Clear UPSC IAS Prelims 2021 through 10000 Expected MCQs: Practice Solved Test 21

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1. With reference to ‘Powers and Functions of the Chief Minister’, consider the following statements:

  1. He can recommend the dissolution of the legislative assembly to the speaker of the house at any time.
  2. He is the crisis manager-in-chief at the political level during emergencies.
  3. He allocates and reshuffles the portfolios among ministers.

Which of the given above statements is/are correct?

 (a) 1 and 2 only

 (b) 2 and 3 only

 (c) 1 and 3 only

 (d) 1, 2 and 3

2. With reference to parliamentary devices to control the executive in India, consider following statements:

  1. A motion of “No Confidence Motion” against the Government can be introduced only in the Lok Sabha.
  2. The Constitution of India does not mention about either a Confidence or a No Confidence Motion.

Which of the given above statements is/are incorrect?

 (a) 1 only

 (b) 2 only

 (c) Both 1 and 2

 (d) Neither 1 nor 2

3. Among the following cities, which one lies on a longitude closest to that of Delhi?

 (a) Gwalior

 (b) Bhopal

 (c) Nagpur

 (d) Pune

4. With reference to Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN), consider the following statements:

  1. The fund is a public charitable trust with the Prime Minister as its Chairman.
  2. The fund consists entirely of public contributions and does not get any budgetary support.

Which of the given above statements is/are correct?

 (a) 1 only

 (b) 2 only

 (c) Both 1 and 2

 (d) Neither 1 nor 2

5. Which of the following nations shares land border with Afghanistan?

  1. Tajikistan
  2. Turkmenistan
  3. Uzbekistan
  4. Iran
  5. Pakistan

Select the correct answer using the code below:

 (a) 1, 2, 3 and 5 only

 (b) 2, 3, 4 and 5 only

 (c) 1, 2, 4 and 5 only

 (d) 1, 2, 3, 4 and 5

6. Consider the following statements about the National Critical Information Infrastructure Protection Centre (NCIIPC):

  1. It is an organisation of the Government of India created under the Information Technology Act.
  2. It is designated as the National Nodal Agency in respect of Critical Information Infrastructure Protection.
  3. It is a unit of the National Technical Research Organisation (NTRO).

Which of the given above statements is/are correct?

 (a) 1 and 2 only

 (b) 2 and 3 only

 (c) 1 and 3 only

 (d) 1, 2 and 3

7. Which one of the following is the best description of ‘INS Karanj’, that was in the news recently?

 (a) Amphibious warfare ship

 (b) Nuclear-powered submarine

 (c) Torpedo launch and recovery vessel

 (d) Diesel-electric attack submarine

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

  1. The Minimum Needs Programme (MNP) was introduced in the first year of the Fifth Five-Year Plan.
  2. In the Eighth Five-Year Plan, the gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and foreign debt.
  3. Ninth Five Year Plan was launched with the objective of faster, sustainable and more inclusive growth.

Which of the statements given above is/are correct?

 (a) 1 only

 (b) 2 and 3 only

 (c) 1 and 2 only

 (d) 1, 2 and 3

9. Consider the following statements regarding Transfer payments:

  1. Transfer Payments are payments which are made without any counterpart of services received by the payer.
  2. For the purpose of calculating gross domestic product (GDP), government spending does not include transfer payments.

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

10. Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?

  1. It is a committee constituted by the Reserve Bank of India and led by the Governor of RBI.
  2. It consists of five members and they hold office for a period of four years.
  3. It determines the policy interest rate required to achieve the inflation target.

Which of the given above statements is/are correct?

 (a) 1 only

 (b) 2 and 3 only

 (c) 1 and 3 only

 (d) 1, 2 and 3

Q11. With reference to Managed Floating Exchange Rate System, consider the following statements:

1. It is a system in which central bank allows the exchange rate to be determined by the market but intervenes at times.

2. Managed Floating Exchange Rate System is followed in India.

Which of the statements given above are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Q12. With reference to the agriculture and the allied sectors in India, consider the following statements:

1. Cattle account for more than fifty per cent of the total livestock population.

2. Fish production from marine sector accounts for more than half of the total value of fish production in India.

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

Q13. Which of the following correctly describes an Escrow Account?

