PRAYAS Economy Practice Workbook Question Booklet

PREFACE
Curiosity is fundamental to human existence and while preparing for one of the toughest exams,
one is naturally curious as to how to learn and practice for gateway (PRELIMS) to civil services
dream.
Thus, to satisfy this eagerness of an aspirant and help one prepare for UPSC prelims thoroughly
we have the best possible solution for you i.e. PRAYAS- PRACTICE WORK BOOK. It is
based on "reverse engineering technique" of analysing the syllabus of Economy in elementary
form.
Covering any subject completely is always a tedious task but PRAYAS has been framed with
an innovative approach of completing the syllabus comprehensively through 480+ MCQs
along with solution. It will help candidates to revise the concepts, facts and figures related to
Economy, eventually catalysing their efforts to clear arduous phase of prelims.
We sincerely hope, PRAYAS will serve as a valuable guide and companion for the aspirants
who are preparing for the Economy section of the UPSC prelims exam.
1
INDEX
1. Basic of Indian Economy and National Income, Economic Growth and Economic Development......... 2
2. Planning .......................................................................................................................................... 10
3. Inflation .......................................................................................................................................... 16
4. Agriculture ...................................................................................................................................... 22
5. Infrastructure and Manufacturing ................................................................................................... 35
6. Industry .......................................................................................................................................... 39
7. Services Sector ................................................................................................................................ 44
8. Banking in India ............................................................................................................................... 52
9. Indian Financial Market and Insurance in India ................................................................................ 64
10. Security Market in India .................................................................................................................. 69
11. External Sector in India.................................................................................................................... 75
12. Taxation and Public Finance in India ................................................................................................ 84
13. Important International Economic Organisation And Important Indian Economic Bodies, Acts. ....... 92
14. Reports, Index etc. .......................................................................................................................... 96
15. Economy - Key Terms In News ....................................................................................................... 100
16. Poverty and Unemployment.......................................................................................................... 105
2
Basic of Indian Economy and National Income, Economic Growth and Economic
Development
1. With reference to the Distribution Network Which of the statements given above is/are
Models in the economy consider the correct?
following statements: (a) 1 only
1. Historically, there are mainly two (b) 2 only
distribution networks i.e State and Market. (c) Both 1 and 2
2. Covid 19 vaccine distribution policy in India (d) Neither 1 nor 2
reflects the state distribution model.
Which of the statements given above is/are 4. With reference to the Gross Domestic Product
correct? (GDP), select the correct statement from
(a) 1 only option given below:
(b) 2 only (a) For effective measurement, it is also
(c) Both 1 and 2 calculated only by adding national private
(d) Neither 1 nor 2 consumption, trade balance (exports-
minus imports) and government spending.
2. The term ‘Washington Consensus’ was coined (b) The use of the exports-minus-imports
by the US economist John Williamson in 1989 factor, is to add the expenditures on
under which he had suggested a set of policy imports not produced in the nation only.
reforms which include? (c) Gross, means the same thing in Economics
1. Interest rate liberalisation. and Commerce as ‘total’ means in
2. A managed floating exchange rate. Mathematics.
3. Privatisation. (d) GDP is a qualitative concept and its growth
4. Regulation of International trade. indicates development.
Which of the statements given above is/are
correct? 5. With reference to the Net Domestic Product
(a) 1 and 2 only (NDP) consider the following statements:
(b) 3 and 4 only 1. It is a GDP, calculated after addition of
(c) 1 and 3 only values of depreciation.
(d) 1, 2 and 4 only 2. The value of the Net domestic product of
an economy is always higher than the
3. An economy is called agrarian if its share of the value of GDP for the same year.
primary sector is 50 per cent or more in the 3. Calculations of Net domestic product are
total output (the GDP) of the economy. With used only for the domestic purposes.
context Indian agricultural economy consider Select the incorrect answer using the code
the following statements: given below:
1. Currently the primary sector in India (a) 1 and 2 only
contributes 55 percent to total Gross Value (b) 2 and 3 only
added. (c) 1 and 3 only
2. Despite India being an agricultural (d) 1, 2 and 3
economy, the total agri-export basket
accounts for little over 2.5% of world-wide
agri-trade.
3
6. It is the total value of all finished goods and 9. India calculates its national income at constant
services produced by a country's citizens in a prices, while the developed nations calculate it
given financial year, irrespective of their at the current prices because of:
location, it is? (a) Changes in calculation parameter by the
(a) Net National Product Niti aayog, after succeeding the erstwhile
(b) Net Domestic Product planning commission.
(c) Gross Domestic Product (b) Calculation of National income at current
(d) Gross National Product prices does not contain the inflation
values.
7. Which one of the following statements (c) Inflation, which is a major part of income
appropriately describes the “Net National calculation, is adjusted in constant price
Product”?
calculation.
(a) It is the GDP calculated after adjusting the
(d) All of the above
weight of the value of ‘depreciation’. This
is, basically, the net form of the GDP.
10. In the Early period economists used progress,
(b) It is a product calculated after the
growth and development—interchangeably
deduction of depreciation from the gross
but during the 1970s clear meanings of these
national product.
terms really evolved. With context of Growth
(c) It is the value of all final goods and services
and Development consider the following
produced within the boundary of a nation
statements:
during one year period.
1. Economic growth is a qualitative term, it's
(d) it is the total value of all finished goods and
hard to measure in real terms like net
services produced by a country's citizens in
growth of the road network.
a given financial year.
2. Higher economic growth does not
automatically convert into higher
8. Consider the following statements:
economic development.
(a) Factor cost in the production is incurred on
Select the correct answer using the code given
the various factors of indirect taxes rates in
below:
the economy.
(a) 1 only
(b) Market cost in production is an incurred
(b) 2 only
cost on rent, power and interest of loan.
(c) Both 1 and 2
(d) Neither 1 nor 2
incorrect?
(a) 1 only
11. Consider the following statement about the
(b) 2 only
Indian economy at Colonial Period:
(c) Both 1 and 2
1. During the Colonial period the policy of
(d) Neither 1 nor 2
increasing India's capacity to purchase
primary goods and export of advanced
goods was practiced.
2. Industrialization of India was neglected by
the colonizers.
3. The decade before independence was
marked by good growth due to world war,
due to significant change in productivity of
the overall Indian economy.
4
Which of the above statements is/are 14. Consider the following statements in
incorrect? reference to Capital Output ratio in an
(a) 1 only Economy:
(b) 1 and 2 only 1. Capital output ratio gives a relationship
(c) 1 and 3 only between level of investments and
(d) All of the above corresponding economic growth.
2. Lower capital output ratio shows that
12. India’s decision for a planned economy was
Productivity of capital and technological
also moulded by some contemporary
progress is low in an economy.
experiences in the world. Which of the
3. Investments in Superior technology which
following is/are correct about it?
increases output efficiency will lead to a
(a) Due to the Great Depression of 1929 and
favourable capital output ratio.
the reconstruction challenges after the
second world War.
correct?
(b) Command economies in the world started
performing badly in terms of economic (a) 1 only
growth, In the 1950s. (b) 1 and 3 only
(c) Both 1 and 2 (c) 2 and 3 only
(d) Neither 1 nor 2 (d) 1, 2 and 3
13. With reference to behavioural economics 15. Consider the following statements with
consider following statements: reference to the Capital Goods:
1. Economic development depends on fiscal 1. Capital Good provides service without
policy, monetary policy and taxation rather losing its essential functional
than intangible things such as human characteristics except wear and
psychology. depreciation.
