Economy Preliminary Previous year Questions – UPSC Prelims (2011-2023) Part 1 – Vetri Padi | TNPSC | GROUP Exam

Economy UPSC Preliminary Question and Answer: Part 1 (2023-2017)

2023

1. Consider the following statements:

Statement-I: Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors is exempted from tax, but the dividend is taxable.

Statement-II: InviTs are recognized as borrowers under the ‘Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002’.

Which one of the following is correct in respect of the above statements?

(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-1

(b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-1

(d) Statement-I is incorrect Statement-II is correct

Answer:

(d) Statement-I is incorrect Statement-II is correct

2. Consider the following statements :

Statement-I: In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes.

Statement-II: Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means.

Which one of the following is correct in respect of the above statements?

(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-1

(b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-1

(d) Statement-I is incorrect but Statement-II is correct

Answer:

(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-1

3. Consider the following statements:

Statement-I: Carbon markets are likely to be one of the most widespread tools in the fight against climate change.

Statement-II: Carbon markets transfer resources from the private sector to the State.

Which one of the following is correct in respect of the above statements?

(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

(b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

(d) Statement-I is incorrect but Statement-II is correct

Answer:

(c) Statement-I is correct but Statement-II is incorrect

4. Which one of the following activities of the Reserve Bank of India is considered to be part of ‘sterilization’?

(a) Conducting ‘Open Market Operations’

(b) Oversight of settlement and payment systems

(d) Regulating the functions of Non-banking Financial Institutions

Answer:

(a) Conducting ‘Open Market Operations’

5. Consider the following markets:

Government Bond Market
Call Money Market
Treasury Bill Market
Stock Market

How many of the above are included in capital markets?

(a) Only one

(b) Only two

(d) All four

Answer:

(b) Only two

6. Which one of the following best describes the concept of ‘Small Farmer Large Field’?

(a) Resettlement of a large number of people, uprooted from their countries due to war, by giving them a large cultivable land which they cultivate collectively and share the produce

(b) Many marginal farmers in an area organize themselves into groups and synchronize and harmonize selected agricultural operations

(c) Many marginal farmers in an area together make a contract with a corporate body and surrender their land to the corporate body for a fixed term for which the corporate body makes a payment of agreed amount to the farmers

(d) A company extends loans, technical knowledge and material inputs to a number of small farmers in an area so that they produce the agricultural commodity required by the company for its manufacturing process and commercial production

Answer:

(b) Many marginal farmers in an area organize themselves into groups and synchronize and harmonize selected agricultural operations

7. Consider the following statements:

The Government of India provides Minimum Support Price for niger (Guizotia abyssinica) seeds.
Niger is cultivated as a Kharif crop.
Some tribal people in India use niger seed oil for cooking.

How many of the above statements are correct?

(a) Only one

(b) Only two

(d) None

Answer:

(c) All three

8. Consider the investments in the following assets:

Brand recognition
Inventory
Intellectual property
Mailing list of clients

How many of the above are considered intangible investments?

(a) Only one

(b) Only two

(d) All four

Answer:

(c) Only three

9. In the context of finance, the term ‘beta’ refers to

(a) the process of simultaneous buying and selling of an asset from different platforms

(b) an investment strategy of a portfolio manager to balance risk versus reward

(d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market

Answer:

(d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market

10. Consider the following statements:

The Self-Help Group (SHG) programme was originally initiated by the State Bank of India by providing microcredit to the financially deprived.
In an SHG, all members of a group take responsibility for a loan that an individual member takes.
The Regional Rural Banks and Scheduled CommercialBanks support SHGs.

How many of the above statements are correct?

(a) Only one

(b) Only two

(d) None

Answer:

(b) Only two

11. Consider the following heavy industries:

Fertilizer plants
Oil refineries
Steel plants

Green hydrogen is expected to play a significant role in decarbonizing how many of the above industries?

(a) Only one

(b) Only two

(d) None

Answer:

(c) All three

12. Consider, the following statements:

Statement-I: India accounts for 3.2% of global export of goods.

Statement-II: Many local companies and some foreign companies operating in India have taken advantage of India’s ‘Production-linked Incentive’ scheme.

Which one of the following is correct in respect of the above statements?

