments, 1759 An enquiry into nature and causes of the wealth of nations, 1776 Alfred Marshall - The general principles of pricing were given by Alfred Marshall and a textbook named, Principle of Economics by Alfred Marshall was published in 1890.
Q152
Which one of the following would be considered as Foreign Direct Investment?
✓ Correct answer: d) A foreign entity setting up an educational institution in India
ExplanationForeign direct investment (FDI) is a type of international investment in which an investor of one economy establishes a interest in and influence over a company resided in another country.Foreign direct investment is different from the foreign portfolio investments where the foreign firm buys equity shares of a company.FDI includes following- Subsidiaries of foreign companies in India Majority of a liquidity holding in Indian companies Day to day operations of the company It is a major source of non debt financial resources Companies are exclusively financed by foreign companies Hence, the correct option is Option (D) i.e, A foreign entity setting up an educational institution in India.Additional Information: A few industries where the FDI is strictly prohibited under any circumstances.These industries are atomic energy generation, gambling business, lotteries, investment in chit funds, nidhi company, agriculture plantation activities, cigar cigarettes or any tobacco industry, etc.
Q153
Which of the following factors signify monopolistic competition ?1. Differentiated products2. Large number of buyers and sellers3. Barriers to entry4. Homogeneous products Select the correct answer using the code given below :
✓ Correct answer: a) 1 and 2 only
ExplanationMonopolistic competition- it is a type of imperfect competition where many firms sell products and services that are similar to each other but are not substitutes of each other.In this type of competition more than one firm cell differentiate products that can arise from characteristics of goods or services, the location from which the farm is selling the products or intangible aspects or perceptions about the products.These many firms offer the products which are similar but not identical and there is easy entry and exit of the firms in the market.Hence, the correct option is Option (A) i.e, 1 and 2 only.Additional Information: Economic market can be divided into four types: perfect competition, monopolistic competition, oligopoly, and monopoly.These categories are different because of the difference in the number of producers which is many in perfect and monopolistic competition, few in oligopoly, and one in monopoly.
Q154
Which one of the following terms denotes the inputs in terms of tools, machines, buildings, raw materials and money in hand required at any stage of production ?
✓ Correct answer: c) Physical capital
ExplanationPhysical capital is generally defined as tools, machines and buildings.The tools and machines either very simple like farmers plough or very sophisticated machines such as the turbines, computers, generators etc all come under physical capital.Production of any good requires a variety of raw materials such as cloth for a textile company or yarn used by a weaver or the clay used by the potter.And some money is always needed in hand during the work of production to make necessary payments or to buy items.Hence, the raw materials and money in hand are known as working capital.These raw materials are used up in the production, not like the tools, machines and buildings.Hence, the correct option is Option (C) i.e, Physical capital Additional Information: Human capital means the group of people who are required to work at the production center full stop.These people should be equipped with required education and skills used during the production.
Q155
Which one of the following is not a permanent member of the United Nations Security Council?
✓ Correct answer: c) Japan
ExplanationKey Concept: The United Nations Security Council was established by the UN Charter in 1945. UNSC is one of 6 principal organs of the United Nations.The principal organs of the United Nations are the General Assembly and Trusteeship Council.Economic and Social Council, International Court of Justice and Secretariat.Explanation: The primary role of the UN is to maintain International Peace and Security.The head of UNSC is located in New York.UNSC has 15 members, i.e. 5 Permanent members and 10 non-permanent members.5 permanent members are the United States of America, France, China, Russia and the United Kingdom.India is a non-permanent member of the UNSC.Hence, the correct option is (C).
Q156
Which of the following are the effects of devaluation or depreciation of currency?1. It lends to an increase in imports and a decrease in exports2. It leads to an increase in exports and a decrease in imports.3. It leads to an increase in domestic inflation.4. It lends to a decrease in domestic inflation Select the correct answer using the code given below :
✓ Correct answer: c) 2 and 3 only
Explanation| | Defence Key Concept: A devaluation is an act of government declaring its currency as less valuable than other currencies.Explanation: Effects of Currency Devaluation Explanation Reduces export costs for a country, making its goods more competitive globally Currency devaluation lowers the relative price of a country's exports, making them more attractive to foreign buyers and potentially boosting export demand.Increases the cost of imports, making foreign goods relatively more expensive for domestic consumers Devaluation raises the price of imported goods, dampening domestic demand for foreign products, potentially reducing import volumes.Enhances competitiveness in international markets Cheaper exports due to devaluation can improve a country's position in global markets, increasing its share of international trade and potentially boosting export revenues.Helps narrow the trade deficit by increasing export revenues and decreasing import expenditures Devaluation can help reduce the trade deficit by stimulating exports and discouraging imports, improving the balance between export earnings and import spending.Effects of Currency Devaluation Explanation Contributes to domestic inflation by raising the prices of imported goods The increased cost of imports following a currency devaluation can contribute to inflation domestically as consumers and businesses face higher prices for foreign goods.Offers protection to domestic industries from foreign competition Higher import prices due to devaluation can make domestic goods more competitive than foreign alternatives, providing a shield against foreign competition.May reduce incentives for domestic industries to improve productivity and efficiency due to reduced competition from imports Protection from foreign competition resulting from devaluation may reduce the pressure on domestic industries to innovate and improve efficiency, potentially leading to stagnation.Can spur aggregate demand through increased exports, potentially fueling long-term inflation Devaluation-induced export growth can boost overall economic activity, potentially leading to higher inflation if not accompanied by measures to control demand or increase production | | Defence Hence, the correct option is C, i.e. '2 and 3.'
Q157
Which of the following concepts are considered pillars of the Human Development ?1. Equity2. Sustainability8. Productivity4. Security Select the correct answer using the code given below:
✓ Correct answer: c) 1,2 and 3 only
ExplanationKey concept: Human Development is a process of extending opportunities, livelihood, and improvement of well-being.Mahbub ul Haq introduced the concept of human development.Explanation: The Main Pillars of the Human Development Index are:1. Equity: To make access to opportunities available to everyone.2. Productivity: Human labour productivity.3. Sustainability: Continues availability of opportunities.4. Empowerment: Having the power to make choices.Hence, the correct option is C, i.e. '1,2,3'
Q158
Which one of the following taxes is not subsumed under the Goods and Services Tax in India?
✓ Correct answer: d) Taxes on Petroleum and Petroleum Products
ExplanationKey Concept: Goods and Services Tax (GST) was introduced on 1 July 2017. Many central and state indirect taxes are subsumed in GST.Explanation: GST is a destination-based tax and GST Council is responsible for increasing and decreasing tax slabs and transferring subjects from one slab to another.Goods that are beyond the scope of GST are High-speed diesel, Natural Gas, Aviation fuel, Petroleum and Petroleum Products, and Liquor.Some Central taxes subsumed under GST are Central Excise duty, Service Tax, Central Surcharge and Cess, Customs duties excise duties, etc. Some State taxes subsumed under GST are the Central Sales tax, State VAT, Advertisement tax, Purchase tax, Tax on gambling, betting, and lotteries, Entertainment Tax, Octroi tax, and Entry tax.Hence, the correct option is D i.e. 'Taxes on Petroleum and Petroleum Products.'
Q159
Which one of the following expenditure is subtracted from the Fiscal Deficit to arrive at the Primary Deficit?
✓ Correct answer: c) Interest payments
ExplanationKey Concept: Primary Deficit is the difference between the current year's fiscal deficit and interest payment on earlier borrowings.Explanation: Aspe ct Details Defi nitio n The difference between the current year's fiscal deficit and interest payments on earlier borrowings.Also, the difference between current spending on goods and services and total current revenue | | Defence Aspe ct Details from all types of taxes net of transfer payments.Calc ulati on Meth od Primary Deficit = Total Revenue - Total expenditure excluding interest payments on its debt.Com pone nts of Calc ulati on Total Revenue: All revenue collected by the government, including taxes and other income.Total Expenditure: Government spending on goods, services, and transfer payments.Interest Payments: Payments made by the government on borrowings from creditors.Signi fican ce Indicates a government's fiscal health by showing how much of its spending is covered by revenue, excluding interest payments on debt.The primary deficit is an important indicator of a government's fiscal position.It shows whether the government can meet its expenses from revenue sources, excluding interest payments on debt.Hence, the correct option is C, i.e. 'Interest Payments.'
Q160
The sustained decrease in the general price level is called as
✓ Correct answer: a) deflation
ExplanationDeflation is the sustained decrease in the general price level of goods and services in an economy over a period of time.This means that the purchasing power of money increases as prices fall.Deflation can occur due to various factors, such as a decrease in demand, technological advancements leading to lower production costs, or tight monetary policy.It is the opposite of inflation, where prices generally rise over time.Hence the correct answer is option A
Q161
Which of the following is/are United Nations Sustainable Development Goal(s)?1. Decent work and economic growth2. Peace, justice, and strong institutions3. Responsible consumption and production Select the correct answer using the code given below :
✓ Correct answer: b) 1,2 and 3
Explanation"The Sustainable Development Goals agenda was accepted by all members of the United Nations in 2012 at the Rio De Janeiro Council Meet with an aim to promote a healthy and developed future of the planet and its people.It was in 2015 when the Sustainable Development Goals were implemented after a successful fifteen-year plan of development called the Millennium Development Goals.
Q162
The Wholesale Price Inflation has increased in India during 2021-2022 due to which of the following factors?1. Sharp increase in international pricen of crude oil2. Decrease in economic activity post-Covid3. Disruption of global supply chain4. High freight cost Select the correct answer using the code given below :
✓ Correct answer: d) 1 and 4 only
ExplanationKey Concept: The Wholesale Price Index is a measure of changes in the price of goods sold and traded in bulk by wholesale businesses to their businesses.The Consumer Price Index measures price changes from a retail buyer's perspective.Explanation: The Office of Economic Advisor releases WPI, and CPI is released by the Central Statistical Office.As per PIB data, Wholesale Price Inflation based on the Wholesale Price Index rose to 12.5% during 2021-22 (From April to December.Factors responsible for this increase are:1. Low Base in the previous year.2. The sharp increase in International crude oil prices and other inputs.3. High freight costs4. Pick up in economic activities.Hence, the correct option is D, i.e. '1 and 4 only.'
Q163
Which one of the following indicators is included in the National Multidimensional Poverty Index (MPI)?
✓ Correct answer: a) Years of schooling
ExplanationEach dimension of poverty in the provided list represents an aspect of well-being or living standards.The indicators associated with each dimension are used to assess whether a household is deprived in that particular aspect.Here's an explanation:1. Nutrition: This dimension focuses on the nutritional status of individuals within the household.A household is considered deprived in this dimension if there is an undernourished adult under 70 years of age or a child.2. Health: This dimension concerns the health status of individuals within the household.A household is considered deprived if any child under the age of 18 years has died in the five years preceding the survey, indicating high child mortality.3. Years of schooling: This dimension reflects the educational attainment within the household.A household is considered deprived if no member aged 10 years or older has completed at least six years of schooling.4. Education attendance: This dimension assesses school attendance among school-aged children.A household is considered deprived if any school-aged child is not attending school up to the age at which he/she would complete class8.5. Cooking Fuel: This indicator relates to the availability of clean energy sources for cooking.A household is considered deprived if it relies on inefficient or polluting cooking fuels like dung, wood, charcoal, or coal.6. Sanitation: This dimension evaluates access to proper sanitation facilities.A household is considered deprived if its sanitation facility is not improved according to SDG guidelines or if it is shared with other households.7. Standard of living: This dimension encompasses various aspects such as access to clean water, electricity, adequate housing, and asset ownership.A household is considered deprived if it | | Defence lacks improved drinking water access, electricity, adequate housing materials, or ownership of essential assets.These dimensions and associated indicators collectively provide a comprehensive understanding of multidimensional poverty, capturing various aspects beyond just income.Each indicator contributes to identifying different facets of poverty, allowing policymakers to target interventions effectively.Hence the correct answer is option A.
Q164
SDG: India Index, developed by NITI Aayog. Includes 17 SDGs for each state. Which one of the following is not included in that index?
✓ Correct answer: b) Reduced unemployment
ExplanationKey Concept: NITI Aayog releases the SDG India Index.It is a document of progress made by States and UTs of India towards achieving the 2030 SDG targets.Explanation: India spans 16 out of 17 SDGs in the 2018 index.The SDG India index is developed with the Ministry of Statistics and Programme Implementation(MoSPI), the Global Green Growth Institute, and the UN.States are given scores as follows: Aspirant :0-49 Performer:50-64 Front Runner:65-99 Achiever:100 Hence, the correct option is B i.e.' Reduced Unemployment.'