2. Loan default Increases if the frequency of 2. The Capital Good itself is a finished good
meeting between creditor and debtor because it itself does not need any further
increases. processing.
3. Groups and societies that are known to be 3. Capital goods do not form part of the
honest and trustworthy perform badly in Producer goods.
development, due to a competitive Which of the statements given above is/are
Capitalist economy. correct?
Select the incorrect answer using the code
(a) 1 only
given below:
(b) 1 and 2 only
(a) 1 only
(b) 2 and 3 only (c) 1 and 3 only
(c) 3 only (d) 1,2 and 3
(d) 1, 2 and 3
5
16. Consider the following statements with 18. Consider the following with reference to
respect to Sunrise Sector in Indian Economy: Public Goods:
1. The sunrise sector industry is characterised 1. These goods are Non-excludable and non-
by high growth rates and high degree of rivalrous.
innovation. 2. Their use by one person neither prevents
2. Food processing, Information technology access to other people nor does it reduce
and Telcom can be termed as Sunrise availability to others.
sectors of Indian Economy. 3. Street lights, Flood control systems are
Which of the statements given above is/are part of Public goods.
correct? Which of the statements given above is/are
(a) 1 only correct?
(b) 2 only (a) 1 only
(b) 1 and 3 only
(c) Both 1 and 2
(c) 2 and 3 only
(d) Neither 1 nor 2
(d) 1,2 and 3
17. Considers the statements with reference to
19. The prices of producer goods (Intermediate
Sectors of the Indian Economy:
Goods) are not included in the summation of
1. Secondary sector includes all industries
a country’s gross domestic product (GDP):
that are concerned with the
(a) Because their inclusion would have no
manufacturing of usable products or
effect on GDP calculation.
finished goods.
(b) Because their inclusion would lead to an
2. Quinary sectors are services that focus on
under-valued estimate of GDP.
the creation, re-arrangement and
(c) Because their inclusion would lead to an
interpretation of new and existing ideas.
over-exaggerated (Double Counted)
3. The profession under the Quinary sector
estimate of GDP.
includes government officials, research
(d) Because their inclusion would have a very
scientists, financial and legal consultants.
negligible effect on GDP estimation.
4. Primary sector describes all industries that
are engaged in the extraction of natural 20. Consider the statements with reference to
resources or the production of raw Gross Capital Formation into Indian
materials.
Economy:
Which of the statements given above is/are 1. Gross fixed capital formation (GFCF) refers
correct? to the net increase in physical assets
(a) 1 and 2 only (investment minus disposals) in an
(b) 2 and 3 only economy.
(c) 1, 2 and 3 only 2. It includes all kinds of financial assets,
(d) 1, 2, 3 and 4 stocks of inventories and other operating
costs.
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) None of the above
6
21. With reference to Gross Domestic Product 4. Price at base year is current price and it
(GDP) and Gross National Product (GNP), reflects the impact of present-day inflation
which of the following statements correctly in it.
explains the difference between them? Select the correct answer using the code given
1. Gross Domestic Product (GDP) is the value below:
of all final goods and services produced (a) 1 and 2 only
within the geographic boundary of a (b) 1 and 3 only
nation during one year, period whereas (c) 2 and 4 only
Gross National Product (GNP) is the GDP of (d) 1, 3 and 4 only
a country minus its ‘income from abroad’.
2. GDP is a ‘quantitative’ concept, whereas 23. In context of comparing GDP and GVA,
GNP is both ‘quantitative’ as well as the consider the following statements
‘qualitative’ concept. 1. Gross value added (GVA) indicates the
3. GDP indicates the ‘internal’ as well as the value added by various sectors at supply
‘external’ strength of the economy side, whereas GDP is arrived at by adding
whereas the GNP of a country indicates the up all expenditures done in the economy
‘internal’ strength of the economy. which indicates demand side.
4. Private remittances constitute the part of 2. While GDP is a good measure in
GDP whereas interest on external loans comparative studies (comparing
constitute the part of GNP economies), GVA is a better measure to
Select the correct answer using the code given compare different sectors within the
below: economy
(a) 1 and 2 only Which of the above statement/s is/are
(b) 2 only correct?
(c) 1, 3 and 4 only (a) 1 only
(d) 3 and 4 only (b) 2 only
(c) Both 1 and 2
22. With reference to the calculation of national (d) Neither 1 nor 2
income, which of the following statements
are correct about cost and price in context of 24. Which of the following statements showing
national income counting? the relation between economic growth and
1. Factor cost is also known as the production economic development are incorrect?
cost as it is the ‘input cost’ the producer 1. Economic growth is a quantitative term,
has to incur in the process, whereas whereas economic development is a
‘market cost’ is derived after adding the qualitative term.
indirect taxes to the factor cost of the 2. Higher economic growth automatically
product brings in higher economic development.
2. Since January 2015, the CSO has switched 3. GDP indicates the economic growth of an
over to calculate its national income at economy whereas per capita income
factor cost so that GST can be separately indicates economic development
identified. Select the correct code among the following:
3. As per the recommendations of National (a) 1 and 2 only
Statistical Commission (NSC) base year was (b) 1 and 3 only
revised from 2004–05 to 2011–12. (c) 2 and 3 only
7
25. Which of the following perfectly explains 27. Consider the following with reference to
meaning of GDP of an economy: Nominal effective exchange rate (NEER):
(a) Gross Domestic Product (GDP) is the value 1. The nominal effective exchange rate
of all final goods and services produced (NEER) is an unadjusted weighted average
within the boundary of a nation during a rate at which one country’s currency
one-year period adding expenditures on exchanges for a basket of multiple foreign
imports not produced in the nation. currencies.
(b) Gross Domestic Product (GDP) is the value 2. The real effective exchange rate (REER) is
of all final goods and services produced the weighted average of a country's
within the boundary of a nation during a currency in relation to an index or basket
one-year period removing expenditures of of other major currencies and it is adjusted
goods and services produced which are for inflation.
exported, but not sold within the country. Which of the statements given above is/are
(c) Gross Domestic Product (GDP) is the value correct?
of all final goods and services produced (a) 1 only
within the boundary of a nation during a (b) 2 only
one-year period in which government (c) Both 1 and 2
spending and trade balance are also added (d) Neither 1 nor 2
as one of the components.
(d) Gross Domestic Product (GDP) is the value 28. Consider the following statements regarding
of all final goods and services produced Gross Domestic Product:
within the boundary of a nation during one 1. Gross Domestic Product (GDP) is that
year period minus national private income or product which accrues to the
consumption. economic agents who are residents of the
country.
26. Consider the following statements with 2. The income earned by the Non-Resident
respect to Purchasing Power Parities (PPP) Indians (NRIs) will be a part of India's Gross
exchange rates: National Product (GNP)
1. It is the rate at which the currency of one Which of the statements given above is /are
country would have to be converted into correct?
that of another country to buy the same (a) 1 only
amount of goods and services in each (b) 2 only
country. (c) Both 1 and 2
2. PPP exchange rates are more volatile than (d) Neither 1 nor 2
market exchange rates.
3. PPP exchange rates do not consider the
different quality of goods among
countries.
correct?
