IAS Prelims Test Series 2021 Practice Test 22

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Practice Test 22

Q.1) When the Reserve Bank of India increases the Cash reserve ratio by 50 basis points, which of the following is likely to happen?

  1. India’s GDP growth rate increases drastically
  2. Foreign institutional investors may bring more capital into the economy
  3. It may help in bringing bring down high inflation prevalent in the economy
  4. It may drastically increase the liquidity in the banking system

Q.2) Which of the following are considered as Non-Banking Financial Company (NBFC) in India as per RBI?

  1. Asset Finance Company (AFC)
  2. Infrastructure Finance Company (IFC)
  3. Peer to Peer (P2P) lenders
  4. Account Aggregators

Select the correct answer using the codes given below:

  1. 1 and 2 only
  2. 1, 2 and 3 only
  3. 1, 3 and 4 only
  4. All the above

Q.3) Consider the following statements regarding ‘Digital Public Credit Registry’:

  1. It will capture loan information of individuals and corporate borrowers and work as a financial information infrastructure.
  2. It was set up based on the recommendations of Y.M. Deosthalee committee.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Q.4) In the context of Repurchase agreement between bank and RBI, consider the following statements:

  1. It is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks.
  2. In India it is the primary tool in the RBI’s Monetary and Credit Policy.
  3. In this RBI lends it for long term money to banks

Which of the above statements is/are correct?

  1. 1 and 3 only
  2. 3 only
  3. 2 and 3 only
  4. 1 and 2 only

Q.5) Which one of the following provides the Immediate Payment Service (IMPS) in India?

  1. Indian banks’ Association
  2. National Securities Depository Limited
  3. National Payments Corporation of India
  4. Reserve Bank of India

Q.6) The term Securitization is sometimes seen in the news. It refers to which of the following:

  1. Issuance of Government security to finance the fiscal deficit.
  2. The pooling of financial assets into a consolidated financial instrument.
  3. Unwillingness to hold government security due to expectation of default.
  4. Conversion of unsecured debt into secured debt to reduce Non-Performing Asset issue.

Q.7) Consider the following statements related to FDI guidelines in India related to E-Commerce –

  1. 100% FDI in Marketplace Model of e-commerce under automatic route is allowed.
  2. FDI is prohibited in Inventory based model of e-commerce.

Select the correct answer using the code given below:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Q.8) What do you understand by the term ‘transfer payment’?

  1. Payment given to the importers by a domestic firm for the goods supplied.
  2. It is a part of profit which is not distributed among the factors of production.
  3. It is a one-way payment to a person who has given or exchanged no money, good, or service for it.
  4. Payment made by the parent company to subsidiary companies for use of goods or services.

Q.9) Financial Inclusion has been the priority of the policy makers for quite some time. Which of the following are the benefits of financial inclusion:

  1. Inculcates the habit of saving.
  2. Provides formal credit avenues.
  3. Helps in plugging leakages in welfare schemes.
  4. Decreases credit capacity of banks.

Select the correct code from the following:

  1. 1 and 2
  2. 1, 2 and 3
  3. 2, 3 and 4
  4. All of the above


Q.10) Which of the following statements are correct about National Band for Agriculture and Rural Development?

  1. It was formed by an executive decision on the recommendation of a committee of RBI.
  2. The agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC) were transferred to NABARD.
  3. The aim of NABARD is to Promote sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives.

Which of the above statements is/are correct?

  1. 1 only
  2. 2 and 3
  3. 1 and 3
  4. All of the above

Q.11) Consider the following statements:

  1. Liquidity Adjustment Facility (LAF) is used by RBI to control money supply in the economy.
  2. CRR and SLR are part of LAF of RBI.

Which of the above statements is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Q.12) Which of the following is not an asset held by the commercial bank?

  1. Bills of exchange
  2. Current Account deposits
  3. Money lent
  4. Credit balances with the reserve bank

Q.13) Decline in interest rates:

  1. Will lead to large outflow of foreign portfolio investment
  2. Will lead to large inflow of foreign portfolio investment
  3. Will not affect foreign portfolio investment
  4. May affect or not affect portfolio investment

Q.14) Which of the following services is not offered by National Payments Corporation of India (NPCI)?