(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

(b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

(d) Statement-I is incorrect but Statement-II is correct

Answer:

(d) Statement-I is incorrect but Statement-II is correct

13. Consider the following statements with reference to India :

According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the ‘medium enterprises’ are those with investments in plant and machinery between `15 crore and `25 crore.
All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(b) 2 only

14. With reference to Central Bank digital currencies, consider the following statements:

It is possible to make payments in a digital currency without using US dollar or SWIFT system.
A digital currency can be distributed with condition programmed into it such as a time-frame for spending it.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(c) Both 1 and 2

2022

1. Consider the following statements:

1. Gujarat has the largest solar park in India.

2. Kerala has a fully solar powered International Airport.

3. Goa has the largest floating solar photovoltaic project in India.

Which of the statements given above is/are correct?

(a) 1 and 2

(b) 2 only

(d) 3 only

Answer:

(b) 2 only

2. Consider the following statements:

1. Tight monetary policy of US Federal Reserve could lead to capital flight.

2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs).

3. Devaluation of domestic currency decreases the currency risk associated with ECBS.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(a) 1 and 2 only

3. Consider the following statements:

1. In India, credit rating agencies are regulated by Reserve Bank of India.

2. The rating agency popularly known as ICRA is a public limited company.

3. Brickwork Ratings is an Indian credit rating agency.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(b) 2 and 3 only

4. With reference to the ‘Banks Board Bureau (BBB)’, which of the following statements are correct?

1. The Governor of RBI is the Chairman of BBB.

2. BBB recommends for the selection of heads for Public Sector Banks.

3. BBB helps the Public Sector Banks in developing strategies and capital raising plans.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(b) 2 and 3 only

5. With reference to Convertible Bonds, consider the following statements:

1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest.

2. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(c) Both 1 and 2

6. In India, which one of the following is responsible for maintaining price stability by controlling inflation?

(a) Department of Consumer Affairs

(b) Expenditure Management Commission

(d) Reserve Bank of India

Answer:

(d) Reserve Bank of India

7. With reference to Non-Fungible Token (NFTs), consider the following statements:

1. They enable the digital representation of physical assets.

2. They are unique cryptographic tokens that exist on a blockchain.

3. They can be traded or exchanged at equivalency and therefore can be used as a medium of commercial transactions.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(a) 1 and 2 only

8. With reference to the Indian economy, consider the following statements:

1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee.

2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness.

3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER.

Which of the above statements are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(c) 1 and 3 only

9. With reference to the Indian economy, consider the following statements:

1. If the inflation is too high, Reserve Bank of India (RBI) is likely to buy government securities.

2. If the rupee is rapidly depreciating, RBI is likely to sell dollars in the market.

3. If interest rates in the USA or European Union were to fall, that is likely to induce RBI to buy dollars.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(b) 2 and 3 only

10. With reference to the Indian economy, what are the advantages of “Inflation-Indexed Bonds (IIBs)”?

1. Government can reduce the coupon rates on its borrowing by way of IIBs.

2. IIBS provide protection to the investors from uncertainty regarding inflation.

3. The interest received as well as capital gains on IIBs are not taxable.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(a) 1 and 2 only

11. With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?

1. They can sell their own goods in addition to offering their platforms as market-places.

2. The degree to which they can own big sellers on their platforms is limited.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(b) 2 only

12. Which of the following activities constitute real sector in the economy?

1. Farmers harvesting their crops

2. Textile mills converting raw cotton into fabrics

3. A commercial bank lending money to a trading company.

4. A corporate body issuing Rupee Denominated Bonds overseas.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2, 3 and 4 only

(d) 1, 2, 3 and 4

Answer:

(a) 1 and 2 only

13. Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with referece to India?

(a) An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment.

(b) A foreign company investing in Indian and paying taxes to the country of its base on the profits arising out of its investment.

(c) An Indian company purchases tangible assests in a foreign country and sells such assets after their value increases and transfers the proceeds to India.

(d) A foreign compnay transfers shares and such shares derive their substantial value from assest located in India.

Answer:

(d) A foreign compnay transfers shares and such shares derive their substantial value from assest located in India.

14. With reference to the expenditure made by an organization or a company, which of the following statements is/are correct?