(a) 1 only
(b) 1 and 3 only
(c) 1 and 2 only
(d) 1,2 and 3
8
29. Consider the following statements regarding preferred as it indicates a country's

“Net Factor Income from Abroad” with production is more efficient.
reference to Indian economy: Which of the statements given above is/are
1. It is the difference between factor income incorrect?
received by the residents of India working (a) 1 only
abroad and the factor income paid to the (b) 2 only
foreign residents for working in India. (c) Both 1 and 2
2. The net factor income from abroad is (d) Neither 1 nor 2
always positive and can never be negative
3. Net compensation of employees and Net 32. Consider the following statements regarding
income from property and Natural Farming:
entrepreneurship are the only two 1. It is considered an agroecology-based
components of Net Factor Income diversified farming system which
Which of the statements given above is/ are integrates crops, trees and livestock with
correct? functional biodiversity.
(a) 1 only 2. It will reduce the government's heavy
(b) 1 and 2 only subsidy burden and also help prevent
(c) 2 and 3 only water pollution.
(d) 1, 2 and 3 Which of the statements given above is/are
correct?
30. Match List-I with List-II and select the correct (a) 1 only
answer using the codes given below: (b) 2 only
List-I (Revolution) List-II (Aim) (c) Both 1 and 2
A. Black 1. Related with oil seed (d) Neither 1 nor 2
Revolution production
B. Silver 2. Related with egg 33. What is/are the possible impacts of the rise in
Revolution production
direct tax collection?
C. Pink Revolution 3. Related with Meat
1. It will reduce the crowding-out effect.
and poultry production
D. Yellow 4. Related with 2. It will increase interest rates and higher
Revolution petroleum production GDP growth rate.
Select the correct Code: 3. It will not reduce income inequalities and
(a) A-1; B-2; C-3; D-4 social inequalities.
(b) A-4; B-2; C-3; D-1 Select the correct answer using the codes given
(c) A-3; B-1; C-2; D-4 below:
(d) A-2; B-3; C-1; D-4 (a) 1 only
(b) 2 and 3 only
31. Consider the following statements regarding (c) 1 and 2 only
Incremental Capital Output Ratio (ICOR) : (d) All of the above
1. The incremental capital output ratio (ICOR)
explains the relationship between the level 34. Consider the following statements:
of investment made in the economy and 1. The index of industrial production (IIP) is
the consequent increase in GDP. compiled and published monthly by the
2. The measure is used predominantly in Department for Promotion of Industry &
determining a country's level of Internal Trade (DPIIT), Ministry of
production efficiency and a higher ICOR is Commerce.
9
2. Crude Oil has the highest weightage in the

eight core sector industries. Answer Key
3. The index of industrial production (IIP) is Q.1) Ans: D Q.19) Ans: C
the only measure of the physical volume of Q.2) Ans: C Q.20) Ans: A
Q.3) Ans: B Q.21) Ans: B
production.
Q.4) Ans: C Q.22) Ans: B
Which of the statements given above is/are Q.5) Ans: A Q.23) Ans: C
correct? Q.6) Ans: D Q.24) Ans: C
(a) 1 and 2 only Q.7) Ans: B Q.25) Ans: C
(b) 3 only Q.8) Ans: C Q.26) Ans: B
(c) 1 and 3 only Q.9) Ans: C Q.27) Ans: C
Q.10) Ans: B Q.28) Ans: D
Q.11) Ans: C Q.29) Ans: A
Q.12) Ans: A Q.30) Ans: B
35. Consider the following statements regarding Q.13) Ans: D Q.31) Ans: B
Rule Curve: Q.14) Ans: B Q.32) Ans: C
1. A rule curve or rule level specifies the Q.15) Ans: B Q.33) Ans: A
storage or empty space to be maintained Q.16) Ans: C Q.34) Ans: B
in a reservoir during different times of the Q.17) Ans: D Q.35) Ans: B
year. Q.18) Ans: D
2. It displays how household expenditure on
a particular good or service varies with
change in household income.
3. It is part of the “core safety” mechanism in
a dam and decides the fluctuating storage
levels in a reservoir.
incorrect?
(a) 1 only
(b) 2 only
(c) 1 and 3 only
(d) 1 and 2 only
10
Planning
1. Consider the Basic features of Imperative 3. Which one of the following statements
Planning: appropriately describes “spatial planning”?
1. Numerically devoid qualitative targets. (a) The planning in which planners
2. Ownership rights of resources are assigned emphasises on the specific sector of the
and controlled by the central government. economy, i.e., agriculture, industry or the
3. No role for the market, no price services.
mechanism. (b) Methods and approaches used by the
4. Significant presence of the private sector public and private sector to influence the
in the economy to supplement state distribution of people.
intervention. (c) Spatial planning aims to raise revenue,
Select the incorrect answer using the code attain short-term economic growth with
given below: targets to bring price stability.
(a) 2 and 3 only (d) The planning which uses for the efficient
(b) 1, 2 and 4 only land use, infrastructure and settlement
(c) 2 and 4 only growth across a larger area of land.
(d) 1, 2, 3 and 4
4. The engineer-Statesman, M. Visvesaraya, was
2. Which of the following statement is correct the first to advocate the idea of planning for
about the type of planning: India, with The context of Visvesvaraya’s Plan
(a) Globally most countries are mixed consider the following statements:
economies with indicative types of 1. This plan was the first blueprint of Indian
planning. planning in pre-independence India.
(b) System planning emphasizes on socio- 2. Main idea of this plan was to implement
institutional factors to root out the command economy due to M.
problem in society and economy. Visvesvarya’s close association with
(c) Normative planning gives less importance Mysore state.
to socio economic problems such as caste, Which of the statements given above is/are
religion, and language to accomplish correct?
established goals. (a) 1 only
(d) NIti Aayog which was established in (b) 2 only
January 2015, was the official acceptance (c) Both 1 and 2
of system planning in India. (d) Neither 1 nor 2
11
5. Which of the following statement is correct 7. Consider the following statements:

about the National Planning Committee (NPC) 1. It was formulated by Narayan Agarwal.
set up in 1938: 2. Its proposals were the opposite of the one
1. The National Planning committee was set put forth by the Bombay plan.
up by the initiative of INC president J. L. 3. Ideologically this plan was against the
Nehru in 1938. commercialisation of the economy and
2. J.R.D. Tata, G.D. Birla was also invited for centralized state power.
participation in The National Planning Which of the following plans are accurately
committee. described by the above statements, select the
3. NPC was a 30-member committee devoid correct answer from the option given below:
of any sub-committee who failed to (a) The People’s Plan
produce any recommendation due to its (b) The Sarvodaya Plan
large membership. (c) The Gandhian Plan
Which of the statements given above is/are (d) Saraiya Report On Cooperatives
correct?
(a) 1 and 2 only 8. Economic reforms with the human face’, the
(b) 2 and 3 only slogan with which the economic reforms
(c) 2 only started in the early 1990s also has the
(d) 3 only resonance of the People’s Plan. With
reference to The Peoples plan consider the
6. The Bombay Plan with the popular title of ‘A following statements:
Plan of Economic Development for India’, 1. It was formulated by the communist leader
prepared by a cross-section of India’s leading Shaukat Usmani, SA Dange, Muzzafar
capitalists. With context of it consider the Ahmed.
following statements: 2. Only the industrial sector was highlighted
1. The Bombay plan was published under the by the plan due to communist ideology’s
editorship of John Mathai who later importance to the industrial worker.
became the first Railway minister in Select the incorrect answer using the code
Nehru's cabinet. given below:
2. There were evident conflicting views on (a) 1 only
the economic planning between the (b) 2 only
members of Bombay Plan and the National (c) Both 1 and 2
Planning committee. (d) Neither 1 nor 2
3. The Plan gave priority to the basic
industries. 9. Which of the following statements correctly
Select the correct answer using the code given describe the Sarvodaya plan?
below: 1. It was published in 1950 by the socialist
(a) 1,2 and 3 only leader Raj Narain who later won the
(b) 3 only electoral malpractice case against PM
(c) 1 and 2 only Indra Gandhi.