Q165
Other things remaining constant, the marke supply for a good increases if:1. its price increases2. price of its factors of production decreases.3. price of other goods decreases Select the correct answer using the code given below
✓ Correct answer: d) 1,2 and 3
ExplanationKey Concept: According to the Law of Supply, when the price of a good increases, its supply also increases, and its demand decreases until an equilibrium is established.Explanation: When the price increases then sellers start to produce more goods which increases the supply.When the price of production factors like labour, land, and capital decreases, the cost of production also decreases, leading to more production and more goods in the market.When the price of other complementary goods (goods which are used jointly) decreases then there will be increased demand of its complement and hence, the market supply of other goods also increases in the market.Hence, the correct option is D i.e. '1,2,3.'
Q166
Which of the following policies help to raise interest rate unambiguously and thereby lead to appreciation of currency?
✓ Correct answer: d) Contractionary monetary policy and expansionary fiscal policy
ExplanationContractionary monetary policy involves measures taken by the central bank to reduce the money supply or increase interest rates.This typically involves actions like raising the central bank's policy interest rate, selling government securities, or increasing reserve requirements for banks.These actions aim to reduce the availability of credit and money in the economy, leading to higher interest rates.Higher interest rates attract foreign capital as investors seek better returns on their investments.Increased demand for the domestic currency to invest in higher-yielding assets leads to an appreciation of the currency.On the other hand, expansionary fiscal policy involves increasing government spending or reducing taxes to stimulate economic activity.While this policy might initially put downward pressure on interest rates due to increased government borrowing, the simultaneous contractionary monetary policy would outweigh this effect by raising interest rates.Thus, the combination of contractionary monetary policy (raising interest rates) and expansionary fiscal policy (increased government spending or tax cuts) helps to unambiguously raise interest rates and lead to the appreciation of the currency.Hence the correct answer is option D.
Q167
What would be the impact on the economy if people start holding more currency in hand and less in deposits?
✓ Correct answer: b) Money multiplier will decrease
ExplanationKey Concept: The money multiplier is a concept which measures the amount of money created by banks with the help of deposits after excluding the amount set for reserves from the deposits.Explanation: As people start holding more money as cash in their hands, there will be less money to deposit in the bank.The capacity of banks to lend money will also decrease in this situation.Liquidity and money supply in the economy will decrease.In this situation, the Money multiplier will decrease.Hence, the correct option is (B).
Q168
The unemployment that occurs due to changes in the technology or in the demand for particular products is called
✓ Correct answer: b) structural unemployment
ExplanationStructural unemployment occurs due to shifts in the structure of an economy, such as changes in technology, consumer preferences, or the composition of industries.These changes can lead to certain skills becoming obsolete or industries shrinking, causing workers to become unemployed.Unlike frictional unemployment, which occurs due to temporary transitions between jobs, structural unemployment arises from more fundamental changes in the economy's structure.Hence the correct answer is option B.
Q169
Consider the following statements regarding poverty in India:1. The poverty line in India is based on minimum requirements for food, clothing, fuel, education, and healthcare.2. India's accepted average calorie requirement is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas. Which of the statements given above is/are correct?
✓ Correct answer: c) Both 1 and 2
ExplanationKey Concept: An individual is considered to be poor if his/her income or consumption level falls below the minimum level that he/she is not able to fulfill their basic needs.Explanation: The poverty line in India is determined based on factors such as food requirements, clothing, footwear, fuel, light, medical, and educational requirements for subsistence.The present estimation of the poverty line is based on calorie requirements.The accepted average calorie requirement in rural areas is 2400 calories per person per day, and in urban areas, it is 2100 calories per person per day.The Alagh Committee, the Lakdawala Committee, the Tendulkar Committee, and the Rangrajan Committee are related to poverty estimation in India.Presently, poverty line calculation in India is carried out by NITI Aayog's task force based on the data of the National Sample Survey Office.Hence, the correct option is C i.e. 'Both 1 and 2.'
Q170
The contraction of private investment spending due to deficit spending by the Government is called
✓ Correct answer: a) crowding out
Explanation| | Defence Crowding out refers to a situation in which increased government spending, often financed through borrowing, reduces private investment spending.When the government borrows funds to finance its deficit spending, it competes with the private sector for available funds in the financial markets.This increased demand for funds tends to raise interest rates.Higher interest rates make borrowing more expensive for businesses and individuals, reducing their willingness and ability to invest in new projects or make purchases, thus crowding out private investment.Therefore, the contraction of private investment spending due to government deficit spending is referred to as crowding out.Hence the correct answer is option A.
Q171
Which of the following action(s) by the Government would lead to contraction of money supply in the economy?1. Purchase of Treasury Bills by the central bank from public.2. Sale of Treasury Bills by the contral bank to public.3. Sale of foreign exchange by the central bank.4. Purchase of foreign exchange by the central bank. Select the correct answer using the code given below :
✓ Correct answer: c) 2 and 3 only
ExplanationTreasury bills are a short-term tool used by RBI to regulate the total money supply in the economy.These are zero coupon interest-free securities 4 types of treasury bills are 14 days,91 days,182 days, and 364 days.Sale of treasury bills by the central bank to the public: When the central bank sells treasury bills to the public, it takes money out of the economy, thus contracting the money supply.To maintain the fixed exchange rate, the central bank must intervene and sell foreign exchange to buy domestic currency.The foreign exchange market intervention will decrease the domestic money supply and shift the LM curve back to LM to restore the initial equilibrium at e. Hence, the correct option is (C).
Q172
Consider the following statements about the Public Distribution System :1. The Public Distribution System is operated under the joint responsibility of Centre and State/Union Territories.2. Food Corporation of India has assumed the responsibility for procurement, storage and transportation of food grains to the State Governments.3. Both Centre and State have the joint responsibility to identify eligible beneficiaries.4. Some States also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oil, ete. Which of the statements given above are correct?
✓ Correct answer: b) 1,2 and 4
ExplanationThe Public Distribution System is a food security system that is established under the Ministry of Consumer Affairs, Food, and Public Distribution.It is a system of management of scarcity of food through the food grains distribution at affordable prices.It ensures Food and Nutritional security in the country.It is operated under the combined responsibility of Central and State governments.Buffer stocks of food grains are maintained in the warehouses under this scheme.FCI(Food Corporation of India) is responsible for the procurement, storage, transportation, and allocation of food grains to state governments.State government is responsible for identifying beneficiaries, issuing ration cards, and supervising Fair Price Shops, etc. Presently, Kerosene oil, rice, sugar, wheat, pulses, edible oils, spices, and iodized oils are also distributed through PDS outlets.Hence, the correct option is B i.e. '1,2, and 4.'
Q173
Which one of the following is a measure that can be used by the Government for combatting inflation?
✓ Correct answer: c) Increasing the rate of interest on savings and fixed deposits
ExplanationIncreasing the rate of interest on savings and fixed deposits is a contractionary monetary policy measure that can help combat inflation.When interest rates on savings and fixed deposits are increased, it encourages people to save more and reduces their propensity to spend.With reduced spending, there is lower demand for goods and services in the economy, which can help alleviate inflationary pressures.Additionally, higher interest rates can also discourage borrowing for consumption and investment purposes, further reducing aggregate demand and curbing inflationary tendencies.Hence the correct answer is option C.
Q174
In India, the contribution of food inflation to overall inflation is around 1/3rd to 2/5th. Within food inflation, contribution of food articles is higher because price rise in food articles is
✓ Correct answer: a) higher and their weight is also higher compared to food products
ExplanationKey concept When there is an increase in food prices and the demand remains constant but the supply decreases this lead to food price inflation and can cause social unrest Explanation Contribution of food inflation to the overall inflation is high in India around to And within the food inflation contribution of food articles is higher because price rise in food articles is higher and their weight is also higher compared to food products Hence, the correct answer is option(A) i.e, higher and their weight is also higher compared to food products
Q175
Which among the following is/are the objective/objectives of the NITI Aayog?1. Imposing policies on the States/UTs2. Allocation of funds at National and State levels3. Design strategies and long-term policies and programme frameworks Select the correct answer using the code given below.
✓ Correct answer: d) 3 only
ExplanationNITI Aayog (National Institution for Transforming India) is a policy think tank of the Government of India, established with the | | Defence aim of achieving sustainable development goals.Its objectives include:1. Imposing policies on the States/UTs - This is not within the mandate of NITI Aayog.It does not possess the authority to impose policies on states/UTs.2. Allocation of funds at National and State levels - While NITI Aayog does not have the power to allocate funds, it does play a role in recommending the allocation of funds to different sectors at both national and state levels.3. Design strategies and long-term policies and programme frameworks - This is indeed one of the primary objectives of NITI Aayog.Hence, the correct answer is option d. The features of NITI Aayog are mentioned below:1. Facilitate the development of a unified vision for national development priorities, sectors, and strategies through active collaboration with states.2. Promote cooperative federalism by establishing structured support initiatives and mechanisms, recognizing the pivotal role of states in national progress.3. Create mechanisms for crafting credible plans starting from the village level, progressively aggregating them at higher levels of governance.4. Ensure that national security interests are integrated into economic strategies and policies as and when necessary.5. Prioritize marginalized sections of society to ensure they adequately benefit from economic progress.6. Formulate strategic and long-term policy frameworks and initiatives, actively monitoring their progress and effectiveness.Utilize feedback for innovative improvements and necessary corrections.7. Provide advice and foster partnerships among stakeholders, including national and international think tanks, educational institutions, and policy research bodies.8. Establish a knowledge and innovation support system by collaborating with national and international experts, practitioners, and partners.9. Offer a platform for resolving inter- sectoral and inter-departmental issues to accelerate the implementation of the development agenda.10. Maintain a cutting-edge resource centre, serving as a repository of research on governance best practices, sustainable development, and equitable growth.Facilitate dissemination to stakeholders.11. Actively monitor and evaluate program implementation, identifying required resources to enhance the likelihood of success and broaden the scope of delivery.12. Focus on technology upgradation and capacity building to effectively implement programs and initiatives.13. Undertake additional activities as necessary to advance the national development agenda and achieve stated objectives.
Q176
Special Drawing Rights (SDRs) relate to
✓ Correct answer: d) the International Monetary Fund
ExplanationKey Points- Special Drawing Rights (SDRs) relate to the International Monetary Fund.Explanation- The SDR is a reserve asset that was established by the International Monetary Fund (IMF) in and can be traded between nations in exchange for liquidity, or cash.SDRs are not a currency and do not represent IMF claims.However, they are an international reserve asset that can be converted into reserve currencies with the assistance of other countries.Hence, the correct option is ‘d’ i.e the International Monetary Fund.
Q177
Which one of the following situations can lead to inflation?
✓ Correct answer: a) Rapid growth of aggregate demand outweighing supply
ExplanationA. Rapid growth of aggregate demand outweighing supply: Rapid growth of aggregate demand refers to a situation where there is a significant increase in the total demand for goods and services within an economy over a relatively short period.When demand grows faster than supply, it creates excess demand in the economy.This leads to increased competition for available goods and services, which in turn drives up prices.As prices rise due to increased demand and limited supply, consumers may experience higher costs for goods and services, resulting in inflation.B. Sluggish growth of aggregate demand: | | Defence Sluggish growth of aggregate demand refers to a situation where the overall demand for goods and services within an economy grows slowly or remains stagnant.In this scenario, prices have little upward pressure because demand is not outpacing supply.Instead, there may be a risk of deflation or disinflation, where prices either decrease or increase at a slower rate than expected.C. Reduction in the money supply: A reduction in the money supply occurs when the central bank or monetary authority implements policies to decrease the amount of money circulating in the economy.With less money available, consumers and businesses have reduced purchasing power.This can lead to a decrease in aggregate demand, potentially causing a decline in prices if demand falls below the level of supply.D. Higher levels of unemployment: Higher levels of unemployment refer to a situation where a larger proportion of the labour force is unemployed or underemployed.Unemployment can lead to decreased consumer spending and overall demand in the economy as unemployed individuals have less income to spend on goods and services.Hence the correct answer is A.
Q178
Which is the only country in the world to officially proclaim the Gross National Happiness (GNH) as the measure of the country's progress ?