1. Acquiring new technology is capital expenditure.

2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(a) 1 only

15. With reference to the Indian economy, consider the following statements:

1. A share of the household financial savings goes towards government borrowings.

2. Dated securities issued at marked-related rates in auctions form a large component of internal debt.

Which of the above statements is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(c) Both 1 and 2

16. Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which of the following:

(a) Asian Development Bank

(b) International Monetary Fund

(d) World Bank

Answer:

(b) International Monetary Fund

17. With reference to the “G20 Common Framework”, consider the following statements:

It is an initiative endorsed by the G20 together with the Paris Club.
It is an initiative to support Low Income Countries with unsustainable debt.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer:

(c) Both 1 and 2

18. With reference to Ayushman Bharat Digital Mission, consider the following statements:

Private and public hospitals must adopt it.
As it aims to achieve universal health coverage, every citizen of India should be part of it ultimately.
It has seamless portability across the country.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer:

(b) 3 only

2021

1. The money multiplier in an economy increases with which one of the following?

(a) Increase in the Cash Reserve Ratio in the banks

(b) Increase in the Statutory Liquidity Ratio in the banks

(d) Increase in the population of the country

Answer:

(c) Increase in the banking habit of the people

2. With reference to Indian economy, demand-pull inflation can be caused/increased by which of the following?

Expansionary policies
Fiscal stimulus
Inflation-indexing wages
Higher purchasing power
Rising interest rates

Select the correct answer using the code given below.

(a) 1, 2 and 4 only

(b) 3, 4 and 5 only

(d) 1, 2, 3, 4 and 5

Answer:

(a) 1, 2 and 4 only

3. With reference to India, consider the following statements:

Retail investors through demat account can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in primary market.
The ‘Negotiated Dealing System-Order Matching’ is a government securities trading platform of the Reserve Bank of India.
The ‘Central Depository Services Ltd.’ is jointly promoted by the Reserve Bank of India and the Bombay Stock Exchange.

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 2 only

(d) 2 and 3 only

Answer:

(b) 1 and 2 only

4. In India, the central bank’s function as the ‘lender of last resort’ usually refers to which of the following?

Lending to trade and industry bodies when they fail to borrow from other sources
Providing liquidity to the banks having a temporary crisis
Lending to governments to finance budgetary deficits

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 only

(d) 3 only

Answer:

(b) 2 only

5. Consider the following statements:

The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government.
Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest.
The Governor of the RBI draws his power from the RBI Act.

Which of the above statements are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(c) 1 and 3 only

6. With reference to casual workers employed in India, consider the following statements:

All casual workers are entitled for Employees Provident Fund coverage.
All casual workers are entitled for regular working hours and overtime payment.
The government can by a notification specify that an establishment or industry shall pay wages only through its bank account.

Which of the above statements are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(b) 2 and 3 only

7. Which among the following steps is most likely to be taken at the time of an economic recession?

(a) Cut in tax rates accompanied by increase in interest rate

(b) Increase in expenditure on public projects

(d) Reduction of expenditure on public project

Answer:

(b) Increase in expenditure on public projects

8. Consider the following statements:

Other things remaining unchanged, market demand for a good might increase if

Price of its substitute increase
Price of its complement increase
The good is an inferior good and income of the consumers increases
Its price falls

Which of the above statements are correct?

(a) 1 and 4 only

(b) 2, 3 and 4 only

(d) 1, 2 and 3 only

Answer:

(a) 1 and 4 only

9. With reference to ‘Urban Cooperative Banks’ in India, consider the following statements:

They are supervised and regulated by local boards set up by the State Governments.
They can issue equity shares and preference shares.
They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(b) 2 and 3 only

10. Indian Government Bond Yields are influenced by which of the following?

Actions of the United States Federal Reserve
Actions of the Reserve Bank of India
Inflation and short-term interest rates

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 only

(d) 1, 2 and 3

Answer:

(d) 1, 2 and 3

11. Consider the following:

Foreign currency convertible bonds
Foreign institutional investment with certain conditions
Global depository receipts
Non-resident external deposits

Which of the above can be included in Foreign Direct Investments?

(a) 1, 2 and 3 only

(b) 3 only

(d) 1 and 4 only

Answer:

(a) 1, 2 and 3 only

12. Consider the following statements:

The effect of devaluation of a currency is that it necessarily

Improves the competitiveness of the domestic exports in the foreign markets
Increases the foreign value of domestic currency
Improves the trade balance

Which of the above statements is/are correct?