(d) 2 only 2. This plan was ideologically influenced by
the various Gandhian techniques.
3. This plan maker in later times had
protested against the centralising nature
of Indian economic planning.
12
Select the correct answer using the code given 12. Which of the following statement correct
below: about the Full-time Organisational
(a) 1 and 2 only Framework of NITI Aayog:
(b) 2 and 3 only (a) It will have a Vice-Chairperson to be
(c) 3 only appointed by the President of India.
(d) 1, 2 and 3 (b) Part Time Member maximum 6 and will be
on a rotational basis.
10. Consider the following statements: (c) Ex-Officio Members maximum of 4 from
1. Due to the serious food shortage and the Union Council of Ministers nominated
famine in 1966 Government of India by the PM.
decided to take an Annual plan. (d) Chief Executive Officer to be appointed by
2. The Rolling Plan was launched by the the President of India.
Janata government in 1990– 92 by
terminating the Fifth Five Year plan one 13. Which of the following were the objectives of
year ahead. planning in India after Independence?
Select the correct answer using the code given 1. Economic growth
below: 2. Modernisation
(a) 1 only 3. Self - reliance
(b) 2 only 4. Equity
(c) Both 1 and 2 5. Boost exports
(d) Neither 1 nor 2 6. Increase forex reserves
Select the correct answer using the codes given
11. In 2015, the government abolished the below:
Planning Commission and replaced it by a (a) 1, 2 and 3
new body—the NITI Aayog. The acronym (b) 1, 2, 3 and 4
NITI stands for National Institution for (c) 1, 2, 3, 4 and 5
Transforming India. With reference to the (d) All of the above
official function NITI Aayog consider the
following statements: 14. Consider the following statements regarding
1. Proposes the limit of campaign the Sarvodaya Plan and the Bombay Plan
expenditure per candidate to all parties. related to economic planning in India:
2. Cooperative and Competitive Federalism 1. The Sarvodaya Plan was drafted by
3. Vision & Scenario Planning Jayprakash Narayan whereas the Bombay
4. The measures needed to augment the Plan was led by JRD Tata and GD Birla.
Consolidated Fund of a State. 2. The Sarvodaya Plan was more socialist as
5. Conflict Resolution its main objective was to emphasize on
Which of the above function are correct, select agriculture and village industries,
the correct answer using the code given below: especially small-scale textile & cottage
(a) 1, 2 and 4 only industries in the process of economic
(b) 2 and 3 only development.
(c) 2, 3 and 5 only 3. The Bombay Plan was more capitalist as its
(d) 1. 2, 3, 4 and 5 primary objective was to achieve a
balanced economy and to raise the
standard of living of the masses of the
13
population rapidly by doubling per capita 17. Consider the following statements regarding
income. economic crisis faced by India during 1990:
Which of the statements given above is/are 1. High fiscal deficit.
correct? 2. High Current Account Deficit.
(a) 1 and 2 only 3. High import cover.
(b) 2 and 3 only 4. India was on the verge of defaulting on its
(c) 1 and 3 only International Debt Obligations.
(d) 1, 2 and 3 5. Very high inflation rates.
Which of the statements given above were the
15. Consider the following statements regarding reasons for the economic crisis?
Five Year Plans in India: (a) 1,2 and 3 only
1. The First Five Year Plan was based on P.C. (b) 2,3 and 4 only
Mahalanobis model. (c) 1,2,4 and 5 only
2. The Second Five Year Plan was based on (d) 2,3,4 and 5 only
the Harrod-Domar model.
3. The Third Five Year Plan was also known as 18. Consider the following statements with
‘Gadgil Yojana’. regard to globalization in India:
Which of the statements given above is/are 1. Reduction in brain drain.
incorrect? 2. Development of the capital market.
(a) 1 and 2 only 3. Increase in Foreign investment.
(b) 2 and 3 only 4. Reduction in inequalities.
(c) 1 and 3 only Which of the above have been the positive
(d) 1, 2 and 3 consequences of globalization in India?
(a) 1 and 2 only
16. Which of the following development (b) 2 and 3 only
initiatives have been undertaken by NITI (c) 1,2 and 3 only
Aayog since its inception? (d) 2,3 and 4 only
1. Aspirational Districts Program.
2. Atal Innovation Mission. 19. Which of the following was the main aim of
3. Sustainable Development in the Indian economic reforms under the New Economic
Himalayan Region Program Policy 1991?
4. Ek Bharat Shreshtha Bharat. (a) Market forces would drive the economy
5. Sustainable Action for Transforming towards development and growth
Human Capital (SATH) Program. (b) The government would drive the economy
6. Start-up India Program towards development and growth
Select the correct answer using the codes given (c) The public would drive the economy
below: towards development and growth
(a) 1,2,3,4 only (d) None of the above
(b) 2,3,4,5 only
(c) 1,2,3,4,5 only
(d) 2,3,4,5,6 only
14
20. Consider the following statements regarding Which of the statements given above is /are
Indian economy during British rule: incorrect?
1. Commercialisation of agriculture. (a) 1 only
2. Rise of new landlordism. (b) 2 only
3. Impoverishment of peasantry. (c) Both 1 and 2
4. Ruin of the traditional handicrafts industry. (d) Neither 1 nor 2
5. Technological advancement of agriculture.
6. Increase in foodgrains production. 23. Consider the following statements regarding
Which of the statements given above were the the difference between Planning Commission
impacts of colonial rule? and NITI Aayog:
(a) 1,2 and 3 only 1. NITI Aayog has adopted a bottom-up
(b) 1,2,3 and 4 only approach in planning which is a contrast to
(c) 3,4,5 and 6 only the Planning Commission’s tradition of
(d) All of the above top-down decision-making.
2. NITI Aayog, an advisory body, or a think-
21. Consider the following statements with tank, has powers to allocate funds to
respect to Circular Economy: ministries and state governments.
1. The products in the circular economy are 3. The NITI Aayog council comprises all the
more cost effective from a consumer point state Chief Ministers, along with the Chief
of view. Ministers of Delhi and Puducherry,
2. Circular Economy solves the problem of Lieutenant Governors of all UTs, and a vice-
disposal of waste to a large Extent. chairman nominated by the Prime
3. The circular economy has potential to Minister.
solve the problem of air pollution, water Which of the statements given above is /are
pollution etc. incorrect?
Which of the statements given above are (a) 3 only
Advantages of Circular Economy? (b) 2 only
(a) 1 and 2 only (c) 2 and 3 only
(b) 2 and 3 only (d) 1 and 3 only
(c) 1 and 3 only

24. Consider the following statements regarding
(d) 1, 2 and 3 Mahalanobis model:
1. The Mahalanobis model has been
constructed in terms of Keynesian
the types of Planning:
aggregates.