(a) A bank account through which NRIs can operate their finances in India.

(b) An overseas bank account used by MNCs for routing the funds through tax havens for the purpose of tax evasion.

(c) A third party bank account for safeguarding the seller against its buyer from the payment risk.

(d) A bank account which earns regular interest in return for a fixed monthly deposits.

Q14. In the context of Indian economy, the Hindu rate of growth is referred to as

(a) The rapid rate of growth of the Indian economy post 1991 economic reforms.

(b) The sluggish rate of growth of the Indian economy before the 1991 economic reforms.

(c) The hypothetical rate of growth assuming manufacturing sector as the largest contributor to the GDP.

(d) The maximum possible rate of growth of the Indian economy in keeping with its natural resource base.

Q15. The trade policy adopted by India in its first seven Five Year Plans was marked by

1. Restriction on the import of foreign goods

2. Promotion the domestic production of goods

3. An outward-looking trade strategy

Select the correct answer using the code given below.

(a) 1 only

(b) 2 only

(c) 2 and 3 only

(d) 1 and 2 only

Q16. Consider the following statements with reference to the performance of Indian agriculture between 1991-2000, after the economic reforms:

1. It registered a higher growth rate compared to the preceding decade.

2. It experienced a steady increase in its contribution to the GDP over the years

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Q17. Consider the following statements regarding Balance of Payments (Bop):

1. It is a record of transactions between residents of a country with the rest of the world.

2. It is not independent on the currency of the transaction

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

Q18. “The decrease in money supply in the economy could not control the food inflation as increase in price was caused by skewed MSP policy, distortion caused by APMC acts and inadequate cold storage facilities.”

Which type of inflation best describes the situation given above?

(a) Stagflation

(b) Demand Pull inflation

(c) Structural inflation

(d) None

Q19. Consider the following statements regarding the Financial Market Infrastructure (FMI):

1. It is used for purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions.

2. Real-Time Gross Settlement System (RTGS) is designated as an FMI in India.

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

Q20. In the context of macroeconomics, ‘Sterilisation’ refers to

(a) Demonetization of currency to reduce corruption in shadow economy

(b) Operations by the RBI to neutralize the effects of high fiscal deficit on the economy

(c) Operations by RBI to neutralize effects of excess inflow of foreign investments in the economy

(d) Operations by RBI to neutralize the effects of high nonperforming assets on the economy

Q21. The government of a nation performs its income distribution function through which of the following mechanisms?

1. Levying taxes

2. Transfer Payment

3. Controlling money supply

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q22. With reference to the Biomes, consider the following statements:

1. Taiga is the northern most region of world adjoining the ice bound poles.

2. Tundra is dominated by coniferous evergreen vegetation.

3. Temperate deciduous forests are home to broad-leaf trees such as oak, maple and chestnut.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3

Q23. With reference to GDP deflator, consider the following statements:

1. It is the ratio of GDP measured at current prices to GDP measured at constant prices.

2. It automatically reflects the changes in consumption pattern and structural transformations in the economy.

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

Q24. Which of the following is an appropriate description of disinflation?

(a) It is a slowdown in the rate of increase of the general price level of goods and services

(b) It is a sudden fall in the value of a currency against other currencies.

(c) It is a persistent fall in the general price level of goods and services.

(d) It is a steep increase in the price level of export items.

Q25. In the Product method or Gross Value Added (GVA) method, the Gross Domestic Product (GDP) is calculated by adding the gross value added (GVA) of all firms in the economy. Which of the following are used to find the GVA of a firm?

1. Sales of the firm

2. Change in inventories

3. Value of intermediate goods used

Select the correct answer using the code given below.

(a) 1 and 3 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q26. Consider the following statements regarding Dumping:

1. It refers to a practice when the export price of a product is less than the cost of production in the home country.

2. Union Ministry of Finance is the nodal agency responsible for investigating the cases of dumping in India.

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

Q27. With reference to Viability Gap Funding (VGF), consider the following statements:

1. It is a grant provided to support projects which are economically justified but lack financial viability.

2. A private sector company shall be eligible for VGF only if it is selected on the basis of open competitive bidding.

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

Q28. Which of the following constitute a part of the Revenue Receipts of the Government of India?