  1. Unified Payment Interface (UPI)
  2. Cheque Truncation System (CTS)
  3. Aadhar Payment Bridge System (APBS)
  4. National Electronic Fund Transfer (NEFT)

Q.15) Which of the following correctly explains ‘On – Us’ transaction?

  1. If payment is made through a credit card and actually money is not paid by the customer.
  2. A transaction carried out at an ATM of the card issuing bank.
  3. If transaction is made by a customer in cash.
  4. A transaction carried out with merchant through a UPI.

Q.16) Which of the following best describes the term letter of credit?

  1. It is a bank guarantee under which a bank allows its customer to raise money from another Indian bank’s foreign branch in the form of short-term credit
  2. It is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount
  3. It is a state guarantee under which it allows its citizens to raise money from foreign share markets in the form of short term credit
  4. It is a letter from a RBI guaranteeing that a debtor’s outstanding loan to creditor will be recovered on time

Q.17) Which of the following processes would help in fiscal consolidation?

  1. Improving tax-to-GDP ratio
  2. Ways and Means Advances
  3. Diminishing non-capital expenditures
  4. Performance budgeting

Choose the correct answer using the codes given below

  1. 1, 2 and 3 only
  2. 2, 3 and 4 only
  3. 1, 3 and 4 only
  4. All of the above

Q.18) Recently White Label ATMs (WLAs) is in news, in this context, consider the following:

  1. WLA are setup by Non-bank entities.
  2. WLA provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks

Which of the above statement is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Q.19) Consider the following statements with reference to NBFCs:

  1. They are registered under the Companies Act, 1956
  2. NBFC cannot accept demand deposits.
  3. NBFCs form part of the payment and settlement system

Which of the statements is/are incorrect?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 3 only
  4. 1 and 3 only

Q.20) With reference to Regional Rural Banks (RRBs), consider the following pairs:

  1. Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975).
  2. The equity of a regional rural bank is held by the Central Government, concerned State Government and the Sponsor Bank in the proportion of 50:15:35.
  3. The RRBs are required to provide 65% of their total credit as priority sector lending.

Which of the statements given above is/are correct?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3

Q.21) Consider the following pairs:

Indus valley siteState
1.     BarorPunjab
2.     Kotada BhadliRajasthan
3.     RakhigarhiHaryana

Which of the pairs given above are incorrectly matched?

  1. 1 only
  2. 1 and 2 only
  3. 2 and 3 only
  4. 1 and 3 only

Q.22) The Tigray region of Ethiopia borders with which of the following country?

  1. South Sudan
  2. Eritrea
  3. Somalia
  4. Djibouti

Q.23) Consider the following statements about KALA-AZAR:

  1. It is a neglected tropical disease.
  2. It is caused by a Leishmania bacterium.
  3. It is endemic to southern States of India.

Which of the statements given above is/are correct?

  1. 1 only
  2. 1 and 2 only
  3. 2 and 3 only
  4. 1, 2 and 3

Q.24) India’s first green energy Convergence Project will be implemented in which of the following State?

  1. Kerala
  2. Karnataka
  3. Goa
  4. Gujarat

Q.25) With reference to WHO Emergency Use Listing (EUL)consider the following statements:

  1. It is a risk based procedure to assess and list unlicensed vaccines during public health emergencies.
  2. It was introduced during the COVID-19 outbreak.
  3. The ChAdOx 1 nCoV19 (Covishield) vaccine is the first ever vaccine to be listed in WHO EUL.

Which of the statements given above is/are INCORRECT?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 3 only
  4. None of the above

Q.26) Consider the following statements:

  1. CPI represents consumer baskets better than the other measures
  2. CPI provides information on price movements in services sector also
  3. CPI excludes food inflation which is a critical part of price stability

Which of the above statements is/are the correct reasons for choosing Consumer price Index (CPI) as measure of Inflation?