✓ Correct answer: b) Bhutan
ExplanationKey Concept: International Happiness Day is celebrated on March 20 every year.Explanation: The term 'Gross National Happines's (GNH) was coined by the 4th King of Bhutan King Jigme Singye Wangchuk in 1972. Bhutan first initiated the resolution of the International Day of Happiness by the UN.The concept of Gross National Happiness includes sustainable development, which considers equally important economic and non-economic well-being aspects.GNH is measured based on 9 parameters: Health, Psychological well- being, Education, Time use, Cultural Diversity and resilience, Community vitality, Good Governance,Living standards and Ecological Diversity and resilience.Hence, the correct option is B i.e. 'Bhutan.'
Q179
The computation of poverty in terms of Monthly Per Capita Consumption Expenditure (MPCE) based on the Mixed Reference Period was recommended by the
✓ Correct answer: b) Tendulkar Committee
ExplanationThe Tendulkar Committee, which submitted its report in December 2009, introduced significant changes in the methodology used to compute poverty lines and poverty ratios in India.One of the key changes was the adoption of the Monthly Per Capita Consumption Expenditure (MPCE) as the basis for defining the poverty line.1. Monthly Per Capita Consumption Expenditure (MPCE): MPCE refers to the average monthly expenditure per person within a household.It is calculated by dividing the total household consumption expenditure by the total number of individuals in the household.MPCE serves as an important indicator of the economic well-being of individuals and households.2. Mixed Reference Period: The Tendulkar Committee introduced the concept of a Mixed Reference Period for calculating MPCE.Instead of relying solely on a single reference period for collecting expenditure data (e.g., 30 days), the Mixed Reference Period approach allows for the collection of expenditure data over different time frames.This could include weekly, monthly, quarterly, or annual reference periods, depending on the nature of expenditures and the availability of data.Hence the correct answer is option B.
Q180
Which one of the following is not a fund managed by NIIFL (National Investment and Infrastructure Fund Limited)?
✓ Correct answer: d) Global Investment Fund
ExplanationNIIF is a collaborative investment platform set up between the Government of India, global investors, multilateral development banks (MDBs), and domestic financial institutions.Ministerial Statement: This information was confirmed by Union Minister of State for Finance, Dr. Bhagwat Kisanrao Karad, in a written reply in Lok Sabha.Funds Managed by NIIF: Master Fund Fund of Funds Strategic Opportunities Fund These funds have invested in 16 entities across various sectors, including: Ports and logistics Renewable energy Roads Digital infrastructure Healthcare Manufacturing Investment Facilitation: An MOU was signed in November 2022 to facilitate investments across multiple sectors in India through an India-Japan Fund.Hence the correct answer is option D.
Q181 · 2009
Which of the following statements with regard to the Report of Tendulkar Committee (2009) on poverty estimates is/are correct?1. The Committee had used an all-India urban poverty line basket as a reference to derive both rural and urban poverty levels.2. The Committee had anchored the poverty line to the official food calorie norms. Select the correct answer using the code given below.
✓ Correct answer: a) 1 only
Explanation1. The Committee had used an all-India urban poverty line basket as a reference to derive both rural and urban poverty levels.If the committee indeed used an all- India urban poverty line basket to derive both rural and urban poverty levels, then this statement would be correct.2. The Committee had anchored the poverty line to the official food calorie norms.However, if the committee did not solely anchor the poverty line to official food calorie norms but considered a broader range of factors,such as monthly spending on education, health, electricity, and transportation, to derive poverty lines for rural and urban areas.So it is incorrect.Hence the correct answer is option A.
Q182
Which one of the following statements for a firm's equilibrium in Perfect Competition is not correct?
✓ Correct answer: d) The marginal cost decreases at the equilibrium output.
ExplanationIn perfect competition, the following conditions hold true for a firm's equilibrium: A. The market price must be greater or equal to average variable cost in the short run: Correct.This ensures the firm covers its variable costs and can continue operating in the short run.B. The market price must be equal to marginal cost: Correct.In perfect competition, firms produce where price equals marginal cost (P = MC) to maximize profits or minimize losses.C. The market price must be equal to average cost in the long run: Correct.In the long run, firms in perfect competition operate where price equals both marginal cost and average cost (P = MC = AC), earning normal profits.D. The marginal cost decreases at the equilibrium output: Incorrect.At equilibrium output in perfect competition, marginal cost is typically rising, not decreasing.Firms produce where marginal cost equals the market price, and marginal cost slopes upward due to the law of diminishing returns.Hence the correct answer is option D.
Q183
Which one of the following taxes is not included in the Central Pool to be shared with the States according to the recommendations of Finance Commission of India?
✓ Correct answer: c) Surcharge and Cess
ExplanationThe Finance Commission of India recommends the distribution of certain taxes between the central government and the states.However, not all taxes are part of the divisible pool.Here's an analysis of the options: A. Personal Income Tax: Included in the divisible pool and shared with states.B. Corporate Profit Tax: Also included in the divisible pool and shared with states.C. Surcharge and Cess: Not included in the divisible pool.Surcharge and cess are collected by the central government for specific purposes and are not shared with the states.For 2024-25, cess and surcharge collected by the Union government is estimated to be around 23% of its gross tax receipts, which does not form part of the divisible pool.D. Excise Duties: Part of the divisible pool and shared with states.Hence the correct answer is option C.
Q184
Level of per capita GDP depends upon which of the following?1. Proportion of population in the working age2. Work participation rate3. Per worker productivity Select the correct answer using the code given below.
✓ Correct answer: d) 1,2 and 3
ExplanationProportion of population in the working age: A higher proportion of the population in the working age means more potential workers, which can lead to higher GDP.Work participation rate: The proportion of the working-age population that is actually employed or actively seeking work impacts the total output of the economy.Per worker productivity: The amount of output each worker produces directly affects the overall GDP.Hence the correct answer is option D.
Q185
Under normal downward sloping demand curve and fully elastic supply curve of a commodity, an exogenous decrease in demand would lead to
✓ Correct answer: b) Decrease in equilibrium price and quantity
ExplanationIn this scenario, with a downward-sloping demand curve and a fully elastic supply curve, an exogenous decrease in demand would lead to a decrease in equilibrium price and quantity Decrease in Demand: The demand curve shifts to the left with decreased demand.Downward-sloping Demand Curve: A downward-sloping demand curve implies that as price decreases, quantity demanded increases, and vice versa.Fully Elastic Supply Curve: A fully elastic supply curve means that suppliers can provide any quantity of the good at the given price, without constraints.Equilibrium Adjustment: The decrease in demand would lead to a commodity surplus at the existing price.Suppliers would decrease the price to clear the market in response to this surplus, leading to a lower equilibrium price.Decrease in Equilibrium Quantity: Since both supply and demand are elastic, the price decrease would not fully offset the decrease in demand, leading to a decrease in equilibrium quantity.Hence, the correct answer is option B.
Q186
Consider the following statements regarding instruments of monetary policy :1. Standing deposit facility (SDF) rate was introduced in April 2022.2. SDF rate replaced fixed reverse repo rate as the floor of the LAF corridor. Which of the statements given above is/are correct?
✓ Correct answer: c) Both 1 and 2
ExplanationIn April 2022, the RBI introduced the new Standing Deposit Facility (SDF) to absorb liquidity from commercial banks The SDF replaced the Fixed Rate Reverse Repo (FRRR) as the floor of the Liquidity Adjustment Facility (LAF) corridor.The Fixed Rate Reverse Repo (FRRR) was replaced by the SDF as the floor of the LAF corridor.This means that the SDF rate replaced the fixed reverse repo rate when determining the lower bound of the corridor within which short-term interest rates fluctuate.Hence the correct answer is option C.
Q187
If India enters into Free Trade Agreements (FTAs) with other nations, then the growth of exports of India would depend upon which of the following?1. Extent of tariff reduction vis-à-vis MFN tariffs2. Extent of relaxation in terms of rules of origin3. Extent of relaxation in sanitary and phytosanitary measures4. Level of infrastructure in India5. Income in nations with which India enters into FTAs Select the correct answer using the code given below.
✓ Correct answer: d) 1, 2, 3, 4 and 5
ExplanationKey Concept: The growth of exports of India, as influenced by Free Trade Agreements (FTAs) with other nations, can depend on various factors.Let's evaluate each option: Explanation: | | Defence1. Extent of tariff reduction vis-à-vis MFN tariffs: This is a crucial factor.If FTAs lead to significant reductions in tariffs compared to the Most Favored Nation (MFN) tariffs, it can enhance India's export competitiveness by making Indian goods more attractive in the partner countries' markets.2. Extent of relaxation in terms of rules of origin: Rules of origin determine the criteria used to determine the origin of goods traded under an FTA.Relaxation in these rules can facilitate the utilization of preferential tariffs and increase export opportunities for Indian products by allowing them to qualify under the FTA provisions.3. Extent of relaxation in sanitary and phytosanitary measures: Sanitary and phytosanitary (SPS) measures are regulations related to food safety and animal and plant health standards.Relaxation in these measures can facilitate smoother trade by reducing non- tariff barriers and ensuring compliance with partner countries' regulations, thereby potentially boosting exports.4. Level of infrastructure in India: While infrastructure plays a significant role in facilitating trade, including exports, it may not directly determine the growth of exports resulting from FTAs.However, improved infrastructure can enhance the efficiency of export operations and reduce transaction costs, thereby indirectly supporting export growth.5. Income in nations with which India enters into FTAs: The income levels in partner countries can influence their demand for goods and services, including those from India.Higher income levels may lead to increased purchasing power and demand for Indian exports, potentially boosting export growth under FTAs.Hence the correct answer is option D.
Q188
Pandit Deendayal Upadhyay National Welfare Fund was established with the view to help which one of the following groups?
✓ Correct answer: c) Sportspersons
ExplanationThe Pandit Deendayal Upadhyay National Welfare Fund for Sportspersons (PDUNWFS) was established in March 1982 to support and assist former outstanding sportspersons who have fallen on hard times.This initiative recognizes the significant contributions these athletes have made to the country by achieving excellence in sports, often bringing national pride and glory.Key Objectives:1. Financial Assistance: The fund aims to provide financial support to retired sportspersons who are facing economic hardships.This includes helping them with their basic needs and improving their quality of life.2. Recognition of Achievements: The initiative acknowledges the dedication and achievements of sportspersons who have represented India at national and international levels, highlighting their roles in promoting sports and inspiring future generations.Hence the correct answer is option C.
Q189
Which of the following are included in M1 definition of money for the Indian economy?1. Reserves2. Currency3. Time deposits4. Demand deposits Select the correct answer using the code given below.
✓ Correct answer: c) 2 and 4
ExplanationKey Concept: The M1 definition of money typically includes the most liquid forms of money, which are readily accessible for transactions.Explanation:1. Reserves: These are not typically included in M1. Reserves represent funds that banks hold with the central bank to meet their reserve requirements and manage liquidity in the banking system.2. Currency: It refers to physical currency notes and coins in circulation, which are included in M1.3. Time deposits: Time deposits, such as fixed deposits, are not included in M1. They represent savings that are less liquid and usually have a fixed term.4. Demand deposits: These are funds held in accounts that are accessible on demand by the depositor, such as current accounts and some types of savings accounts.They are typically included in M1. Hence, the correct answer is option C.
Q190
Which of the following indicators is/are used to observe the monetary transmission mechanism in the economy?1. Weighted average lending rate2. Weighted average domestic term deposit rate3. 1-year median MCLR4. SDF rate Select the correct answer using the code given below.
✓ Correct answer: b) 1,2 and 3
ExplanationKey Concept: To observe the monetary transmission mechanism in the economy, central banks and economists often use various indicators to gauge the effectiveness of monetary policy transmission.Explanation:1. Weighted average lending rate: This is a key indicator used to assess how changes in monetary policy, such as adjustments to the central bank's policy rate, affect the interest rates banks charge on loans to consumers and businesses.It reflects the cost of borrowing for various economic agents and is thus relevant for understanding monetary transmission.2. Weighted average domestic term deposit rate: Similar to the lending rate, changes in monetary policy can influence the interest rates offered by banks on deposits.Monitoring changes in deposit rates helps understand how monetary policy impacts savers and affects the supply of funds in the banking system, contributing to the assessment of monetary transmission.3. 1-year median MCLR (Marginal Cost of Funds based Lending Rate): MCLR is the benchmark lending rate used by banks in India to price their loans.It is determined based on the marginal cost of funds and is sensitive to changes in the central bank's policy rates.Monitoring changes in MCLR, especially over specific tenors like 1-year, provides insights into how monetary policy actions are transmitted through the banking sector.4. SDF rate (Standing Deposit Facility rate): The Standing Deposit Facility is a facility provided by central banks where banks can park excess funds overnight.The rate associated with this facility can reflect the central bank's policy stance and liquidity conditions in the banking system.However, its relevance for observing monetary transmission may be more indirect compared to the other indicators listed.Hence the correct answer is option B.