1. Interest receipts on loans by the government

2. Dividends earned by the government on investments

3. Receipts through PSU disinvestments

4. Cash grants-in-aid from foreign countries

Select the correct answer using the code given below.

(a) 1, 2 and 3 only

(b) 3 and 4 only

(c) 1, 2 and 4 only

(d) 1, 2, 3 and 4

Q29. Which of the following may lead to an increase in Personal Income in an economy?

1. Increase in national income

2. Increase in undistributed profits

3. Increase in corporate taxes

Select the correct answer using the code given below.

(a) 1 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q30. Which of the following fall within the purview of Capital account under the Balance of Payments?

1. Dividends on foreign assets which are abroad

2. Gifts from abroad

3. Foreign institutional investment

Select the correct answer using the code given below.

(a) 1 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

Q31. Which of the following statements is/are correct regarding Peer to peer (P2P) lending?

1. P2P lending is a form of crowd funding used to raise loans without pledging security.

2. The interest rate is fixed by way of a mutual agreement between the borrower and lender.

Select the correct answer using the code given below.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Q32. What do you understand by the term transfer payment?

(a) Payment given to the importers by a domestic firm for the goods supplied.

(b) It is a part of profit which is not distributed among the factors of production.

(c) It is a one-way payment to a person who has given or exchanged no money, good, or service for it.

(d) Payment made by the parent company to subsidiary companies for use of goods or services.

Q33. In the context of the money supply in an economy, High Powered Money includes

(a) Interbank deposits, which a commercial bank holds in other commercial banks.

(b) Deposits held by the Government of India and commercial banks with RBI only.

(c) Only the currency circulation and the public and vault cash of commercial banks.

(d) Both (b) and (c).

Q34. In India, Know Your Customer (KYC) verifications are mandatory for which of the following sectors?

1. Banking

2. Equity Trading

3. Pension

4. Insurance services

Select the correct answer using the code given below.

(a) 1, 2 and 3 only

(b) 3 and 4 only

(c) 1 and 2 only

(d) 1, 2, 3 and 4

Q35. With reference to Wholesale Price Index (WPI), consider the following statements:

1. It covers both services as well as goods.

2. It includes indirect taxes to account for the impact of fiscal policy.

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

Q36. Which of the following sectors/categories fall under Priority Sector Lending (PSL)?

1. Loan to minorities

2. Education Loans

3. Loans for renewable energy

4. Overdraft under Pradhan Mantri Jan Dhan Yojana

Select the correct answer using the code given below.

(a) 1, 2 and 3 only

(b) 3 and 4 only

(c) 2 and 4 only

(d) 1, 2, 3 and 4

Q37. Which of the following services can be provided by a Small Finance Bank?

1. Pension products

2. Mutual fund services

3. Bank Deposits

4. Foreign Exchange

Select the correct answer using the code given below.

(a) 1, 2 and 3 only

(b) 3 and 4 only

(c) 1, 2 and 4 only

(d) 1, 2, 3 and 4

Q38. Which of the following was/were the outcomes of the Bretton Woods Conference held in 1944?

1. Setting up of International Monetary Fund (IMF) and the World Bank

2. Setting up of World Trade Organisation

3. Establishment of international gold exchange standard

Select the correct answer using the code given below.

(a) 1 only

(b) 1 and 2 only

(c) 1 and 3 only

(d) 2 and 3 only

Q39. The marginal productivity of labour force becomes zero in which of the following types of unemployment?

(a) Disguised unemployment

(b) Seasonal unemployment

(c) Frictional unemployment

(d) Structural unemployment

Q40. Which of the following curve shows that inflation and unemployment have a stable and inverse relationship?

(a) Phillips Curve

(b) Kuznets Curve

(c) Laffer Curve

(d) Lorenz Curve

Q41. Mumbai Inter-Bank Bid Rate (MIBID) is the benchmark rate at which banks:

(a) Are willing to lend each other.

(b) Would like to borrow from other banks.

(c) Attract deposits from other banks.