  1. 1 and 2 only
  2. 1 and 3 only
  3. 2 and 3 only
  4. 1, 2 and 3

Q.27) With reference to Sahakar Pragya’consider the following statements:

  1. It aims to impart training to artisans, cottage industry workers in rural areas.
  2. It is fully funded by National Cooperative Development Corporation (NCDC).

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Q.28) The Reciprocal Access Agreement (RAA) was recently signed between which of the following two QUAD countries?

  1. Japan and USA
  2. India and Australia
  3. India and USA
  4. Japan and Australia

Q.29) With reference to Lonar lake consider the following statements:

  1. It is an endorheic basin on the Deccan Plateau.
  2. It is a wetland of international importance.
  3. It is a notified National Geo-heritage Monument.

Which of the statements given above is/are correct?

  1. 1 and 2 only
  2. 1 and 3 only
  3. 2 and 3 only
  4. 1, 2 and 3

Q.30) Recently seen in news, the Athena SWAN Charter aims at

  1. Enhancing gender equity in science and technology
  2. Reduce socio-economic vulnerabilities to disasters
  3. Climate change mitigation and adaptation
  4. Sustainable restoration of swamp ecosystems on Earth

Direction for the following 2 (two) items:

Study the following passages and answer the questions that follow. Your answers to these questions should be based on the passage only.

Passage 1

Both Socrates and Bacon were very good at asking useful questions. Socrates is largely credited with coming up with a way of asking questions, ‘the Socratic method,’ which itself is at the core of the ‘scientific method,’ popularised by Bacon. The Socratic Method disproves arguments by finding exceptions to them, and can, therefore, lead your opponent to a point where they admit something that contradicts their original position. In common with Socrates, Bacon stressed it was as important to disprove a theory as it was to prove one — and real-world observation and experimentation were key to achieving both aims. Bacon also saw science as a collaborative affair, with scientists working together, challenging each other.

Q.31) Which of the following is the most logical corollary that can be drawn from the passage?

  1. Both Socrates and Bacon advocated clever questioning of the opponents to disprove their arguments and theories.
  2. Both Socrates and Bacon advocated challenging arguments and theories through observation and experimentation.
  3. Both Socrates and Bacon advocated confirming arguments and theories by finding exceptions.
  4. Both Socrates and Bacon advocated examining arguments and theories from both sides to prove them.

Passage 2

A serious critic has to comprehend the particular content, unique structure, and special meaning of a work of art. And here she faces a dilemma. The critic must recognize the artistic element of uniqueness that requires subjective reaction; yet she must not be unduly prejudiced by such reactions. Her likes and dislikes are less important than what the work itself communicates, and her preferences may blind her to certain qualities of the work and thereby prevent an adequate understanding of it. Hence, it is necessary that a critic develop a sensibility informed by familiarity with the history of art and aesthetic theory. On the other hand, it is insufficient to treat the artwork solely historically, in relation to a fixed set of ideas or values. The critic’s knowledge and training are, rather, preparation of the cognitive and emotional abilities needed for an adequate personal response to an artwork’s own particular qualities.

Q.32) The passage suggests that the author would be most likely to agree with which of the following statements?

  1. Art speaks to the passions as well as to the intellect
  2. Most works of art express unconscious wishes or desires
  3. The best art is accessible to the greatest number of people
  4. The meaning of art is a function of the social conditions in which it was produced

Q.33) Find the number of bricks, each measuring 25 cm × 12.5 cm × 7.5 cm, required to construct a wall 12 m long, 5 m high and 0.25 m thick, while the sand and cement mixture occupy 5 % of the total volume of wall?

  1. 6080
  2. 3040
  3. 1520
  4. 12160

Q.34) Rahul answered 40% of the first 75 questions correctly in an examination consisting of 150 questions.  Find the percentage of the remaining 75 questions that he needs to answer correctly in order to answer 60% of the total number of questions correctly?

  1. 60%
  2. 80%
  3. 100%
  4. 120%

Q.35) The odds that ‘A’ agrees with the truth are 3:2 and the odds that ‘B’ agrees with the truth are 5:3. In what percent of cases are they likely to agree with each other on an identical point?

  1. 47.5%
  2. 37.5%
  3. 63.5%
  4. 52.5%

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