Q191
Which one among the following was the focus of the Twelfth Five-Year Plan?
✓ Correct answer: a) Sustainable and Inclusive Growth
ExplanationThe focus of the Twelfth Five-Year Plan (2012–2017) was on Sustainable and Inclusive Growth.The plan aimed to achieve faster, more inclusive, and sustainable growth, addressing both economic development and environmental sustainability, along with social inclusion.Infrastructure Focus: Strengthening infrastructure projects and ensuring electricity supply in all villages.Educational Goals: Aimed at reducing the gender and social gap in school admissions and improving access to higher education.Environmental Target: Planned to increase the green cover by 1 million hectares annually.Non-farming Opportunities: Aspired to create new opportunities in the non- farming sector. | | Defence Growth Rate Target: Initially aimed for a 9% growth rate, but the National Development Council approved an 8% growth rate for the Twelfth Five-Year Plan in 2012. Hence the correct answer is option A.
Q192
Which of the following statements is/are correct?1. GDP deflator captures the average price of an unchanging basket of commodities that constitutes the GDP of the country.2. GDP deflator can be used to measure the real GDP of the economy but not the inflation rate. Select the correct answer using the code given below.
✓ Correct answer: b) 2 only
Explanation1. GDP deflator captures the average price of an unchanging basket of commodities that constitutes the country's GDP.This statement is correct.The GDP deflator is a measure of the overall level of prices in the economy relative to the base year.It reflects the changes in the prices of all goods and services produced within an economy.2. GDP deflator can be used to measure the real GDP of the economy but not the inflation rate.This statement is incorrect.The GDP deflator adjusts nominal GDP for inflation, thereby deriving real GDP.Real GDP is calculated by dividing nominal GDP by the GDP deflator.Additionally, changes in the GDP deflator over time can indicate inflation or deflation in the economy.Hence, the correct answer is option B.
Q193
Which one of the following statements is not correct for National Income Accounting for India?
✓ Correct answer: b) Net factor payments earned from abroad are included in Gross Domestic Product.
ExplanationNet factor payments earned from abroad are not included in GDP but in the calculation of Gross National Product (GNP).GDP measures the total value of goods and services produced within the domestic territory.In contrast, GNP measures the total value of goods and services produced by the factors of production owned by a country's residents, regardless of where they are located.Hence, the correct answer is option B.
Q194
Consider the following statements :1. A rupee Vostro account is an account that an Indian bank holds for a foreign bank in the domestic currency (rupee) to enable domestic banks to provide international banking services.2. Insurance density, i.e., average insurance premium per capita does not fully capture the financing gap in the event of a premature death because most of the insurance products sold in India are savings-linked with a small component of protection. Which of the statements given above is/are correct?
✓ Correct answer: c) Both 1 and 2
Explanation1. Statement 1 is correct: A rupee Vostro account is indeed an account that an Indian bank holds for a foreign bank in rupees, facilitating international banking services.Vostro Account: An account that domestic banks hold for foreign banks in the domestic currency (rupee in India's case).Purpose: Domestic banks use Vostro accounts to offer international banking services to clients with global banking needs.Special Rupee Vostro Account (SRVA): An additional system that complements the existing one, which relies on freely convertible currencies like the US dollar and British pound.Existing System: Requires maintaining balances and positions in major convertible currencies (e.g., US dollar, pound) to facilitate international trade.SRVA Role: Provides an alternative mechanism for trade settlements, reducing reliance on foreign currency reserves.1. Statement 2 is also correct: Insurance density does not fully capture the financing gap in the event of premature death because many insurance products in India are savings-linked, with a limited protection component.Thus, the correct answer is C: Both 1 and 2.
Q195
Consider the following statements regarding weightage of different articles in Wholesale Price Index (WPI) :1. Fuel and power have higher weightage in WPI than that of primary articles.2. Weightage of manufactured products in WPI is higher than that of fuel and power. Which of the statements given above is/are correct?
✓ Correct answer: b) 2 only
Explanation1. Fuel and power have higher weightage in WPI than that of primary articles.According to the WPI primary articles have a weightage of 22.62, while fuel and power have a weightage of 13.15. Therefore, primary articles indeed have a higher weightage than fuel and power in the WPI basket.2. The weightage of manufactured products in WPI is higher than that of fuel and power.Manufactured products have the largest share in the WPI basket, with a weightage of 64.23. This confirms that the weightage of manufactured products is higher than that of fuel and power.Hence the correct answer is option B.
Q196
Which one of the following statements regarding GST is not correct?
✓ Correct answer: c) Precious metals are taxed at a rate of 1 % under GST.
ExplanationA. Amendment 115 to the Constitution of India kept alcohol for human use and five petroleum products outside the ambit of GST.This statement is correct.Amendment 115 indeed excluded alcohol for human consumption and five petroleum products from the scope of GST.B. Amendment 122 to the Constitution of India kept only alcohol for human use outside the ambit of GST.This statement is incorrect.Amendment 122 primarily dealt with providing constitutional status to the Goods and Services Tax (GST) Council and its functions.It didn't specifically address the exclusion of alcohol for human use from GST.C. Precious metals are taxed at a rate of 1% under GST.This statement is incorrect.Precious metals are taxed at different rates under GST.For example, gold attracts a GST rate of 3%, not 1%.D. Unworked diamond is taxed at a rate of 0.25%.This statement is correct.Unworked diamonds are indeed taxed at a rate of 0.25% under GST.Hence the correct answer is option C.
Q197
Which one of the following dimensions is not included in Human Development Index ?
✓ Correct answer: d) Mortality rate
ExplanationThe Human Development Index (HDI) is a composite index used to measure and compare the overall development of countries based on three key dimensions:1. Health: Measured by Life Expectancy at Birth, which indicates the average number of years a newborn is expected to live if current mortality rates continue.2. Education: This dimension includes two indicators: Mean Years of Schooling: The average number of years of education received by people aged 25 and older.Expected Years of Schooling: The total number of years of schooling that a child entering the education system can expect to receive, assuming current enrollment ratios remain the same throughout their life.3. Standard of Living: Measured by Gross National Income (GNI) per capita, adjusted for purchasing power parity.Mortality rate: While related to health, mortality rates (such as infant mortality rates) are not directly included in the HDI.The HDI specifically uses life expectancy at birth as the key health indicator.Hence the correct answer is option D.
Q198
Which of the following statements is/are correct?1. Most of India's reserves is held in the form of foreign currency.2. There is no cost of holding foreign currency as reserves by a nation. Select the correct answer using the code given below.
✓ Correct answer: a) 1 only
Explanation1. Most of India's reserves is held in the form of foreign currency.This statement is correct.A significant portion of India's foreign exchange reserves is indeed held in the form of foreign currencies.These reserves include assets like foreign currency assets (FCA), gold reserves, Special Drawing Rights (SDRs), and the reserve position in the International Monetary Fund (IMF).Foreign currency assets constitute the largest component of these reserves.2. There is no cost of holding foreign currency as reserves by a nation.This statement is incorrect.Holding foreign currency reserves does involve costs.These costs can include opportunity costs, such as the foregone investment returns that could have been earned if the reserves were invested in other assets with potentially higher returns.Additionally, managing and maintaining these reserves can incur administrative and operational costs.Hence the correct answer is option A.
Q199
Which of the following statements is/are correct?1. A price index captures the change in the average price of a constant basket of commodities.2. If the price index takes values 100 , 110 and 121 in three consecutive years respectively, then the inflation rates in the 2 nd and 3rd years are 10% and 21 % respectively. Select the correct answer using the code given below.
✓ Correct answer: a) 1 only
Explanation1. A price index captures the change in the average price of a constant basket of commodities.A price index, such as the Consumer Price Index (CPI) or Wholesale Price Index (WPI), measures the average change over time in the prices paid by consumers (CPI) or producers (WPI) for a basket of goods and services.This basket typically contains a fixed set of goods and services to track price changes accurately.This statement is correct.2. If the price index takes values 100, 110, and 121 in three consecutive years, respectively, then the inflation rates in the 2nd and 3rd years are 10% and 21%, respectively.If the price index takes values 100, 110, and 121 in three consecutive years respectively, then the inflation rates in the 2nd and 3rd years are calculated as follows: For the 2nd year: For the 3rd year: Similarly, if the price index increases from 110 to 121, the inflation rate would be [(121 - 110)/110] * 100 ≈ 10.91%, not 21%.Hence, the correct answer is option A.
Q200
Which one among the following items comprises the major portion of revenue expenditure of the Union Government of India?
✓ Correct answer: b) Interest Payments
ExplanationInterest payments on government debt typically constitute the largest portion of revenue expenditure for the Union Government of India.This is due to the country's substantial public debt and the associated interest obligations.Here's the expenditure breakdown presented in table format: Expenditure Category Perce ntag e (%) Interest Payments 19% Central Sector Scheme (excluding capital outlay on Defence and Subsidy) 16% Defence 8% Subsidies 6% Pensions 4% Centrally Sponsored Scheme 8% Finance Commission and Other Transfers 9% Other Expenditure 9% Hence the correct answer is option B.
Q201
Which of the following is not included in the Capital Account of the Balance of Payments of a country?
✓ Correct answer: c) Invisibles
ExplanationThe Capital Account of the Balance of Payments (BoP) records financial transactions that affect a country's assets and liabilities with the rest of the world.These include Foreign Direct Investment (FDI), Commercial Borrowing, and External Assistance.A. Foreign Direct Investment (FDI): Included in the Capital Account as it involves financial investments between countries.B. Commercial Borrowing: Included in the Capital Account since it involves loans and credit between countries.C. Invisibles: Not included in the Capital Account.Invisibles (such as services, remittances, and income from abroad) are recorded in the Current Account, not the Capital Account.D. External Assistance: Included in the Capital Account as it involves foreign aid or loans.Hence the correct answer is option C.
Q202
Which of the following components of Central Government taxes on petroleum products is/are not shareable with the States?1. Basic Excise Duty2. Additional Excise Duty3. Special Additional Excise Duty Select the correct answer using the code given below.
✓ Correct answer: c) 3 only
ExplanationThe component of Central Government taxes on petroleum products that is not shareable with the States is: Special Additional Excise Duty Basic Excise Duty: This is a shareable component of the central taxes with the states under the revenue-sharing arrangements.Additional Excise Duty: This can also be shared with the states under specific conditions.Special Additional Excise Duty: This is typically not shareable with the states as it is often levied for specific purposes and retained entirely by the central government.Hence the correct answer is option C.
Q203
The practice of reducing the size of a product while maintaining its sticker price is called :
✓ Correct answer: a) Shrinkflation
ExplanationShrinkflation is the practice where companies reduce the quantity or size of a product while keeping its price the same.It is a form of hidden inflation because consumers pay the same amount but receive less.Companies often adopt shrinkflation during periods of rising input costs (like raw materials, packaging, or transportation) to avoid directly increasing prices.Hence, the correct answer is option A.
Q204
Which of the following statements about Open Network for Digital Commerce (ONDC) is/are correct?1. It was launched in 2021 by the Government of India.2. Its aim is to democratize e-commerce in India.3. India has surpassed China in 2024 in e-retail penetration. Select the answer using the code given below :
✓ Correct answer: b) 1 and 2 only
Explanation1. Statement 1: It was launched in 2021 by the Government of India.Correct.The Open Network for Digital Commerce (ONDC) was incorporated on December 31, 2021, as a Section 8 company by the Department for Promotion of Industry and Internal Trade (DPIIT), Government of India.2. Statement 2: Its aim is to democratize e-commerce in India.Correct.ONDC aims to democratize digital commerce by creating an open network that enables small and medium enterprises (SMEs) and local businesses to participate in e-commerce, thereby reducing the dominance of large platforms.3. Statement 3: India has surpassed China in 2024 in e-retail penetration.Incorrect.While India's e-retail market has grown significantly, becoming the world's second-largest in terms of online shoppers in 2024, it has not surpassed China in e-retail penetration.China remains the leader in e-retail penetration.Hence, the correct answer is option B.
Q205
Consider the following statements about Union Government’s Expenditure on revenue account and effective capital expenditure :1. Effective capital expenditure as percentage of GDP has increased from 2020-21 to 2023-24.2. Expenditure on revenue account as percentage of GDP has increased from 2020-21 to 2023-24. Which of the statements given above is/are correct?