(d) Charge an additional rate of interest on public deposits.

Q42. Consider the following statements:

1. The sum of exports and imports as a proportion of GDP is an indicator of the degree of openness of an economy.

2. In an open economy, an increase in export can lead to an increase in the aggregate demand in domestic economy.

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

Q43. With reference to Cash Reserve Ratio (CRR), consider the following statements:

1. CRR is the percentage of deposits which a bank must keep with itself in the form of any liquid asset.

2. Higher the CRR requirement, lower will be the credit creation in the economy.

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

Q44. In an open economy, for the barter system to operate successfully, which of the following principles must be completely satisfied?

(a) Law of Diminishing returns

(b) Double coincidence of wants

(c) The law of supply

(d) The law of demand

Q45. Which of the following changes are implemented after the merger of Railway Budget with the Union Budget?

1. Ministry of Railways receives Gross Budgetary support from Government of India.

2. The appropriations for Railways form a part of the main Appropriation Bill.

3. Railways are liable for dividend payments to the Government on their profits.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q46. Which of the following fiscal policy statements are required to be laid before the Parliament under the Fiscal Responsibility and Budget Management Act, 2003 (FRBMA)?

1. Medium-term Fiscal Policy

2. Fiscal Policy Strategy

3. Outcome Budget

4. Medium-term Expenditure Framework

Select the correct answer using the code given below.

(a) 1 and 3 only

(b) 1, 2 and 4 only

(c) 2 and 4 only

(d) 1, 2, 3 and 4

Q47. Consider the following statements regarding Deemed Exports Benefit Scheme:

1. Deemed Exports refers to those transactions in which goods supplied do not leave the country but the payment for such supplies is received only in foreign exchange.

2. The scheme violates the principle of import substitution.

3. The scheme is applicable to the units in Petroleum refinery and Nuclear Power Projects.

Which of the statements given above is/are correct?

(a) 1 and 3 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3

Q48. Which of the following statements best describes the term Triffin dilemma?

(a) It refers to the dilemma of setting the right monetary policy rates so as to balance the twin objectives of price stability and growth.

(b) It refers to the dilemma of finding the rates of taxation so as to maximize revenue collection.

(c) It refers to the impossibility of having a fixed foreign exchange rate, free capital movement and an independent monetary policy at the same time.

(d) It refers to the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies.

Q49. With reference to methods of GDP estimation, consider the following statements regarding ‘basic prices’:

1. It includes the payment to factors of production but does not include any tax.

2. The Gross Value added at basic prices will always be less than Gross Value added at market prices.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Q50. Consider the following statements regarding the differences between Proportional and

Progressive taxation:

1. In progressive taxation, tax rate increases with an increase in the income whereas, in proportional taxation same percentage of tax is levied on all taxpayers.

2. As compared to progressive taxation, proportional taxation makes disposable income less sensitive to fluctuations in GDP.

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

Q51. With reference to the First Five-Year Plan in India, consider the following statement

1. It focused on rapid industrialization using heavy and basic industries.

2. The actual growth rate exceeded the target growth rate set by the five-year plan.

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

Q52. What are the reasons for not using GDP as the indicator of well being of the people of a country?

1. It does not account for distribution of income.

2. It takes into account only those economic activities that are evaluated in monetary terms.

3. It neglects negative externalities on health and environment.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q53. Which of the following correctly describes the term ‘Speculative demand for money’?

(a) It is the purchasing power of a currency with respect to another for a fixed basket of goods.

(b) It refers to speculation in money supply in an economy in the form of demand deposits held in banks.

(c) It is the demand for money as a store of wealth.

(d) It is the demand for currency to purchase assets and real estate for creation of wealth.

Q54. An increase in the public debt through domestic borrowings may lead to which of the following in an economy?

1. Inflation

2. Private borrowers crowded out of the financial markets

3. Increase in aggregate demand

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 1 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q55. With reference to Special Economic Zones, consider the following statements:

1. It refers to a specially demarcated territory with tax holidays and exemptions from duties for export and import.

2. A major objective of setting up a SEZ is to attract Foreign Direct Investment and earn foreign exchange.

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

Q56. “Usual Status Approach”, “Current Weekly Status Approach”, “Current Daily Status Approach” are used in the measurement of

(a) Inflation

(b) Unemployment

(c) GDP growth rate

(d) Wage increase in labour market

Q57. Which of the following statements is/are correct regarding the Velocity of Money?