1. Imperative planning is based on the
2. Mahalanobis’ emphasis on basic heavy
principle of decentralization for the
industries was also due to his objective
operation and execution of plans
enabling the economy to stop imports of
2. In Indicative Planning, the planning
foreign capital equipment and machines.
authority decides about every aspect of
3. The plan was devised to enable India to
the economy to the minute details, sets
industrialize under conditions of stagnant
targets and administer its
or slowly growing exports.
implementations
15

correct?
(a) 1 and 3 only Answer Key
(b) 2 only Q.1) Ans: B Q.14) Ans: D
Q.2) Ans: A Q.15) Ans: A
(c) 2 and 3 only
Q.3) Ans: B Q.16) Ans: C
(d) 1, 2 and 3 Q.4) Ans: A Q.17) Ans: C
Q.5) Ans: C Q.18) Ans: C
25. RBI is entrusted with the responsibility of Q.6) Ans: B Q.19) Ans: A
conducting monetary policy in India with the Q.7) Ans: C Q.20) Ans: B
primary objective of maintaining price Q.8) Ans: C Q.21) Ans: D
stability while keeping in mind the objective Q.9) Ans: B Q.22) Ans: C
of growth. It is on the basis of its assessment Q.10) Ans: D Q.23) Ans: B
Q.11) Ans: C Q.24) Ans: D
of the monetary policy stance that a central
bank calibrates its actions. In which of the Q.13) Ans: B
following stances, RBI more likely to cut
down the interest rate?
1. Accommodative stance
2. Neutral stance
3. Hawkish Stance
4. Calibrated Tightening
below:
(a) 1 and 2 only
(b) 3 and 4 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4
16
Inflation
1. With reference to Inflation in India, consider 4. In the context of Inflation, consider the
the following statements: following statements:
1. Increasing Inflation in the Economy 1. Base Effect is the impact of the price
benefits the creditors. levels of previous year on the calculation
2. Real Estate Investments such as REITs can of inflation rate.
help against inflation. 2. Decrease in the Cash Reserve Ratio can
3. Very low inflation can lead to slow increase Inflation in the economy.
economic growth of the country. Which of the statements given above is/are
Which of the statements given above is/are correct?
incorrect? (a) 1 only
(a) 1 only (b) 2 only
(b) 2 and 3 only (c) Both 1 and 2 only
(c) 1 and 2 only (d) Neither 1 nor 2
(d) 2 only
5. With reference to GDP price Deflator, consider
2. In the context of Indian economy, consider the the following statements:
following statements: 1. It is a unique indicator as it calculates
1. The rate of inflation has steadily increased inflation by only measuring the nominal
in the last five years. GDP.
2. A severe and prolonged recession leads to 2. It covers limited commodity baskets for
depression in an economy. measuring Inflation.
3. Deficit financing is inherently inflationary 3. Imported Goods are an essential
in nature. component of GDP deflator.
Which of the statements given above is/are Which of the statements given above is/are
correct? incorrect?
(a) 2 only (a) 1 and 2 only
(b) 1 and 2 only (b) 2 only
(c) 2 and 3 only (c) 2 and 3 only
(d) 3 only (d) All of the above
3. Consider the following statements: 6. In the context of Inflation, consider the

1. Continued deflation is a sign of a Strong following statements:
economy. 1. Laspeyre Index is used for the calculation
2. Higher income tax may lead to a lower rate of the Wholesale Price Index.
of inflation. 2. When Inflation increases, the real value of
3. Low Inflation encourages Investment in the savings falls.
the economy. 3. Consumer Price Index covers only Goods in
Which of the statements given above is/are the economy.
incorrect?
(a) 1 and 3 only
(b) 1 only
(c) 2 and 3 only
(d) 2 only
17
Which of the statements given above is/are 10. In the context of Inflation, consider the
correct? following statements:
(a) 1 and 2 only 1. Inflation has a negative effect on the
(b) 2 and 3 only balance of payments.
(c) 1 and 3 only 2. Venture capital means a long-term start-
(d) All of the above. up capital provided to new
entrepreneurs.
7. In the context of Bonds, consider the following Which of the statements given above is/are
statements: correct?
1. Bond Prices fall when inflation increases. (a) 1 only
2. Bonds help in Capital Preservation. (b) 2only
Which of the statements given above is/are (c) Both 1 and 2
correct? (d) Neither 1 nor 2
(a) 1 only
(b) 2 only 11. Consider the following pairs:
(c) Both 1 and 2 Types of Inflation Causative factor
(d) Neither 1 nor 2 1. Cost-push Expensive raw
Inflation materials
8. Consider the following Pairs:
2. Core Inflation Inclusive of food
Terms Features
prices
1. Full Means Zero Unemployment
3. Skewflation Covers certain
Employment in the Economy
commodities only
2. Sovereign No issue of storage
Gold Bonds 4. Built-in Inflation Increase in wages
3. Laffer Analyzes the relationship Which of the pairs given above is/are correctly
curve between tax rates and the tax matched?
revenue (a) 1, 2, and 3 only
Select the correct answer using the code (b) 2, 3, and 4 only
below- (c) 1, 2, and 4 only
(a) 1 only (d) 1, 3, and 4 only
(b) 1 and 2 only
(c) 2 and 3 only 12. Which of the situations are responsible for the
(d) All of the above increased deflationary gap in the economy?
1. Increase in fiscal deficit.
9. If the repo rate is decreased in an economy, it
2. Fall in investment expenditure.
will:
3. Increase in Net exports.
(a) decrease the consumption expenditure in
the economy 4. Increase in saving attitude.
(b) increase the tax collection of the Select the correct answer using the codes given
Government below:
(c) increase the total employment in the (a) 1 and 2 only
economy (b) 2 and 3 only
(d) Decrease in the interest rates (c) 2 and 4 only
(d) 1, 2, and 4 only
18
13. Consider the following statements regarding 16. Consider the following situations:
inflation in an economy: 1. Ease of import restrictions.
1. The base effect always amplifies the 2. Banning the export of commodities under
inflation levels in an economy. inflation.
2. A certain degree of creeping inflation is 3. Decentralized cold storage facilities.
considered essential for an economy. Which of the above would be effective in
Which of the statements given above is/are fighting inflation?
incorrect? (a) 1 and 2 only
(a) 1 only (b) 2 and 3 only
(b) 2 only (c) 1 and 3 only
(c) Both 1 and 2 (d) All of the above
(d) Neither 1 nor 2
14. Consider the following statements: Stagflation:
1. The headline inflation used in normal 1. It happens when an economy faces
parlance refers to CPI (All India). stagnant growth as well as persistently
2. CPI (All India) assigns maximum weightage high inflation.
to food and beverages. 2. The purchasing power of a consumer is not
3. The base year for both CPI and WPI is taken affected by stagflation.
as 2011. 3. Stagflation results in high inflation,
Which of the statements given above is/are stagnation, and high unemployment.
correct? Which of the given statements are correct?
(a) 1 and 2 only (a) 1 and 2 only
(b) 2 and 3 only
(b) 2 and 3 only
(c) 1 and 3 only
(c) 1 and 3 only
(d) 1,2 and 3
(d) 1, 2, and 3
18. With respect to impact of Inflation on value
of currency which of the following is correct?
1. The difference between Wholesale Price (a) Value of currency increases.
Index and the Producers’ Price Index is the (b) Value of currency decreases.
inclusion services in the former. (c) Value of currency remains unchanged.