(a) 1 only

(b) 1 and 2 only

(d) 2 and 3 only

Answer:

(a) 1 only

13. Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?

(a) Diversion of resources to the purchase of real estate and investment in luxury housing

(b) Investment in unproductive activities and purchase of precious stones, jewellery, gold, etc.

(d) Loss of revenue to the State Exchequer due to tax evasion

Answer:

(d) Loss of revenue to the State Exchequer due to tax evasion

14. Which of the following is likely to be the most inflationary in its effects?

(a) Repayment of public debt

(b) Borrowing from the public to finance a budget deficit

(d) Creation of new money to finance a budget deficit

Answer:
(d) Creation of new money to finance a budget deficit

2020

1. If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India?

Not depending on short-term foreign borrowings
Opening up to more foreign banks
Maintaining full capital account convertibility

Select the correct answer using the code given below:

(a) 1 only

(b) 1 and 2 only

(d) 1, 2 and 3

Answer:

(a) 1 only

2. If you withdraw ₹1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be

(a) to reduce it by ₹1,00,000

(b) to increase it by ₹1,00,000

(d) to leave it unchanged

Answer:

(d) to leave it unchanged

3. “Gold Tranche” (Reserve Tranche) refers to

(a) a loan system of the World Bank

(b) one of the operations of a Central Bank

(d) a credit system granted by IMF to its members

Answer:

(d) a credit system granted by IMF to its members

4. In India, which of the following can be considered as public investment agriculture?

Fixing Minimum Support Price for agricultural produce of all corps
Computerization of Primary Agricultural Credit Societies
Social Capital development
Free electricity supply to farmers
Waiver of agricultural loans by the banking system
Setting up of cold storage facilities by the governments

Select the correct answer using the code given below :

(a) 1, 2 and 5 only

(b) 1, 3, 4 and 5 only

(d) 1, 2, 3, 4, 5 and 6

Answer:

(c) 2, 3 and 6 only

5. What is the importance of the term “Interest Coverage Ratio” of a firm in India?

It helps in understanding the present risk of a firm that a bank is going to give loan to.
It helps in evaluating the emerging risk of a firm that a bank is going to give loan to.
The higher a borrowing firm’s level of Interest Coverage Ratio, the worse is its ability to service its debt.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 only

(d) 1, 2 and 3

Answer:

(a) 1 and 2 only

6. Which of the following factors/policies were affecting the price of rice in India in the recent past?

Minimum Support Price
Government’s trading
Government’s stockpiling
Consumer subsidies

Select the correct answer using the code given below:

(a) 1, 2 and 4 only

(b) 1, 3 and 4 only

(d) 1, 2, 3 and 4

Answer:

(d) 1, 2, 3 and 4

7. Consider the following statements:

The value of Indo-Sri Lanka trade has consistently increased in the last decade.
“Textile and textile articles” constitute an important item of trade between India and Bangladesh.
In the last five years, Nepal has been the largest trading partner of India in South Asia.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(d) 1, 2 and 3

Answer:

(d) 1, 2 and 3

8. Under the Kisan credit card scheme, short-term credit support is given to farmers for which of the following purposes?

Working capital for maintenance of farm assets
Purchase of combine harvesters, tractors and mini trucks
Consumption requirements of farm households
Post-harvest expenses
Construction of family house and setting up of village cold storage facility

Select the correct answer using the code given below :

(a) 1, 2 and 5 only

(b) 1, 3 and 4 only

(d) 1, 2, 3, 4 and 5

Answer:

(b) 1, 3 and 4 only

9. Consider the following statements:

The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
The WPI does not capture changes in the prices of services, which CPI does.
Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(d) 1, 2 and 3

Answer:

(a) 1 and 2 only

10. Consider the following statements:

In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(d) Neither 1 nor 2

11. With reference to the Indian economy, consider the following statements:

‘Commercial Paper’ is a short-term unsecured promissory note.
‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation.
‘Call Money’ is a short-term finance used for interbank transactions.
‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 4 only

(d) 2, 3 and 4 only

Answer:

(c) 1 and 3 only

12. With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic?

(a) It is the investment through capital instruments essentially in a listed company.

(b) It is a largely non-debt creating capital flow.

(d) It is the investment made by foreign institutional investors in the Government securities.