1. The number of times a unit of money changes hands during the unit period is called the velocity of circulation of money.

2. Higher the velocity of circulation, higher will be the total nominal value of transactions in the economy.

Select the correct answer using the code given below.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Q58. Consider the following statements regarding the Statutory Liquidity Ratio (SLR):

1. SLR is mandatory for all Scheduled Commercial Banks.

2. SLR securities can be pledged for raising funds through Open Market Operations.

3. Non-maintenance of SLR attracts a penal rate of interest upon the bank.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q59. Which of the following financial instruments can be classified as securities?

1. Bonds

2. Shares

3. Fixed Deposits

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

Q60. Mahalonobis model adopted in the Second Five-Year Plan is associated with

(a) Agricultural advancement

(b) Modernization of army

(c) Large scale industrial development

(d) Promotion of cottage industries

Q61. Which among the following sectors is/are covered under the Index of Industrial Production (IIP)?

1. Mining

2. Manufacturing

3. Electricity

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q62. With reference to Participatory notes or P-notes in the Indian context, consider the following statements:

1. It is a derivate instrument issued in India by a listed company against underlying Indian security.

2. The investors in P-Notes derive the economic benefits of investing in security without actually owning it.

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

Q63. Consider the following statements with respect to Mahatma Gandhi National Rural Employment Guarantee Act, 2005:

1. Only rural Below Poverty Line families are eligible for the benefits under the

Act.

2. It promises 200 days of guaranteed wage employment to every adult member in rural areas.

3. It provides for the voluntary unskilled manual wage works.

Which of the statements given above is/are correct?

(a) 3 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q64. Which of the following statements correctly define(s) ‘Fiscal deficit’?

(a) Excess of total expenditure over revenue receipts and non-debt creating capital receipts.

(b) Borrowings from RBI, abroad as well as net borrowing at home.

(c) Excess of government’s total expenditure over total receipts.

(d) Both (a) and (b)

Q65. What is Project Soli, often seen in the news?

(a) Understanding nuances of human movements so that natural body language could be used as a form of input.

(b) Delivering connectivity to people in unserved and underserved communities.

(c) A neural network based image recognition technology to bring up relevant information.

(d) Helping one experience ideas as if one is actually there.

Q66. Which of the following are the characteristics of a ‘Spot Exchange’?

1. It facilitates the sale and purchase of commodities including bullion.

2. Settlements are done on an electronic trading platform.

3. It allows for anonymity between buyers and sellers.

Select the correct answer using the code given below.

(a) 2 and 3 only

(b) 1 and 2 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q67. With reference to the Industrial Policy Resolution of 1956, consider the following statements:

1. It formed the basis of the Second Five Year plan.

2. It rejected the role of the private sector in the development of Indian economy.

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

Q68. Which of the following actions implemented by the government may lead to reduction in its deficit?

1. Increase in the rate of personal Income Tax.

2. Sale of shares of Public Sector Undertakings.

3. Introduction of new welfare schemes by the government.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q69. Which of the following was/were the financial sector reforms taken up by the Government of India post the economic reforms of 1991?

1. Allowing Foreign Institutional Investors to invest in Indian financial markets.

2. Necessary approval of RBI needed for all banks to set up new branches.

3. Banks were allowed to generate resources from India and abroad.

Select the correct answer using the code given below.

(a) 1 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q70. Which of the following statements best describes the term “inflationary gap”?

(a) It is the gap between price levels of base year and current year.

(b) It is a situation which arises when aggregate demand exceeds the aggregate supply at the full employment level.

(c) It is a situation when inflation rises at a faster rate highlighting gaps in monetary policy transmission.

(d) It is a situation which arises when aggregate demand falls short of aggregate supply at the full employment level.