2. Rise in Non-Performing Assets and (d) None of the above.
protectionists policy by foreign countries
increases the Index of Industrial 19. With reference to ' Consumer price Index '
Production. Consider the following statements:
Which of the statements given above is/are 1. Consumer Price Index or CPI is the
correct? measure of changes in the price level of a
(a) 1 only basket of consumer goods and services
(b) 2 only bought by households.
(c) Both 1 and 2 2. Consumer price Index is released by the
(d) Neither 1 nor 2 National Statistical Office (NSO).
19
Which of the above statement/s is/ are 23. Reserve Bank of India is the authority to
correct? control inflation through monetary policies.
(a) 1 only Which of the following tools will the RBI take
(b) 2 only to curb inflation?
(c) Both 1 and 2 1. Increase Cash Reserve Ratio.
(d) Neither 1 nor 2 2. Decrease Statutory liquidity Ratio.
3. increase in repo rates.
20. With reference to GDP deflator consider the Which of the above statements are correct?
following statements: (a) 1, 2 and 3 only
1. The GDP price deflator measures the (b) 2 and 3 only
changes in prices for all of the goods and (c) 1 and 3 only
services produced in domestic territory. (d) 3 only
2. Imported goods are part of GDP and show
up in the GDP deflator. 24. With reference to Phillips Curve Consider the
Which of the above statements is/are correct? following statements:
(a) 1 only 1. The Phillips curve states that inflation and
(b) 2 only unemployment have an inverse
(c) Both 1 and 2 relationship.
(d) Neither 1 Nor 2 2. Stagflation scenario completely supports
the Phillips curve idea.
21. With reference to Wholesale price Index Which of the above statements are correct?
(WPI) consider the following statements: (a) 1 only
1. Wholesale price Index measures the (b) 2 only
changes in the prices of goods sold and (c) 1 and 2 only
traded in bulk by wholesale businesses to (d) Neither 1 Nor 2
other businesses.
2. In WPI the highest weightage is given to 25. After revision of base year by CSO Headline
fuel and power. growth rate will now be measured by:
3. The base year of All-India WPI is 2004-05. (a) GDP at current market prices
Which of the above statements is/are correct? (b) GDP at constant market prices
(a) 1, 2 and 3 (c) GDP at current factor prices
(b) 2 only (d) GDP at constant factor prices
(c) 1 and 3 only
(d) 1 only 26. Which of the following are the features of
Market Economy?
22. Which of the following situations contribute 1. Suitable environment (market)
to the Inflation situation in an economy? determined by the forces of demand and
1. Excess circulation of money. supply (called the market forces) is
2. Demand-supply gap. required.
3. Increase in tax rates. 2. Government should follow a policy of
Which of the above statements are correct? laissez faire
(a) 1 and 2 only 3. In a market economy, the market regulates
(b) 2 and 3 only the competition.
(c) 1 and 3 only
(d) 1, 2 and 3.
20
Select the correct code among the following: 30. What are the possible effects of higher
(a) 1 and 2 only inflation in an economy?
(b) 1 and 3 only 1. Nominal wage increases
(c) 2 and 3 only 2. Beneficial for importers and harmful for
(d) All of the above exports
3. Depreciation of currency
27. Consider the following statements: 4. Redistribute wealth from debtors to
1. Disinflation refers to a persistent fall in the creditors
general level of prices while deflation is a Which of the options given above are correct?
decrease in the rate of inflation. (a) 1 and 3 only
2. Inflation decreases the value of money (b) 2 and 4 only
whereas the deflation increases its value. (c) 1, 3 and 4 only
Which of the statements given above is/are (d) All of the above
Incorrect?
(a) 1 only 31. Consider the following statements regarding
(b) 2 only Inflation Targeting:
(c) Both 1 and 2 1. It is a monetary policy where the central
(d) Neither 1 nor 2 bank sets a specific inflation rate as its goal
and adjusts its monetary policy to achieve
28. What are the possible causes of disinflation in that rate.
an economy? 2. The Monetary Policy Committee (MPC)
1. Drop-in Money Supply and Central government determines the
2. Recession policy interest rate required to achieve the
3. Rise in Unemployment inflation target.
Which of the options given above are correct? 3. It is set by the Reserve Bank of India once
(a) 1 and 2 only every five years.
(b) 2 and 3 only Which of the statements given above is/are
(c) 1 and 3 only Incorrect?
(d) All of the above (a) 1 only
(b) 2 and 3 only
29. Which of the following curve defines the best (c) 1 and 3 only
relationship between Inflation and (d) All of the above
Unemployment?
(a) Phillips Curve 32. Which of the following factors are responsible
(b) Laffer Curve for causing Cost-Push Inflation?
(c) Lorentz Curve 1. Crude oil price fluctuation
(d) Kuznets Curve 2. Low growth of Agricultural sector
3. Increase in direct taxes
Which of the options given above is/are
correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
21
33. The term Stagflation was coined by Iain

Macleod, a Conservative Party MP in the 36. Consider the following statements regarding
United Kingdom, in November 1965. Which Shrink inflation:
of the following events are most likely to 1. Shrink inflation is when an economy goes
happen when an economy is undergoing down by size in monetary terms due to
Stagflation? prevailing low prices.
1. Rapid increase in growth rate 2. An increase in the cost of input materials
2. High level of unemployment and intense competition results in
3. High level of Inflation or price rise Shrinkflation.
Select the correct answer using the code given Which of the statements given above is/are
below: Incorrect?
(a) 1 and 2 only (a) 1 only
(c) 1 and 3 only (c) Both 1 and 2
(d) 1, 2 and 3 (d) Neither 1 nor 2

Recession:
1. If the recessionary phase lasts for a longer
period of time, then the economy is said to Answer Key
be in a state of a technical recession Q.1) Ans: A Q.19) Ans: C
2. During recessions, the central bank Q.2) Ans: C Q.20) Ans: A
typically increases interest rates in an Q.3) Ans: B Q.21) Ans: D
effort to boost spending in economy.
Q.5) Ans: D Q.23) Ans: C
Which of the statements given above is /are Q.6) Ans: A Q.24) Ans: A
correct? Q.7) Ans: C Q.25) Ans: B
(a) 1 only Q.8) Ans: C Q.26) Ans: A
(b) 2 only Q.9) Ans: D Q.27) Ans: A
(c) Both 1 and 2 only Q.10) Ans: C Q.28) Ans: D
(d) Neither 1 nor 2 Q.11) Ans: D Q.29) Ans: A
types of Inflation: Q.15) Ans: D Q.33) Ans: B
1. Inflation that occurs due to increase in Q.16) Ans: D Q.34) Ans: D
aggregate demand is referred to as cost Q.17) Ans: C Q.35) Ans: D
push inflation Q.18) Ans: B Q.36) Ans: A
2. Price rise in all goods and services except
food and energy due to high price
fluctuations is headline inflation.
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
22
Agriculture
1. With reference to Cropping Intensity, consider 4. In the context of Urea, consider the following
the following statements: statements:
1. It refers to raising a number of crops from 1. The MRP of urea is statutorily fixed by the
the same field during one agricultural year. Government of India.
2. Gross Cropped Area is a factor of Cropping 2. Urea is covered under the Nutrient Based
Intensity Calculation. Subsidy Scheme.
Which of the statements given above is/are 3. Urea takes a lot of time to convert into
correct? ammonia in the soil.