Answer:

(b) It is a largely non-debt creating capital flow.

13. With reference to the international trade of India at present, which of the following statements is/are correct?

India’s merchandise exports are less than its merchandise imports.
India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years.
India’s exports of services are more than its imports of services.
India suffers from an overall trade/current account deficit.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 and 4 only

(d) 1, 3 and 4 only

Answer:

(d) 1, 3 and 4 only

14. The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of

(a) Crude oil

(b) Bullion

(d) Uranium

Answer:

(a) Crude oil

15. In the context of the Indian economy, non-financial debt includes which of the following?

Housing loans owed by households
Amounts outstanding on credit cards
Treasury bills

Select the correct answer using the code given below:

(a) 1 only

(b) 1 and 2 only

(d) 1, 2 and 3

Answer:

(d) 1, 2 and 3

16. With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?

Quantitative restrictions on imports by foreign investors are prohibited.
They apply to investment measures related to trade in both goods and services.
They are not concerned with the regulation of foreign investment.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 only

(d) 1, 2 and 3

Answer:

(c) 1 and 3 only

17. If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do?

Cut and optimize the Statutory Liquidity Ratio
Increase the Marginal Standing Facility Rate
Cut the Bank Rate and Repo Rate

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 only

(d) 1, 2 and 3

Answer:

(b) 2 only

18. With reference to the Indian economy after the 1991 economic liberalization, consider the following statements:

Worker productivity (Rs. per worker at 2004 — 05 prices) increased in urban areas while it decreased in rural areas.
The percentage share of rural areas in the workforce steadily increased.
In rural areas, the growth in non-farm economy increased.
The growth rate in rural employment decreased.

Which of the statements given above is/are Correct?

(a) 1 and 2 only

(b) 3 and 4 only

(d) 1, 2 and 4 only

Answer:

(b) 3 and 4 only

19. Consider the following statements:

In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks.
One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

Answer:

(b) 2 only

20. In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits?

Cost of restoration of the computer system in case of malware disrupting access to one’s computer
Cost of a new computer if some miscreant wilfully damages it, if proved so
Cost of hiring a specialized consultant to minimize the loss in case of cyber extortion
Cost of defence in the Court of Law if any third party files a suit

Select the correct answer using the code given below:

(a) 1, 2 and 4 only

(b) 1, 3 and 4 only

(d) 1, 2, 3 and 4

Answer:

(b) 1, 3 and 4 only

2019

1. With reference to land reforms in independent India, which one of the following statements is correct?

(a) The ceiling laws were aimed at family holdings and not individual holdings.

(b) The major aim of land reforms was providing agricultural land to all the landless.

(d) Land reforms permitted no exemptions to the ceiling limits.

Answer:

(b) The major aim of land reforms was providing agricultural land to all the landless.

2. In a given year in India, official poverty lines are higher in some States than in others because

(a) poverty rates vary from State to State

(b) price levels vary from State to State

(d) quality of public distribution varies from State to State

Answer:

(b) price levels vary from State to State

3. Among the following, which one is the largest exporter of rice in the world in the last five years?

(a) China

(b) India

(d) Vietnam

Answer:

(b) India

4. Consider the following statements:

Coal sector was nationalized by the Government of India under Indira Gandhi.
Now, coal blocks are allocated on lottery basis.
Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(a) 1 only

5. Consider the following statements:

The United Nations Convention against Corruption (UNCAC) has a ‘Protocol against the Smuggling of Migrants by Land, Sea and Air’.
The UNCAC is the ever-first legally binding global anti-corruption instrument.
A highlight of the United Nations Convention against Transnational Organized Crime (UNTOC) is the inclusion of a specific chapter aimed at returning assets to their rightful owners from whom they had been taken illicitly.
The United Nations Office on Drugs and Crime (UNODC) is mandated by its member States to assist in the implementation of both UNCAC and UNTOC.

Which of the statements given above are correct?