Q71. Consider the following statements with respect to Consumer Price Index:

1. It computes price changes in both goods and services.

2. It is computed by the Office of Economic Advisor (OEA), Department of Industrial Policy and Promotion.

3. It is taken as measure of inflation while formulating monetary policy by RBI.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q72. Which of the following can be used for ‘Deficit Financing’ in India?

1. Minting of new coins

2. Issuance of Masala Bonds

3. Borrowing from multilateral institutions

4. Purchase of hard currencies

Select the correct answer using the code given below.

(a) 1, 2 and 3 only

(b) 2 and 4 only

(c) 1 and 3 only

(d) 1, 2, 3 and 4

Q73. Which of the following is/are correct regarding the Marginal Cost of Funds Based Lending Rate (MCLR)?

1. It refers to the minimum interest rate of

a bank below which it cannot lend.

2. It is determined internally by every bank.

Select the correct answer using the code given below.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Q74. With reference to Real Effective Exchange Rate (REER), consider the following statements:

1. It is the price of a representative basket of foreign currencies, each weighted by its importance to the domestic country in international trade.

2. It is interpreted as the quantity of domestic goods required to purchase one unit of a given basket of foreign goods.

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

Q75. Which of the followings is/are included in Sovereign external debt?

1. FII investment in Government Securities

2. Borrowings from IMF

3. Development grant by World Bank

Select the correct answer using the code given below.

(a) 1 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q76. It is calculated by adding residents’ investment income from overseas investments and subtracting foreign residents’ investment income earned within a country to the Gross Domestic Product (GDP).

Which of the following concepts is explained in the above paragraph?

(a) Gross National Product

(b) Net National Product

(c) Net Domestic Product

(d) Net National Income

Q77. Which of the following statements is correct about Rupee-denominated debt?

(a) Foreign portfolio investors are prohibited from investing in rupee denominated debt instruments.

(b) The borrower pays back the foreign currency equivalent of the rupee denomination at a pre-decided exchange rate.

(c) It can be issued only by the government.

(d) The currency risk is borne by the creditor.

Q78. With reference to Alternative Investment Funds, consider the following statements:

1. It refers to any privately pooled investment fund from domestic sources only.

2. Currently they do not come under the jurisdiction of any regulatory agency in India.

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

Q79.  Recently, there has been an upsurge in the NPAs of the public sector banks, which of the following is/are not the factor(s) responsible?

1. Lower economic growth in the country.

2. Aggressive lending by banks in the past, especially during the high growth period.

3. Lack of legal provisions for loan- recovery.

4. Banks switching over to a system based identification of NPAs.

5. Natural calamities.

Select the correct answer using the codes given below:

a) 1, 3 and 5 only

b) 2, 4 and 5 only

c) 1 and 2 only

d) 3 and5 only

Q80. Quarterly External Debt Statistics (QEDS) Database is an online database launched by the:

(a) Union Ministry of Finance, India to reports external debt statistics of Indian economy.

(b) World Bank and the International Monetary Fund (IMF) to reports external debt statistics of economies that subscribe to the IMF’s Special Data Dissemination Standard.

(c) World Trade Organization (WTO) and the International Monetary Fund (IMF) to reports external debt statistics of Group of 20 (G-20) countries.

(d) Asian Development Bank (ADB) and the International Monetary Fund (IMF) to reports external debt statistics of Asian countries.

Q81. The proportion of the total deposits commercial banks keep as reserves is referred to as

(a) Capital Adequacy Ratio

(b) Reserve Deposit Ratio

(c) Credit Reserve Ratio

(d) Currency Deposit Ratio

Q82. Which of the following are the possible advantages of the monetary system over the barter system?

1. Reduction in transactions costs.

2. Better accounting of transactions.

3. Requires that prices must be negotiated for every transaction.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q83. Consider the following statements with respect to the participation of people in employment in India:

1. The worker-population ratio represents number of persons employed per 1000 persons in the age group of 15-59 years.

2. Worker-population ratio in India is more than 60 at present.

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

Q84. With reference to electricity production in India, arrange the following in decreasing order of their contribution to power generation capacity.

1. Thermal power

2. Hydel power

3. Nuclear power

Select the correct answer using the code given below.