(a) 1 only Which of the statements given above is/are
(b) 2 only incorrect?
(c) Both 1 and 2 (a) 1 only
(d) Neither 1 nor 2 (b) 2 and 3 only
(c) 1 and 3 only
2. With reference to Agriculture in India, consider (d) None of the above.
the following statements:
1. Kharif crops are sown with the onset of 5. In the context of Seeds used in Indian
monsoon in different parts of the country. Agriculture, consider the following
2. Blossom Showers in Kerala, help in the statements:
flowering of plantation crops like Coffee 1. Non-farmers cannot purchase fertilisers
and Tea. through the PoS machines.
3. Improper drip irrigation installation often 2. No FDI under the automatic route is allowed in
culminates into poor root development. the seed infrastructure in India.
Which of the statements given above is/are 3. Seed Replacement Rate is a measure of how
correct? much of the total cropped area was sown with
(a) 1 and 2 only certified seeds in comparison to farm saved
(b) 2 and 3 only seeds.
(c) 1 and 3 only Which of the statements given above is/are
(d) All of the above correct?
(a) 1 and 3 only
3. With reference to Contract Farming in India,
(b) 2 and 3 only
consider the following statements:
(c) 3 only
1. The Model APMC Act, 2003 provides
specific provisions for contract farming. (d) All of the above.
2. Private Investment in Agriculture can be
6. In the context of Minimum support Price,
increased via Contract Farming.
consider the following Statements:
1. Value of unpaid family labour is not
correct?
factored in while computing the
(a) 1 only
production cost of a crop.
(b) 2 only
2. The CACP does not do any field-based cost
(c) Both 1 and 2
estimates itself.
(d) Neither 1 nor 2
3. MSP is available for Raw cotton, Moong,
Raw jute, Copra, Soyabean and De-husked
coconut.
23
correct? incorrect?
(c) 2 only (c) Both 1 and 2
(d) 2 and 3 only (d) Neither 1 nor 2
7. With reference to Fish production in India, 10. Consider the following statements:
consider the following sentences: 1. Phosphorus is an essential nutrient that
1. The share of inland fisheries has gone less helps in root development of the plant.
than 50 percent in total fish production in 2. Vertical Farming uses techniques such as
recent years. hydroponics, aquaponics, and aeroponics.
2. India is the world’s largest fish producer. 3. Growing more than two crops in a piece of
3. Shaphari Certification Scheme is related to land in a year in orderly succession is called
Aquaculture Products. Inter Cropping.
incorrect? correct?
(a) 1 only (a) 1 only
(b) 2 and 3 only (b) 2 and 3 only
(c) 2 only (c) 1 and 2 only
(d) All of the above. (d) 3 only
8. With reference to Agriculture in India, consider 11. In the context of Rainfed Farming, consider
the following statements: the following statements:
1. Pradhan Mantri Matsya Sampada Yojana 1. India stands first among the rainfed
aims to achieve a reduction in post-harvest agricultural countries of the world.
to 10%. 2. Entisols can be found in the Rainfed areas.
2. A hard frost is injurious to the growth of Which of the statements given above is/are
the cotton plant. correct?
3. Sugarcane can be cultivated using settings (a) 1 only
prepared from tissue culture. (b) 2 only
Which of the statements given above is/are (c) Both 1 and 2
correct? (d) Neither 1 nor 2
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
9. With reference to Agroforestry, consider the

following statements:
1. It is the Integrated management of crops,
livestock and trees as a system rather than
individually.
2. It helps preserve germplasm of
endangered species.
24

12. Consider the following statements: correct?
1. The Sahakar Mitra Scheme was launched (a) 1 only
by the Ministry of Micro, Small and (b) 2 and 3 only
Medium Enterprises for online Placement (c) 1 and 3 only
of Trainees for helping employers to post (d) 3 only
job openings, & facilitating candidates to
apply. 15. With reference to APEDA, Consider the
2. Bhavantar Bhugtaan Yojana of Odisha following statements:
sought to provide relief to farmers by 1. APEDA is mandated with the
providing the differential between MSPs responsibility of export promotion and
and market prices. development of agricultural and allied
3. Adopting no-tillage in agro-ecosystems products.
enhances carbon (C) sequestration in soils. 2. It is a statutory body under the Ministry
Which of the statements given above is/are of Agriculture and Farmers Welfare.
correct? 3. It has been entrusted with the
(a) 1 and 2 only responsibility to monitor import of
(b) 2 and 3 only sugar.
(c) 3 only Which of the statements given above is/are
(d) 2 only correct?
(a) 1 and 2 only
13. With reference to Pulses, consider the (b) 2 and 3 only
following statements: (c) 1 and 3 only
1. Pulses help in the Nitrogen fixation in the (d) 2 only
soil.
2. Bihar is the leading producer of Pulses in 16. In the context of Minimum Support Prices,
India. consider the following statements:
3. Pulse crops are grown only during the 1. Inter-crop price parity and International
kharif season in India. price situation are taken into consideration
Which of the statements given above is/are while determining MSP’s.
correct? 2. MSP falls under the Amber Box Category of
(a) 1 only WTO.
(b) 2 only 3. MSP is defined as the Price at which the FCI
(c) 2 and 3 only sells the food grain for PDS consumption.
(d) 1 and 2 only Which of the statements given above is/are
incorrect?
14. Consider the following statements: (a) 1 only
1. No Union Territory has yet achieved the (b) 2 and 3 only
status of 100% organic region. (c) 3 only
2. Organic farmers do not use any kinds of (d) None of the above.
fertilizers
3. “India Organic” is a certification mark for
organically farmed food products
manufactured in India.
25
17. Consider the following Pairs: Select the correct answer using the code given
Type of Agriculture Features below:
1. Primitive Depends upon (a) 1 and 2 only
Subsistence Farming monsoon and (b) 2 and 3 only
natural fertility of (c) 3 only
the soil. (d) 1, 2 and 3
2. Mixed farming Rearing of animals

and cultivation of
1. Jute is primarily grown in West Bengal,
crops together
Odisha and Assam and Andhra Pradesh.
3.Intensive Farming Uses higher inputs 2. Cold desert areas of India such as Lahaul
to increase the and Spiti, Ladakh are suitable for
overall yield cultivation of Asafoetida.
Select the correct answer using the codes Which of the statements given above is/are
given below: correct?
(d) All of the above. (d) Neither 1 and 2
18. In the context of Plantation Agriculture, 21. Consider the following statements about:
consider the following: 1. It is aimed at modernising fishing
1. Plantation agriculture is a type of infrastructure and quality control.
commercial farming. 2. It is under the Ministry of Food Processing
2. Only food crops are grown in Plantation & Industries.
Agriculture. 3. Mega Food Parks are essential
Which of the statements given above is/are components of the Scheme.
correct? Which of the statements given above is/are
(a) 1 only correct?
(c) Both 1 and 2 (b) 1 and 2 only
(d) Neither 1 nor 2 (c) 2 and 3 only
(d) 3 only
19. What is/are the advantage/advantages of
leaving crop residues on the field itself? 22. With reference to Agriculture in India,
1. It helps in the controlling of runoff and consider the following statements:
erosion in the fields. 1. Jhumming is practised in Arunachal
2. It improves infiltration and aeration within Pradesh, Assam, Manipur, Meghalaya,
the soil profile. Mizoram.
3. It increases the levels of particulate matter 2. In states like West Bengal and Odisha,
in the air. three crops of paddy are grown in a year.