✓ Correct answer: a) 1 only
Explanation1. Effective Capital Expenditure (Capex) Definition: Effective capital expenditure = Capital expenditure + Grants-in-aid for creation of capital assets.It is a more comprehensive measure of government’s contribution to long-term asset creation in the economy.Trend (2020-21 to 2023-24): 2020–21 → 3.2% of GDP 2023–24 (RE) → 4.2% of GDP Reason for increase: Government’s focus on infrastructure push under National Infrastructure Pipeline (NIP).Priority to transport, railways, roads, and defence modernization.Multiplier effect of Capex in boosting private investment.2. Revenue Expenditure Definition: Expenditure incurred for day- to-day running of the government, such as salaries, pensions, subsidies, interest payments, defence revenue expenses, etc. Trend (2020-21 to 2023-24): 2020–21 → 14.4% of GDP 2023–24 (RE) → 10.8% of GDP Reason for decline: Gradual withdrawal of COVID- related support measures.Fiscal consolidation efforts.Rationalization of subsidies (especially food and fertilizer).
Q206
The United Nations Carbon Offset Platform is an e-commerce platform to compensate greenhouse gas emissions by purchasing carbon credits. Who among the following can buy these carbon credits?1. A company2. An organization3. А citizen Select the answer using the code given below.
✓ Correct answer: a) 1, 2 and 3
ExplanationThe United Nations Carbon Offset Platform is an e-commerce portal run under the UNFCCC where users can purchase carbon units (CERs) to compensate greenhouse-gas emissions or to support climate projects.Who can buy: The UNFCCC explicitly states that a company, an organization or a regular citizen can purchase units on the platform — i.e. purchases are open to businesses, NGOs/organisations and individual members of the public.How it works (practical steps): Buyers browse listed UN-certified projects (examples: wind, hydro, biomass, methane-capture etc.), select the project/volume they want, and purchase the corresponding Certified Emission Reductions (CERs).The platform also | | Defence enables voluntary cancellation of CERs so the purchased units are retired and cannot be resold.Type and purpose of credits: The credits offered are CDM-issued CERs (Certified Emission Reductions).Purchases are voluntary and are used either to offset unavoidable emissions (by cancelling the credit) or to directly support project finance in the host countries.Evidence of public participation: The UN reported milestones showing uptake by the general public, individuals, businesses and organisations (for example, the platform had reached a multi-million CER cancellation milestone), which underlines that all three categories of buyers participate.
Q207
Which one among the following pairs of type of firm and feature is not correctly matched?
✓ Correct answer: c) Monopoly firm : Produces an efficient level of output
ExplanationOligopoly firm → Characterized by interdependence in decision-making, because a few firms dominate the market and each firm’s actions affect others.Correct.Monopolistic competition → Firm is a price setter to some extent due to product differentiation.Correct.Monopoly firm → Does not produce an efficient level of output.A monopoly restricts output to raise prices, leading to allocative inefficiency (price > marginal cost).Incorrect match.Perfectly competitive firm → Produces at the socially optimal output where Price = Marginal Cost, achieving allocative efficiency.Correct.
Q208
The Paramparagat Krishi Vikas Yojana (PKVY) launched in 2015-16 by the Central Government is aimed to :
✓ Correct answer: c) support promotion of organic farming in the country.
ExplanationParamparagat Krishi Vikas Yojana (PKVY) was launched in 2015-16 under the National Mission on Sustainable Agriculture (NMSA).The main objective of the scheme is to promote organic farming.PKVY is a key component under the Soil Health Management (SHM) scheme.It is part of the larger National Mission on Sustainable Agriculture (NMSA).Promotes organic farming through: Cluster approach by adopting organic villages.Participatory Guarantee System (PGS) certification.Expected Outcomes: Promotion of commercial organic production through certified farming.Ensures pesticide residue-free produce, improving consumer health.Helps in increasing farmers’ income and creating market opportunities for traders.Motivates farmers to use natural resources for producing organic inputs.Hence the correct answer is option C.
Q209
Which one among the following sectors is included in the list of the Sunrise Sectors in India?
✓ Correct answer: b) Food Processing Sector
ExplanationIn the context of the Indian economy, a Sunrise Sector is an industry that is in its infancy but shows promise of a rapid boom.These sectors are typically characterized by high growth rates, high levels of innovation, and significant potential for job creation and investment.Why Food Processing is a Sunrise Sector The Government of India has officially classified the Food Processing Sector as a "Sunrise Sector" due to several factors: Vast Raw Material Base: India is a global leader in the production of milk, fruits, vegetables, and cereals.Value Addition: The sector acts as a bridge between agriculture and manufacturing, reducing post-harvest losses and increasing farmers' income. | | Defence Investment: It allows 100% Foreign Direct Investment (FDI) under the automatic route for most segments.Government Support: Initiatives like the Pradhan Mantri Kisan Sampada Yojana (PMKSY) and the Production Linked Incentive (PLI) Scheme specifically target this sector to make India a "Global Food Hub." Manufacturing, Services, and Textile Sectors: These are considered Traditional or Established sectors.While they are vital to the economy, they have already reached a level of maturity and do not fit the definition of an "emerging" or "sunrise" industry in the current economic landscape.
Q210
Which of the following statements with respect to the Gender Inequality Index (GII) is/are correct?1. GII reflects gender-based disadvantage in work participation, property and income dimensions.2. GII reflects gender-based disadvantage in reproductive health, empowerment and the labour market dimensions.3. The value of GII ranges from 0 to 1, with a GII of 0 indicating women and men faring equally in all dimensions. Select the answer using the codes given below:
✓ Correct answer: c) 2 and 3 only
ExplanationThe Gender Inequality Index (GII) is a composite metric introduced by the United Nations Development Programme (UNDP) in 2010. It measures the opportunity cost of gender inequality.Statement 1 is Incorrect: The GII does not specifically measure "property and income."Statement 2 is Correct: The GII focuses on three specific dimensions:1. Reproductive Health: Measured by Maternal Mortality Ratio (MMR) and Adolescent Birth Rate (ABR).2. Empowerment: Measured by the share of parliamentary seats held by women and attainment in secondary and higher education.3. Labour Market: Measured by women's participation in the work force.Statement 3 is Correct: The GII ranges from 0 to1. 0 indicates perfect equality (men and women fare equally).1 indicates total inequality (one gender fares as poorly as possible in all dimensions).
Q211
The financial instruments that generate proceeds for investment in environmentally sustainable and climate-suitable projects are called as:
✓ Correct answer: a) Green Bonds
ExplanationGreen Bonds are fixed-income instruments specifically earmarked to raise money for climate and environmental projects.They are a key part of "Green Finance," aimed at mitigating the effects of climate change.How Green Bonds Work When an entity (like a government or a corporation) issues a green bond, they are legally bound to use the proceeds for projects that have a positive environmental impact.Comparison of the Options Green Bonds (Option A): Used for renewable energy, energy efficiency, clean transportation, and sustainable water management.In India, the government issues Sovereign Green Bonds to fund its green infrastructure.Carbon Bonds (Option B): These are generally related to carbon credits or the right to emit a certain amount of carbon dioxide, rather than being a standard investment vehicle for infrastructure projects.Climate Credit Bonds (Option C): This is not a standard or widely recognized financial term in the same way Green Bonds are; it is often a misnomer for climate-linked securities.Social Impact Bonds (Option D): These focus on social outcomes (like reducing recidivism, improving healthcare, or education) rather than environmental projects.They follow a "pay-for-success" model.
Q212
Which one among the following statements correctly defines the Infant Mortality Rate (IMR)?
✓ Correct answer: c) IMR is the number of deaths of infants under one year old per 1000 live births in a year.
ExplanationThe Infant Mortality Rate (IMR) is a vital demographic indicator used to assess the quality of healthcare, nutrition, and overall living standards in a country or region.Breaking Down the Definition To be technically accurate, IMR must include three specific components:1. Age Limit: It only counts deaths of children under one year of age.2. Denominator: It is calculated per 1,000 live births (not per 1,000 deaths or the total population).3. Timeframe: It is usually measured over a one-year period.
Q213
The Multidimensional Poverty Index (MPI) is measured by:
✓ Correct answer: a) Measuring each person's overlapping deprivations across the indicators in the health, education and standard of living dimensions
ExplanationThe Multidimensional Poverty Index (MPI) was launched in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP).It goes beyond income to understand how people experience poverty in their daily lives.How MPI is Measured Unlike traditional poverty measures that look only at income (how much money you have), the MPI looks at deprivations (what you are missing).It identifies overlapping disadvantages across three dimensions and ten indicators: Dimensi on Indicators (Weighted equally within the dimension) Health Nutrition, Child Mortality Educatio n Years of Schooling, School Attendance Standard of Living Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets
Q214
Which one of the following items comprises the major portion of Revenue Expenditure in Budget 2025-26 of the Union Government of India?
✓ Correct answer: b) Interest Payments
ExplanationThe correct option is B: Interest Payments.In the Union Budget 2025-26, Interest Payments continue to be the single largest component of the Union Government's Revenue Expenditure.Key Breakdown of Expenditure (Budget 2025-26) According to the budget estimates, interest payments account for approximately 25% of the total expenditure and a significant 37% of the total revenue receipts.Item Estimated Intere st Paym ents ~25% of total expenditure; the largest single item under Revenue Expenditure.Defen ce Servic es While it receives a massive allocation, a large portion is split between Revenue (salaries/operations) and Capital (modernization).Pensi ons A significant "committed expenditure," but smaller in scale compared to the interest on historical debt.Road Trans port Primarily falls under Capital Expenditure as it focuses on asset creation (building highways).Why Interest Payments?Interest payments are classified as Revenue Expenditure because they do not result in the creation of new assets or the reduction of liabilities (only the principal repayment reduces the liability).Due to the accumulation of fiscal deficits over the decades, the cost of servicing this national debt remains the heaviest burden on the government's annual revenue.Contextual Summary | | Defence Committed Expenditure: This includes interest payments, salaries, and pensions.In the 2025-26 budget, these three items together consume more than 60% of the government's total revenue receipts, leaving limited room for discretionary spending on development.Revenue vs. Capital: The government has been trying to curb Revenue Expenditure (like subsidies) to increase Capital Expenditure (Capex) for infrastructure, which reached a record ₹11.21 lakh crore in this budget cycle.
Q215
In which of the following years was the General Agreement on Tariffs and Trade (GATT) absorbed into the World Trade Organization (WTO)?
✓ Correct answer: b) 1995
ExplanationKey point: The World Trade Organisation created in 1995 with 164 members is an international institution that oversees the rules among nations for global trade.Explanation: The General Agreement on Tariffs and Trade was signed in October 1947 and became law in 1948 aimed at making international trade easier.The GATT was absorbed into the world trade organization ( WTO )in 1995. Hence the correct option is (b).
Q216
The lower growth of coal production in India during 2011-2012 was primarily due to1. environmental restrictions2. non-availability of forestry clearance3. poor law and order situation in coal- producing States4. excessive rainfall in coal-mining areas Select the correct answer using the code given below.
✓ Correct answer: a) 1, 2, 3 and 4
ExplanationKey concept The lower growth rate of coal production in India.In India during 2011-2012 coal production was low Explanation The low growth was primarily due to the excessive rainfall in coal mining areas and environmental restrictions.1. Environmental Restrictions: Environmental regulations and laws aim to protect the environment by enforcing stricter rules on mining practices and controlling emissions.These restrictions can limit coal production, making it harder to expand operations and meet demand.2. Non-Availability of Forestry Clearance: Forestry clearance is required to access forest land for activities such as mining.The lack of necessary approvals from forest authorities can delay or block coal production by restricting access to essential land for mining operations.3. Poor Law and Order Situation in Coal- Producing States: Instability and disruptions caused by poor law and order conditions in coal- | | Defence producing states can severely impact coal production.Operational challenges, workforce safety, and transportation delays are common issues that arise, all of which hinder consistent production.4. Excessive Rainfall in Coal-Mining Areas: Heavy rainfall can result in landslides, flooding, and other weather-related disruptions in coal-mining regions.These adverse conditions can damage infrastructure and equipment, hampering mining operations and leading to lower coal production.Hence, the correct answer is option A. Additional Information Recently, in the last eight years the coal production has increased by 37.3%
Q217
The Government of India and the Reserve Bank of India have decided to introduce 1 billion pieces of Rs. 10 notes in polymer/ plastic on a field trial basis. Which of the following is/are the objectives behind this move?1. Increase the lifetime of the notes2. Combating counterfeiting3. Reducing the cost of minting of currency Select the correct answer using the code given below :
✓ Correct answer: d) 1,2 and 3
ExplanationKey concept: The Indian government and RBI trials for polymer/plastic Rs 10 notes: The government of India has informed Parliament that RBI will conduct field trials of 1 billion pieces of new polymer/ plastic based Rs. 10 notes Explanation: The Reserve Bank of India will conduct city trials of a new polymer/plastic based 10 Rs. banknote The field trials will be conducted on five cities Mysore, Kochi, Shimla, Jaipur and Bhubaneswar These notes are stronger and smaller than cotton based notes thus Increases the lifetime of the notes, makes harder to counterfeit and also reducing the cost of minting of currency Therefore, all the three statements are correct Hence, the correct answer is option D.