(a) 1-3-2

(b) 1-2-3

(c) 2-1-3

(d) 2-3-1

Q85. Which of the following is/are the consequences of the process of “actualization of the workforce”?

1. The number of self-employed persons increases.

2. It will increase the unionization of the labour force.

3. Reduced employment benefits such as sick leave.

Select the correct answer using the code given below.

(a) 3 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1 and 3 only

Q86. With reference to Depository Receipts, consider the following statements:

1. It is a financial instrument which represents certain securities issued by a company in a foreign jurisdiction.

2. It is free from risks for investors, due to exchange rate fluctuations.

3. It can be traded on a stock exchange.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q87. Which of the following is/are the advantages of organic farming over conventional farming?

1. It is less labor-intensive.

2. The produce of organic farming has higher nutritional value.

3. Organic farming yields have a greater shelf life.

Select the correct answer using the code given below.

(a) 2 only

(b) 1 and 2 only

(c) 1 and 3 only

(d) 2 and 3 only

Q88. Which of the following initiatives was/were taken to boost the agricultural sector after independence?

1. Fixing the limit of individual land ownership

2. Abolition of intermediaries.

3. Introduction of High Yielding Variety seeds of food crops.

Select the correct answer using the code given below.

(a) 1 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q89. With reference to Micro-insurance in India, consider the following statements:

1. Micro-insurance policies are created to promote insurance coverage among economically vulnerable sections of society.

2. These policies are regulated by NABARD.

3. These policies can be offered only a group basis and not to individuals.

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q90. With reference to Inflation-Indexed Bonds in India, which of the following statements is/are correct?

1. These are government-issued bonds which provide the investor with a constant return irrespective of the inflation in the economy.

2. They are linked to CPI (Combined) for indexing inflation.

Select the correct answer using the code given below.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Q91. Tropic of Capricorn passes through which of the following countries?

1. Argentina

2. Bolivia

3. Chile

4. Botswana

5. Mozambique

6. Zimbabwe

7. Australia

Select the correct answer code:

 a) 1, 3, 4, 5, 7

 b) 1, 3, 5, 6, 7

 c) 1, 2, 3, 5, 7

 d) 2, 3, 4, 6, 7

Q92. With reference to Payments Banks, consider the following statements:

1. Mobile companies and supermarket chains can become a payment bank to provide basic banking activities.

2. Payments Bank can accept fixed deposits as well as undertake lending business.

3. Payments banks are required to comply with the Statutory Liquidity Ratio (SLR) norms.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q93. Which of the following statements is correct regarding the Monetary Policy Committee (MPC)?

1. It is a statutory body.

2. It is a six-member body headed by RBI Governor.

3. It is responsible for determining the inflation target.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Q94. If we keep increasing the employment of an input, with other inputs fixed, eventually a point will be reached after which the resulting addition to output will start falling. Which of the following laws is best described by the above passage?

(a) Law of Diminishing Marginal Product

(b) Law of Increasing Costs

(c) Law of Equivalent Exchange

(d) Engel’s Law

Q95. With reference to the current energy consumption pattern in India, consider the following statements:

1. More than half of the total energy consumption in India depends on noncommercial energy sources.

2. The transport sector is the largest consumer of commercial energy in India.

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

Q96. Consider the following statements with respect to inflation:

1. It decreases the purchasing power capacity of a currency.

2. It benefits both the bondholders and debtors.

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

Q97. Consider the following statements:

1. In a free trade agreement, the member countries maintain a common external tariff for exports and imports from nonmembers.

2. A Customs Union is characterized by the free movement of factors of production among member countries.

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

Q98. With reference to Revenue Deficit, consider the following statements:

1. It includes such transactions that affect the current income and expenditure of the government.

2. It signifies that government is using up the savings to finance a part of its consumption expenditure.

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

Q99. With reference to the employment pattern in India, consider the following statements:

1. More than two-thirds of the workforce is engaged in the primary sector.

2. Self-employed constitute the majority of the total workforce.

3. The representation of female workers in the formal sector is lower than the informal sector.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

Q100. Yakshagana, Bhootaradhane and Bayalata are major folk theatre forms of

 a) Karnataka

 b) Kerala

 c) Bihar

 d) West Bengal

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