(a) 1 and 3 only

(b) 2, 3 and 4 only

(d) 1, 2, 3 and 4

Answer:

(c) 2 and 4 only

6. Consider the following statements:

As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018
if rules for fixed-term employment are implemented, it becomes easier for the firms/companies to lay off workers
no notice of termination of employment shall be necessary in the case of temporary workman

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(c) Both 1 and 2

7. The Service Area Approach was implemented under the purview of

(a) Integrated Rural Development Programme

(b) Lead Bank Scheme

(d) National Skill Development Mission

Answer:

(b) Lead Bank Scheme

8. Consider the following statements:

Most of India’s external debt is owed by governmental entities.
All of India’s external debt is denominated in US dollars.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(d) Neither 1 nor 2

9. Which of the following is not included in the assets of a commercial bank in India?

(a) Advances

(b) Deposits

(d) Money at call and short notice

Answer:

(b) Deposits

10. In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis?

The foreign currency earnings of India’s IT sector
Increasing the government expenditure
Remittances from Indians abroad

Select the correct answer using the code given below:

(a) 1 only

(b) 1 and 3 only

(d) 1, 2 and 3

Answer:

(b) 1 and 3 only

11. Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

(a) Certificate of Deposit

(b) Commercial Paper

(d) Participatory Note

Answer:

(d) Participatory Note

12. With reference to India’s Five-Year Plans, which of the following statements is/are correct?

From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.
The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 only

(d) 1, 2 and 3

Answer:

(a) 1 and 2 only

13. What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

(a) To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit

(b) To support the infrastructure projects of Central and State Governments

(d) To aim at faster resolution of stressed assets of Rs 50 crore or more which are under consortium lending

Answer:

(d) To aim at faster resolution of stressed assets of Rs 50 crore or more which are under consortium lending

14. The Chairmen of public sector banks are selected by the

(a) Banks Board Bureau

(b) Reserve Bank of India

(d) Management of concerned bank

Answer:

(a) Banks Board Bureau

15. Consider the following statements:

Petroleum and Natural Gas Regulatory Board (PNGRB) is the first regulatory body set up by the Government of India.
One of the tasks of PNGRB is to ensure competitive markets for gas.
Appeals against the decisions of PNGRB go before the Appellate Tribunals for Electricity.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer:

(b) 2 and 3 only

16. Which one of the following is not a sub-index of the World Bank’s ‘Ease of Doing Business Index’?

(a) Maintenance of law and order

(b) Paying taxes

(d) Dealing with construction permits

Answer:

(a) Maintenance of law and order

17. In India, ‘extend producer responsibility’ was introduced as an important feature in which of the following?

(a) The Bio-medical Waste (Management and Handling) Rules, 1998

(b) The Recycled Plastic (Manufacturing and Usage) Rules, 1999

(d) The Food Safety and Standard Regulations, 2011

Answer:

(c) The e-Waste (Management and Handling) Rules, 2011

18. The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus

(a) transportation cost only

(b) interest cost only

(d) procurement incidentals and charges for godowns

Answer:

(c) procurement incidentals and distribution cost

19. Consider the following statements:

Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.
In terms of PPP dollars, India is the sixth largest economy in the world.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Answer:

(a) 1 only

20. Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

(a) Spices

(b) Fresh fruits

(d) Vegetable oils

Answer:

(d) Vegetable oils

21. Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?

(a) Curbing imports of non-essential goods and promoting exports

(b) Encouraging Indian borrowers to issue rupee denominated Masala Bonds

(d) Following an expansionary monetary policy

Answer:

(d) Following an expansionary monetary policy

22. Consider the following statements:

The Reserve Bank of India’s recent directives relating to ‘Storage of Payment System Data, popularly known as data diktat, command the payment system providers that

they shall ensure that entire data relating to payment systems operated by them are stored in a system only in India
they shall ensure that the systems are owned and operated by public sector enterprises
they shall submit the consolidated system audit report to the Comptroller and Auditor General of India by the end of the calendar year

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 2 only

(d) 1, 2 and 3

Answer:

(a) 1 only

23. The money multiplier in an economy increases with which one of the following?

(a) Increase in the cash reserve ratio

(b) Increase in the banking habit of the population

(d) Increase in the population of the country

Answer:

(b) Increase in the banking habit of the population

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Economy Preliminary Previous year Questions – UPSC Prelims (2011-2023) Part 1

Economy UPSC Preliminary Question and Answer: Part 1 (2023-2017)

UPSC Economy Preliminary Question with Answers (2023-2019) Part 1

UPSC Economy Preliminary Question with Answers (2018-2015) Part 2

UPSC Economy Preliminary Question with Answers (2014-2011) Part 3

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