Q218
Indian monetary policy includes the "Liquidity Adjustment Facility (LAF)". Which of the following tools is utilized under LAF?1. Repo Rate2. Reverse Repo Rate3. Bank Rate4. Cash Reserve Ratio Select the correct answer using the codes given below.
✓ Correct answer: d) 1 and 2
ExplanationKey concept: Monetary Policy Explanation: One of the most important elements of India's monetary policy is the "Liquidity Adjustment Facility (LAF)".The Reserve Bank of India (RBI) uses it as a tool to control liquidity in the banking system.LAF's principal goal is to maintain the market's short-term interest rates within the policy corridor, which is indicated by the repo and reverse repo rates.Repo rate: Repo is short term for "Repurchase Agreement." The RBI loans money to banks in exchange for government assets when it conducts a repo auction.Banks receive money from the central bank and guarantee their securities to the RBI in exchange.The interest rate at which banks borrow money from the RBI by guaranteeing certain securities is known as the repo rate.Reverse Repo Rate: The opposite of a repo rate is reverse repo rate.In a reverse repo auction, the RBI borrows money from banks by pledging government assets as security.Banks deposit their extra cash with the RBI and receive interest on it.The interest rate at which banks deposit their excess cash with the RBI is known as the reverse repo rate.Hence, the correct answer is option D.
Q219
How does partìcipatory budgeting seek to make the functioning of local governance institutions more transparent and accountable?1. By allowing citizens to deliberate and negotiate over the distribution of public resources2. By allowing citizens to play a direct role in deciding how and where resources should be spent3. By allowing historically excluded citizens with access to important decision-making venues Select the correct answer using the code given below.
✓ Correct answer: a) 1 and 2 only
ExplanationKey Concept: Benefits of partìcipatory budgeting Explanation: Participatory budgeting (PB) is a citizen or public participation process in which community members decide how a portion of the public budget should be allocated.Participatory budgeting is important because it gives citizens real control over what they spend their budgets on.Participatory budgeting enables citizens to identify, discuss and prioritize public spending projects and empowers them to make real decisions about how their money is spent.It enables citizens and civil society, and governmental and legislative bodies, to advise and negotiate the distribution of public funds.Hence the correct answer is option (a) i.e., 1 and 2 only
Q220
Share of food in total consumption expenditure has been coming down as per capita income grew over time in last sixty years because
✓ Correct answer: c) growth in food expenditure has been lower than growth in per capita income
ExplanationKey concept In the last sixty years share of food in total consumption expenditure has been declined as the per capita income grew Explanation Since the growth in the food expenditure has been lower than the growth in per capita income therefore,the share of food in total consumption expenditure declined Hence, the correct answer is option(C) i.e, growth in food expenditure has been lower than growth in per capita income
Q221
Consider the following statements: Statement I: Deficit financing does not lead to inflation if adopted in small doses. Statement II: Deficit financing is an often-used tool for financing budgetary deficits. Select the correct answer using the codes given below:
✓ Correct answer: b) Both the statements are individually true but statement II is not the correct explanation of statement I
ExplanationKey Points- Deficit financing is a practice in which the government spends more than it receives as revenues, the difference being made up by borrowing or minting new funds.Explanation- Deficit financing is the borrowing that a government uses to cover up its budget deficit.Deficit financing is covered up by either printing up a new currency, issuing bonds, or burrowing.So, deficit financing is used as a tool for financing deficit budgets.And also if it is taken in small doses it does not lead to inflation.So, both statements are correct but statement II is not the correct explanation of statement I. Hence, the correct option is ‘b’ i.e.Both statements are individually true but statement II is not the correct explanation of statement I.
Q222
The government can influence private sector expenditure by1. taxation2. subsidies3. macroeconomic policies4. grants Select the correct answer using the code given below.
✓ Correct answer: a) 1,2,3 and 4
ExplanationKey concept Private sector refers to that part of the economy which is not under the direct control of state but however government can influence the private sector Explanation The government can influence private sector expenditure through various mechanisms:1. Taxation: By increasing or decreasing taxes, the government can influence how much private entities spend or save.2. Subsidies: Subsidies reduce the cost of production for businesses, thereby encouraging more spending or investment.3. Macroeconomic Policies: These include monetary and fiscal policies that can alter interest rates, inflation, and overall economic conditions, affecting private sector spending decisions.4. Grants: Direct financial assistance from the government can stimulate private sector spending by reducing financial constraints.Hence, the correct answer is option A.
Q223
Which of the following is a measuring indicator of Human Development Index?
✓ Correct answer: d) All of above
ExplanationKey Concept: In 1990, Prof. Mehbub Al Haque of Pakistan and Prof. Amartya Sen of India introduced the concept of Human Development Index (HDI).Since 1993, it has been used by the United Nations Development Programme (UNDP) each year to calculate the Human Development Index (HDI).Explanation: The Human Development Index is calculated on the basis of three indicators-1. Life Expectancy Index (LEI): Calculated from Life expectancy at birth.2. Education Index (EI): Calculated from Mean years of schooling and Expected years of schooling3. Income Index (II): Calculated from GNI per capita Hence the correct answer is option D.
Q224
A recent survey (by Bloomberg) shows that the USA has fallen behind emerging markets in Brazil, China, and India as the preferred place to invest. Why is this so? . The unstable economic situation of the USA which the global investors feel not likely to improve in the near future. . Global investors are finding Brazil, China and India to be actually more amenable to foreign investment. Select the correct answer using the code given below :
✓ Correct answer: c) Both 1 and 2
ExplanationKey Points- According to a report of Bloomsburg due to the unstable economic situation of the USA, global investors are facing market instability there.This gives rise to emerging markets of the world.Explanation- The USA has fallen behind emerging markets in Brazil, China, and India as the preferred place to invest, as a Bloomberg survey shows , though the world’s largest economy still ranks highest of all major countries.Brazil, China, and India are part of five emerging markets known as BRICS- the other being Russia and South Africa.Also, these markets are more amenable to foreign investment.So, both statements are correct.Hence, the correct option is ‘c’ .
Q225
Which one of the following is not a component of the scheme Innovation in Science Pursuit for Inspired Research (INSPIRE)' launched by the Union of India?
✓ Correct answer: d) Vocational training after higher education
ExplanationKey Concept: Innovation in science pursuit of inspired research is a cutting-edge programme that the Department of Science and Technology sponsors and oversees.Explanation: Vocation training after higher education is not the component of the scheme innovation in science pursuit for inspired research.Hence,the Correct option is D i.e. Vocational training after higher education.Additional Information: Career and technical education are known as vocational training and education.Vocational education is a type of institution of higher learning created primarily to offer vocational education.
Q226
Which one of the following is not correct in the context of balance of payments of India during 2013-2014?
✓ Correct answer: d) Capital account balance was negative
ExplanationBalance of Payments (BOP): A Balance of Payment concept that includes the sum of the Capital and Current accounts.Covers all international transactions between a domestic country and the rest of the world.Encompasses items such as the goods account, services account, unilateral transfers, and capital accounts.India's BOP Position in 2013-14: Current Account Deficit (CAD) decreased sharply from a record high of US 32.4 billion (1.7% of GDP) in 2013-14. The trade deficit in March 2014 was $10.5 billion, which was slightly higher than the previous year.The net exports figure or trade balance is negative when exports are less than imports.There was a rise in net Invisibles receipts during 2013-14. The capital account balance declined but remained positive in 2013-14; therefore, the statement regarding its negativity is incorrect.Hence the correct answer is option D.
Q227
Which one of the following continents accounts for the maximum share in exports from India?
✓ Correct answer: a) Asia
ExplanationKey concepts: India ranks among the top exporters of grains and is the world's second-largest rice producer.Explanation: The largest portion of Indian exports for the fiscal year 2021—more than 26 percent —was engineering items.Nearly half (47.8%) of India's export value went to other Asian countries, while 19.3% went to European buyers, according to the continent share.India is anticipated to achieve $46 billion in exports to the ASEAN region (2021).Hence, the Correct option is ‘A i.e. Asia
Q228
The Second Five Year Plan that called for the establishment of Socialist pattern of society was commonly referred to as the
✓ Correct answer: b) Mahalanobis Plan
ExplanationKey Concept- Five year plan of India .Explanation-1. The second five year plan called for the pattern of socialist pattern of society was commonly referred to as Mahalanobis plan.2. The Mahalanobis plan was proposed by the renowned professor Prasantha Chandra Mahalanobis,who had set up the national statistical institute.3. The basic objective of the plan was to adopt the idea of rapid industrialisation and rapid development in the PSU’s.4. The plan was totally focussed on economic growth and was often criticized for neglecting the education sector.Hence, the answer is option B.
Q229
During the Eleventh Five Year Plan (FYP), the agriculture sector in India witnessed a growth rate of per cent per annum which is higher than 2.4 per cent per annum in the previous FYP. This is largely due to better performance of:
✓ Correct answer: a) Crops and Livestock
ExplanationKey concepts: The eleventh five-year plan is India's blueprint for economic growth from 2007 to 2012. The agriculture sector includes businesses whose main activities are the production of crops, the care and feeding of animals, and the harvesting of fish and other animals from farms, ranches, or their natural habitats.Explanation: Agriculture and rural development have been prioritized in the Eleventh Five Year Plan (2007–2012).Agrarian distress issues have been addressed through a variety of policy initiatives.In India, the agriculture sector grew at a pace of 3.3 percent annually during the Eleventh Five Year Plan, compared to 2.4 percent annually during the previous plan.This is largely because crops and animals are performing better.The growth rate was improved by special initiatives including Rashtriya Krishi Vikas Yojana (RKVY) and the National Food Security Mission.Hence, the Correct option is A‘ i.e. Crops and Livestock
Q230
Which of the following statements about the Livestock sector in India is/are correct?1. Livestock contributed about 25 per cent of gross value added in agriculture2. It provides self employment to a large segment of population3. Rapid growth of livestock sector can be egalitarian and inclusive Select the correct answer using the code given below:
✓ Correct answer: d) 1,2 and 3
ExplanationKey concepts: The formula for calculating gross value added (GVA) is production (at basic prices) minus intermediary consumption.In the Indian economy, the livestock sector is a significant subsector of agriculture.Explanation: In India's agriculture sector, the gross value added from livestock in fiscal year 2020 was over seven trillion Indian rupees.Livestock now accounts for 29.35percent (2019-20) of all agriculture and allied sector GVA (at constant prices), up from 24.32 percent in 2014–15. Dairy, fisheries, and animal husbandry are all included in the livestock sector.India has a large cattle resource base, hence 8.8% of the population works in the livestock industry.About 4% of the GDP and 25% of the gross value added in agriculture were contributed by it.India owns the most livestock worldwide.Rapid expansion of the cattle industry can be inclusive and egalitarian.It gives a significant portion of the population in India self- employment opportunities.Hence, the Correct option is D‘ i.e. 1,2 and 3
Q231
As per the RBI guidelines, which one of the following is the minimum tenure of Masala Bonds that an Indian company can issue offshore?
✓ Correct answer: c) Three years
ExplanationExplanation-1. As per the RBI guidelines, the minimum tenure of Masala Bonds that an Indian company can issue offshore is 3 years.2. Masala Bonds are offshore rupee-denominated bonds issued by Indian companies in overseas markets to raise funds.The name "Masala Bond" reflects the Indian culture and cuisine, and is used to distinguish these bonds from other types of bonds.3. The Reserve Bank of India (RBI) issued guidelines for Masala Bonds in 2015. According to these guidelines, Indian companies can issue Masala Bonds overseas for a minimum tenure of 3 years and a maximum tenure of 10 years.The guidelines also specify that the funds raised through Masala Bonds can be used for any permissible end use, except for real estate activities, investment in capital markets, and equity investment in India.4. Masala Bonds are popular among Indian companies as they provide an alternative source of funding, which is not subject to exchange rate fluctuations as the bonds are denominated in rupees.They also allow Indian companies to diversify their investor base and access a wider pool of global investors.Hence the correct answer is option C.
Q232
Which of the following is/are not FDI policy change(s) after 2010 ?1. Permission of 100 percent FDI in automotive sector2. Permitting foreign airlines to make FDI up to 49 percent3. Permission of up to 51 percent FDI under the government approval route in multi-brand retailing, subject to specified conditions4. Amendment of policy on FDI in single-brand product retail trading for aligning with global practices Select the correct answer using the code given below :
✓ Correct answer: a) 1 only
ExplanationKey Concept: Changes in policy of FDI (Foreign Direct Investment) after 2010 Explanation: Foreign direct investment is a form of investment in which a company based in another country owns a majority of production assets, such as businesses, real estate or factories, in one country.FDI consists of construction of new infrastructure, reinvestment of profits from overseas operations and intra-company investment .There are two ways by which India obtains FDI i.e.the automatic route and the government route Only, 49% of FDI in the automotive sector is admitted to power exchanges registered with the Central Electricity Regulatory Commission.Up to 49% of FDI is permitted to the foreign airlines.Up to 51% of FDI is allowed under government approval process in multi-brand retail, subject to specific conditions FDI Policy for Single Brand Retailers Revised to Align with Global Practices Hence the correct answer is option (A) i.e., 1 only
Q233
Which one of the following is not a target of the 12th Five-Year Plan?
✓ Correct answer: b) Agriculture Growth Rate of 5 percent
ExplanationKey points- One of the targets of the Five-Year Plan is to increase agriculture growth rate of per cent.Explanation- The government of India's twelfth five-year plan was the country's final five-year plan.The Planning Commision was abolished and NITI Ayog was established instead of that.The target of the Five-Year Plan are:- Real GDP Growth Rate by per cent. agriculture growth rate of per cent.During the Plan period, green cover will increase by 1 million hectares per year.Manufacturing Growth Rate of per cent.In terms of economic growth, each state must outperform the 11th plan.Hence, the correct option is ‘b’ i.e. Agriculture Growth Rate of 5 percent.
Q234
Which one of the following was set as a target of average growth of GDP of India over the plan period 2012-2017 by the Approach Paper to the Twelfth Five Year Plan?
✓ Correct answer: b) 8 percent
ExplanationExplanation- The government of India's twelfth five-year plan was the country's final five-year plan.The Planning Commission was abolished and in 2014 NITI Ayog was established instead of that.The target of the 12th Five-Year Plan are:- Real GDP Growth Rate of 8% Agriculture growth rate of 4% During the Plan period, the green cover will increase by 1 million hectares per year.Manufacturing Growth Rate of 10% In terms of economic growth, each state must outperform the 11th five year plan Hence, the correct option is ‘b’, i.e. 8%
Q235
In its emphasis on enhancing human capabilities, which one among the following does NOT figure in the Twelfth Five-Year Plan ?
✓ Correct answer: a) Life and longevity
ExplanationKey Points- Life and longevity do not figure in the Twelfth Five-Year Plan.The twelfth five-year plan of the government of India was India’s last five-year plan.Explanation- The Twelfth Five-Year Plan emphasizes enhancing human capabilities are education delivery of public service skill development poverty health environment and long-term viability infrastructure.Other than this it aims to reduce poverty , to pace up GDP, etc. Hence, the correct option is ‘a’ i.e. long and longevity.
Q236
Surge pricing takes place when a service provider
✓ Correct answer: a) raises the price of its product or service as demand outstrips supply
ExplanationKey Points- Surge pricing takes place when a service provider raises the price of its product or service as demand outstrips supply.Explanation- When a company raises the price of its product or service if there is an increase in demand but supply is not enough to fulfill it then its prices surge; this is known as surge prices.Surge price is also known as dynamic pricing or demand pricing or time-based pricing.Hence, the correct option is ‘a’ i.e. raises the price of its product or service as demand outstrips supply.
Q237
The Nehru-Mahalanobis Strategy of Development was implemented for the first time by which one of the following Five-Year Plans?
✓ Correct answer: b) Second Five-Year Plan
ExplanationKey Concept: Nehru-Mahalanobis Strategy of Development The Nehru-Mahalanobis model was developed on the foundation of a long-term development strategy that gave higher precedence to long-term development goals rather than giving in to immediate and short-term ambitions.Explanation:1. The Nehru-Mahalanobis Strategy of Development was implemented for the first time by the 2nd Five-Year Plan.2. Its primary emphasis was on the nation's industrial development.3. The plan's time frame was from 1956 to 1961.4. First Five-Year Plan: Harrod- Domar model with an emphasis on the nation's agricultural development.5. The third five-year plan, known as the Gadgil plan, was centred on establishing economic independence so that it could take off on its own.6. Fourth Five-Year Plan: Stable development and increasing self-sufficiency.Hence, the correct answer is option (b).
Q238
'Seva Bhoj Yojana', a scheme of the Government of India that seeks to reimburse the Central share of CGST and IGST on Food/Prasad/Langar/Bhandara offered by religious institutions, is introduced recently by which one of the following Ministries?
✓ Correct answer: a) Ministry of Culture
ExplanationKey Concept: Seva Bhoj Yojana A central sector programme of the Indian government's ministry of culture is called "Seva Bhoj Yojna".It plans to reimburse the Central Government's portion of the Integrated Goods and Services Tax (IGST) and the Central Goods and Services Tax (CGST) in order to lessen the financial burden on charitable religious institutions that offer food, prasad, community kitchen space, and brahmana to the general public and devotees without charge.Explanation:1. 'Seva Bhoj Yojana', a scheme of the Government of India was introduced by the Ministry of Culture.2. It is a programme to offer financial aid, free "prasad," free food, or free "langar" or "bhandara" (community kitchen), which are provided by charitable/religious organisations such Gurudwara, Temples, Dharmik Ashram, Mosques, Dargah, Church, Math, Monasteries, etc.3. Because it is a Central Sector Scheme, the Central Government provides all financial support.4. The programme would reimburse religious organisations for the CGST and IGST they paid while buying particular foods.Hence, the correct answer is option (a).
Q239
The principal component(s) of Nehru- Mahalanobis strategy of economic development was/were1. Restructuring economic dependency on metropolitan capitalism into independent economic development.2. Transition from semi-feudal agriculture to capitalist farming. Select the correct answer using the code given below :
✓ Correct answer: c) Both 1 and 2
ExplanationKey Concept: Pt.Jawahar Lal Nehru's close advisor, Mahalanobis, founded the Indian Statistical Institute.Explanation: 1956–1961's Mahalanobis model.1956 replaced the 1948 Industrial Policy Resolution.To construct an industrial basis, the policy stressed fast heavy industry development.One goal was to swiftly make India independent on producer goods growth so that capital accumulation would not be limited by challenges in getting essential producer goods from other countries.Statement 1 is correct.Emphasis on transitioning from semi-feudal agricultural to capitalist farming.Statement 2 is correct.Hence the correct answer is option C.
Q240
The call for Garibi Hatao was incorporated in
✓ Correct answer: b) Fifth Five Year Plan
ExplanationKey Concept: Five-Year Plans Explanation: The slogan "Garibi Hatao" was famously given by Prime Minister Indira Gandhi during the 1971 general elections.It became the central theme of the Fifth Five-Year Plan, which focused on: Poverty alleviation Self-reliance in agriculture and defence Improving employment and income levels Hence, the correct answer is Option (b).
Q241
The idea of Planning in Independent India was drawn from
✓ Correct answer: a) the Bombay Plan
ExplanationKey Concept: Planning Explanation: A section of the big industrialists got together in 1944 and drafted a joint proposal for setting up a planned economy in the country.This proposal was called the Bombay Plan.The Bombay Plan wanted the state to take major initiatives in industrial and other economic investments.So,the idea of planning in independent India was drawn from the Bombay Plan.Hence, the correct answer is Option (a).
Q242
Which Five Year Plan of India focused on rapid industrialization based growth process?
✓ Correct answer: b) Second Five Year Plan
ExplanationKey Concept: The second five-year plan focused on heavy industries and Rapid industrialization.Explanation: The Harrod-Domar Growth Model was used for overall projections.The strategy of resource allocation was based on the two-sector (agriculture & industry) and four-sector model developed by Prof. P. C. Mahalanobis.The Second Five-Year Plan (1956-61) is also known as the Mahalanobis Plan.It was conceived in an atmosphere of economic stability.Agriculture was given lower priority as the focus was on rapid industrialization.Emphasis was placed on heavy and basic industries.The Plan advocated huge imports financed through foreign loans.The Industrial Policy of 1956 aimed at establishing a socialist pattern of society.Acute foreign exchange shortage led to the pruning of development targets.A 30% price rise was observed, in contrast to the decline in prices during the First Plan.The Second Five-Year Plan was only moderately successful.Hence, the correct answer is option B.
Q243
Plan allocation in agriculture and irrigation as percentage of total plan outlay was highest in :
✓ Correct answer: c) First Five-Year Plan
ExplanationKey Concept: The concept of Five-Year Plans in India was inspired by the Soviet model of economic planning and was first introduced in 1951 as part of the country's strategy for economic development.Explanation: Plan allocation in agriculture and irrigation as a percentage of total plan outlay was highest in the First Five- Year Plan ( 1951-56).The year 1951-56 was the first year of the Plan allocation in agriculture and irrigation.The plan allocation of agriculture including irrigation and power.It was recorded and accorded the highest priority and therefore, the First Plan assigned the maximum priority to the agricultural sector.Moreover, the plan cleared that from the fact that 31 p.c. of the total plan outlay was strongly devoted to agriculture.However, the plan was known and was based on the Harrod-Domar model.It gave priority to the agricultural development of the country and the Plan was presented before the parliament by Jawaharlal Nehru.Lastly, it was the most successful plan of agricultural production as the growth rate of agriculture has been recorded more in this decade Hence the correct answer is option C i.e., First Five-Year Plan
Q244
Who among the following is known as the architect of Indian planning?
✓ Correct answer: c) P.C. Mahalanobis
ExplanationP.C. Mahalanobis: He is considered the father of modern statistics in India.He founded the Indian Statistical Institute.He is also known as the Architect of Indian Planning.Mahalanobis's model of the second five-year plan focused on Rapid industrialization and strengthening of the public sector.Hence, the correct answer is option C.
Q245
Which one of the following statements regarding the objectives of the Second Five- Year Plan is not correct?
✓ Correct answer: c) Expansion of the consumer goods sector
ExplanationKey Concept: The Second Five-Year Plan centered on fostering the public sector and accelerating industrialization.Explanation: The Second Five-Year Plan, which took place in India from 1956 to 1961, focused more on the development of basic and heavy industries to support industrial growth and infrastructure rather than expanding the consumer goods sector.A substantial allocation of nearly 50 billion rupees was designated across various sectors to meet set objectives.Emphasis was placed on scaling up production and refining production methods.The statement that is not correct regarding the objectives of the Second Five-Year Plan is "Expansion of the consumer goods sector." Hence the correct answer is option C.
Q246
Which among the following is/are the objective(s) of setting up of Planning Commission in the 1950s in India?1. To increase production and offering opportunities to all for employment2. To make assessment of all resources of the country Select the answer using the code given below :
✓ Correct answer: c) Both 1 and 2
ExplanationThe Planning Commission was reporting directly to the Prime Minister of India.It was established on 15 March 1950, with Prime Minister Jawaharlal Nehru as the chairman1. To increase production and offering opportunities to all for employment: This was one of the primary objectives of the Planning Commission, as it aimed to formulate plans to boost economic growth and create jobs.2. To make assessment of all resources of the country: This was also a key objective, as the Planning Commission needed to evaluate the country's resources to plan effectively for development.Hence the correct answer is option C.
Q247
Social theorists in the nineteenth and twentieth centuries emphasised the emergence of industrialisation, urbanisation, secularisation and bureaucratisation as hallmarks of:
✓ Correct answer: a) Modernity
ExplanationKey Concept: Social theorists in the nineteenth and twentieth centuries identified industrialization, urbanization, secularization, and bureaucratization as key features or hallmarks of modernity.These developments represented significant shifts in social, economic, and political structures, marking a departure from traditional ways of life.Explanation: Industrialization refers to the transition from agrarian economies to industrial ones, characterized by the mass production of goods using mechanized processes.Urbanization involves the growth of cities and the migration of people from rural areas to urban centres in search of employment and better opportunities.Secularization entails the diminishing influence of religion in various aspects of public life, including governance, education, and social norms.Bureaucratization refers to the organization of institutions and governance systems according to rational, hierarchical structures, often involving specialized roles and standardized procedures.Together, these processes represent the transformative nature of modernity, shaping societies in profound ways and influencing the trajectory of human civilization.Hence the correct answer is option A.
Q248
Before the inception of the First Five year Plan, which among the following Plans were initiated in India?1. Bombay Plan2. Peoples Plan3. Sarvodaya Plan4. Gandhian Plan Select the answer using the code given below :
✓ Correct answer: d) 1, 2, 3 and 4
ExplanationBefore the inception of the First Five-Year Plan in India, several plans were proposed, including:1. Bombay Plan (1944) - A plan drafted by industrialists and economists that aimed at a mixed economy with a focus on economic planning and social justice.The Bombay Plan was an economic blueprint for India written in 1944 by a group of industrialists and technocrats.2. People’s Plan (1944) - The People's Plan was a 10-year economic plan for India that was drafted in 1944 by Manabendra Nath Roy on behalf of the Indian Federation of Labour's Post-War Reconstruction Committee.The plan was based on Marxist socialism and Soviet- style planning and was an alternative to the Bombay Plan.3. Sarvodaya Plan (1950) - Inspired by Gandhian principles, it focused on the upliftment of all sections of society and emphasized rural development.4. Gandhian Plan (1950) - Also based on Gandhian principles, this plan called for a decentralized economy and a focus on village self-sufficiency.Thus, all four plans were initiated in India before the First Five-Year Plan.Hence the correct answer is option D.
Q249
Which among the following statements with regard to Five Year Plans in India is/are correct?1. The First and Ninth five year plans accorded high priority to agriculture2. The Third Plan was based on the Harrod- Domar Model3. Seventh Plan focused on food, work and productivity4. The Ninth five year plan emphasized on massive investments in public sector Select the answer using the code given below :
✓ Correct answer: b) 1 and 3
Explanation1. The First and Ninth five-year plans accorded high priority to agriculture.Correct.Both the First Five- Year Plan (1951-1956) and the Ninth Five-Year Plan (1997- 2002) emphasized agriculture.The First Plan aimed to improve food production and self-sufficiency, while the Ninth Plan focused on agricultural growth and rural development to address poverty.The Third Plan was based on the Harrod-Domar Model.Incorrect.The Third Five-Year Plan (1961-1966) was not based on the Harrod-Domar model but focused on investments in agriculture and industrial sectors.It aimed for balanced development, emphasizing agriculture, as well as heavy and basic industries.Seventh Plan focused on food, work, and productivity.Correct.The Seventh Five- Year Plan (1985-1990) prioritized improving food production, generating employment, and increasing productivity.It was aligned with the objective of ensuring "food, work, and productivity" for growth and equity.The Ninth five-year plan emphasized massive investments in the public sector. | | Defence Incorrect.The Ninth Plan marked a shift away from the earlier emphasis on the public sector.Instead of focusing on massive public sector investments, it reflected the changing economic approach toward liberalization and indicative planning, with increasing involvement of the private sector and reduced government control.Hence the correct answer is option B.
Q250
Which of the following were the years of Annual Plans?
✓ Correct answer: b) 1966-1969
ExplanationImplemented between the Third Five-Year Plan (1961–1966) and the Fourth Five-Year Plan (1969–1974).1. Reason for Annual Plans: Post-War Economy: The 1965 Indo-Pak War strained national resources. | | Defence Economic Challenges: Severe droughts and the 1966 devaluation of the Indian Rupee created financial instability.Planning Pause: Difficulties in executing a full Five-Year Plan led to adoption of yearly plans focusing on immediate priorities.2. Characteristics: Each plan lasted one year, targeting short-term resource allocation and urgent economic needs.Sometimes referred to as a ‘Plan Holiday’, though planning continued in a scaled-down manner.3. Objective: To stabilize the economy and prepare for the Fourth Five-Year Plan, which resumed comprehensive planning from 1969. This phase highlights India’s flexibility in economic planning during times of crisis.
Q251
Under which one of the following initiatives does the NITI Aayog support interested States to establish a State Institution for Transformation (SIT) ?
✓ Correct answer: c) State Support Mission
ExplanationState Support Mission (SSM) is an initiative by NITI Aayog to support states in institutional reforms and capacity building.Under this initiative, NITI Aayog helps interested states to establish a State Institution for Transformation (SIT), which acts as a dedicated body for planning, monitoring, and implementing transformative reforms.Hence, the correct answer is option C.
Q252
Ethereum, Tether, Solana and Cardano are all forms of
✓ Correct answer: a) Crypto currency
ExplanationEthereum, Tether, Solana, and Cardano are all cryptocurrencies, which are digital or virtual currencies using cryptography for secure transactions.They operate on blockchain technology and are decentralised, meaning they are not controlled by any central authority or government.Hence, the correct answer is option A.
Q253
With which of the following was the Bretton Woods System NOT associated
✓ Correct answer: d) Establishment of a monetary system based on floating exchange rate
ExplanationThe Bretton Woods system, established in 1944, created a framework for international monetary and financial relations.Under this system: Fixed Exchange Rates: Currencies were pegged to the U.S. dollar, which was convertible to gold at a fixed rate of $35 per ounce.This arrangement aimed to provide stability in international trade and investment.International Monetary Fund (IMF): The IMF was created to oversee the international monetary system, provide financial assistance to countries in need, and promote global economic stability.International Bank for Reconstruction and Development (IBRD): Now part of the World Bank, the IBRD was established to aid in the reconstruction of war-torn Europe and to support economic development in other nations.Economic Recovery after WWII: The system facilitated the rebuilding of economies devastated by World War II, promoting international trade and investment.The Bretton Woods system collapsed in the early 1970s, leading to the adoption of floating exchange rates, where currency values are determined by market forces without direct government or central bank intervention.
Q254
Which one among the following plans is also known as Mahalanobis Plan?
✓ Correct answer: b) Second Five Year Plan
ExplanationThe Second Five-Year Plan (1956–1961) is also known as the Mahalanobis Plan, named after P. C. Mahalanobis, a renowned Indian statistician.Key focus: Rapid industrialization, especially heavy industries and the public sector.Emphasized capital goods production to build a strong industrial base.Adopted the two-sector model (agriculture and industry) to achieve long-term economic growth.Other plans: First Five-Year Plan → Focused on agriculture and irrigation.Third Five-Year Plan → Growth with stability; emphasized self-reliance.Sixth Five-Year Plan → Focused on modernization, technology, and employment.The Mahalanobis model essentially guided India’s strategy for industrial-led growth.
Q255
Consider the following statements : I. The Second Five-Year Plan sought to promote development which would establish socialistic pattern of society in India. II. Between 1966 and 1969, three Annual Plans were formulated. III. The Ninth Five-Year Plan could not take off at its stipulated time in the 60th year of India's Independence. Which of the statements given above are correct?
✓ Correct answer: a) I and II only
ExplanationThe correct answer is A) I and II only.Statement I is correct: The Second Five-Year Plan (1956–1961), based on the Mahalanobis Model, explicitly aimed to achieve a "socialistic pattern of society." It prioritized heavy industrialization and the public sector to reduce income inequality.Statement II is correct: Following the Indo-Pak war and a severe drought, the Fourth Plan was delayed.Instead, three Annual Plans (1966–1969) were implemented, a period often called the "Plan Holiday." Statement III is incorrect: The Ninth Plan (1997–2002) was launched on time.The statement mistakenly suggests a delay during the 60th year of Independence (2007), which actually coincided with the start of the Eleventh Plan (2007–2012).
Q256
Consider the following statements relating to planning in India :1. In the year 1938, the National Planning Committee was set up in India under the chairmanship of Jawaharlal Nehru.2. The Bombay Plan was prepared by the Indian industrialists.3. Acharya Kripalini prepared the Gandhian Plan. Which of the statements given above is/are correct?
✓ Correct answer: c) 1 and 2 only
ExplanationKey Concept: The National Planning Committee was set up by then President of the Indian National Congress Subash Chandra Bose in 1938 to frame a national plan for India’s development.Explanation: The Gandhian Plan was prepared by S.N. Agarwal in 1944. The main aim of this plan was to focus on Indian agriculture.The Bardoli session of the Indian National Congress was held in 1938. In this Session, Jawaharlal Nehru first discussed the Planning Commission.The Bombay Plan was a set of proposals by the group of small industrialist and influential business leaders for the development of the post- independence economy of India in 1944 and 1945. Hence, the correct answer is Option C. Additional Information:1. The Planning Commission was dissolved in 2014 and NITI Aayog was formed.
Q257
‘Inside trading’ is related to?
✓ Correct answer: a) Share market
ExplanationInsider Trading refers to buying or selling shares of a company based on non-public, price-sensitive information.It is considered illegal and unethical because it gives an unfair advantage to certain investors.Insider trading is closely monitored and regulated by bodies like SEBI (Securities and Exchange Board of India) in India.The aim is to ensure transparency and fairness in the stock market.
Q258
Which term in economics is a broad measurement of a nation’s overall economic activity. It is the monetary value of all the finished goods and service produced with a country’s border in a specific time period.
✓ Correct answer: a) GDP
ExplanationGDP (Gross Domestic Product) measures the total monetary value of all final goods and services produced within a country's borders over a specific period (usually a year or quarter).GNP (Gross National Product) includes income earned by a country’s residents both domestically and abroad.Hence, the correct answer is option A.
Q259
The system of issuing and monitoring of money in the market is known as:
✓ Correct answer: c) Minimum reserve ratio
ExplanationMinimum Reserve Ratio is sometimes used as a tool in monetary policy, influencing a country’s borrowing and interest rates by affecting the funds available for banks to give loans.Liquid assets to be maintained by banks include cash, gold, and unencumbered approved securities as mandated under Section 24 of the Banking Regulation Act, 1949. As per Section 22 of the RBI Act, the Reserve Bank of India (RBI) is solely authorized to issue currency notes, except the one-rupee note, which is issued by the Finance Secretary of the Government of India.RBI controls the circulation of banknotes to ensure public confidence in the genuineness, quality, and credibility of the currency.The presence of a single authority (RBI) for currency issuance helps maintain uniformity and effective control over the flow of credit in and out of the market.Hence, the correct answer is option C.
Q260
Convertibility of rupee implies
✓ Correct answer: c) Freely permitting the conversation of rupee to other currencies and vice-versa
ExplanationConvertibility of rupee refers to the freedom to convert Indian rupee into foreign currencies and vice versa.Current Account Convertibility: India adopted full current account convertibility in 1994 (as per IMF Article VIII).It allows free exchange for trade in goods, services, travel, education, and remittances.No permission from RBI is needed for these transactions.Capital Account Convertibility: India does not allow full capital account convertibility.Capital transactions (like investment, property buying, foreign borrowing) are partially allowed with restrictions.Recommended in Tarapore Committee Reports (1997 & 2006).RBI and Government of India regulate the degree of convertibility to ensure economic stability.Risks of Full Capital Account Convertibility: May lead to capital flight (sudden withdrawal of money).Can cause exchange rate volatility and financial crisis.Convertibility helps in: Promoting foreign trade and investment Boosting confidence in Indian economy Improving balance of payments management
Q261
In banking sector, C stands in CBS for ?
✓ Correct answer: b) Core
ExplanationIn the banking sector, CBS stands for Core Banking Solution.Core refers to Centralized Online Real- time Environment.It enables customers to access their bank accounts and perform transactions from any branch of the bank that is on the CBS network.CBS allows functions like deposit, withdrawal, loan processing, and account management to be done in real-time, regardless of the branch location.
Q262
Fiscal policy is connected with
✓ Correct answer: c) Public revenue & expenditure
ExplanationFiscal policy refers to the government’s use of revenue collection (taxation) and expenditure (spending) to influence the economy.It includes: Public revenue: taxes, fees, etc. Public expenditure: government spending on infrastructure, health, education, etc. It is used to achieve objectives like economic growth, employment, and price stability.
Practice more Defence Economics PYQs
Browse every Economics chapter, or explore the full Defence question bank.
📈 All Economics chapters →