3. Madhuban Gajar variety is rich in high beta
carotene and iron content.
correct?
26
(a) 1 and 2 only Which of the statements given above is/are

(b) 2 and 3 only incorrect?
(c) 1 and 3 only (a) 1 only
(d) All of the above (b) 2 only
(c) Both 1 and 2
23. With reference to Agricultural Credit in India, (d) Neither 1 nor 2
consider the following statements:
1. Regional Rural Banks provide credit 26. Consider the following Pairs:
particularly to small and marginal farmers, Diseases Affecting Plants
agricultural laborers, artisan and small 1. Yellow Rust Cotton
entrepreneurs. 2. Panama Disease Banana
2. They cannot issue credit cards to its 3. Pink Bollworm Wheat
customers. Select the correct answer using the codes
3. RRB’s can access the marginal standing given below:
(a) 1 and 2 only
facility of the RBI, if required.
Which of the statements given above is/are (b) 2 only
correct? (c) 1 and 3 only
(a) 2 and 3 only (d) All of the above.
(b) 1 only
27. In the context of Biofortification, consider the
(c) 1 and 3 only
(d) All of the above.
1. Biofortification can be done only using
genetically-modified methods.
2. Hidden Hunger can be solved by the
1. Kisan Credit Card covers post-harvest
expenses, produce marketing loan and techniques of Biofortification.
3. It involves improving the nutritional
consumption requirements of farmer
content of food crops during the
households.
processing stage.
2. Farmers involved in the crop production or
allied activities such as animal husbandry;
fisheries are eligible for Kisan Credit Card correct?
Loan Scheme. (a) 1 and 2 only
Which of the statements given above is/are (b) 1 and 3 only
correct? (c) 2 and 3 only
(a) 1 only (d) 2 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2 1. Foot and mouth disease is a highly
contagious viral disease that is
25. With reference to Agridex, consider the transmissible to humans.
2. Fertilizer and nutrient loss is minimized
1. It tracks the performance of 10,000 liquid due to localized application of Sprinkler
commodities traded on the NCDEX Irrigation.
platform.
2. It will facilitate the participants in hedging correct?
their commodity risk. (a) 1 only
27
(b) 2 only
(c) Both 1 and 2 31. With reference to the Eleventh Agricultural
(d) Neither 1 nor 2 Census (2021-22) which was launched
recently, which of the following statements
29. About agriculture sector in India and its are correct?
current trend in Indian economy, consider 1. Agriculture Census is conducted every 5
the following statements: years.
1. Agriculture sector is the second biggest 2. This is the first time that data collection for
private sector job provider after real estate agricultural census will be conducted on
in India in terms of the number of jobs they smartphones and tablets.
both provide. 3. Agriculture Census is organised by the
2. Agriculture sector is the biggest Department of Agriculture and Farmers
unorganised sector of the economy Welfare, Ministry of Agriculture.
contributing more than 90 per cent share Select the correct answer from the code given
in the total unorganised labour-force. below:
3. Since the economic reforms began, India (a) 1 and 2 only
has remained consistently a ‘net exporter’ (b) 1 and 3 only
of agri-products. (c) 2 and 3 only
4. Agriculture is the only profession which (d) All of the above
still carries no burden of individual income
tax. 32. About Minimum Support Price (MSP) which
Which of the statements given above are of the following statements are incorrect?
correct? 1. MSP is a form of market intervention by
(a) 2 and 3 only the Government of India to insure
(b) 1, 3 and 4 only agricultural producers against any sharp
(c) 2, 3 and 4 only rise in farm prices.
(d) 1, 2 and 4 only 2. MSP is a guarantee price to save farmers
from distress sale.
30. Post Independence, the Government of India 3. The MSPs are announced on the basis of
took efforts for land reforms, under which the recommendations of the Cabinet
tenancy reform was an integral part. Which committee on economic affairs (CCEA).
of the following things falls under tenancy 4. As of now, MSP is announced for 23
reforms? commodities.
1. Abolition of Zamindari system Select the correct answer from the code given
2. Regulation of rent below:
3. Ownership rights to tenants (a) 1, 2 and 3 only
4. Redistribution of land among the landless (b) 1 and 3 only
poor (c) 2 and 4 only
5. Security of tenure (d) 2, 3 and 4 only
Select the correct answer from the code given
below: 33. Consider the following statements regarding
(a) 1, 2 and 5 only procurement of foodgrains in India:
(b) 2, 3 and 5 only 1. Food Corporation of India (FCI) is the
(c) 1, 2 and 4 only whole and sole and only agency who does
(d) All of the above the procurement of foodgrains at MSP.
28
2. FCI has also been nominated as an 1. PDS is operated under the joint
additional nodal Agency for procurement responsibility of the Central and the State
of Pulses and Oilseeds. Governments.
Which of the above statements is/are correct? 2. Controlling the increased prices of
(a) 1 only foodgrains is one of the major outcomes of
(b) 2 only PDS
(c) Both 1 and 2 3. Identification of eligible families, issue of
(d) Neither 1 nor 2 Ration Cards, procurement, storage,
transportation are some of the
34. Consider the following statements about responsibilities of central government
Food Corporation of India: performed by FCI under PDS
1. Food Corporation of India (FCI) is a Public Which of the above statements are correct?
Sector Undertaking under the Ministry of (a) 1 and 2 only
Agriculture. (b) 1 and 3 only
2. It has the primary duty to undertake (c) 2 and 3 only
purchase, store, move/transport, (d) All of the above
distribute and sell food grains and other
foodstuffs. 37. Consider the following statements about
3. Effective Price Support Operations for National Food Security Act:
safeguarding the interest of farmers is one 1. Upto 75% of the rural population and 50%
of the objectives of FCI. of the urban population will be covered
Which of the above statements are correct? with uniform entitlement of 5 kg per
(a) 1 and 2 only person per month.
(b) 1 and 3 only 2. Antyodaya Anna Yojana (AAY) households
(c) 2 and 3 only will be protected at 35 kg per household
(d) All of the above per month.
3. Pregnant women and lactating mothers
35. About Commission for Agricultural Costs & will also be entitled to receive maternity
Prices (CACP) which of the following benefits of not less than Rs. 6,000.
statements is/are correct? 4. Provision for food security allowance is not
1. MSP for major agricultural products is fixed yet included under the act in case of non-
by the CACP. supply of entitled foodgrains or meals.
2. The CACP is an attached office of the Which of the statements given above are
Ministry of Agriculture and Farmers correct?
Welfare. (a) 1, 2 and 3 only
Select the correct code given below: (b) 1, 2 and 4 only
(a) 1 only (c) 1 and 4 only
(b) 2 only (d) 2, 3 and 4 only
(c) Both 1 and 2
(d) Neither 1 nor 2 38. Which of the following are beneficiaries
under Antyodaya Anna Yojana?
36. Consider the following statements about 1. Landless agricultural labourers.
Public Distribution System in India: 2. Persons earning their livelihood on a daily
basis in the informal sector.
3. A household headed by disabled persons.
29
4. All primitive tribal households. 3. Apart from domestic procurement from

5. Senior citizens. farmers/wholesale mandis, import may
Select the correct answer from the code given also be undertaken with support from the
below: Fund.
(a) 1, 3 and 5 only Select the correct answer from the codes given
(b) 1, 3, 4 and 5 only below:
(c) 2, 3 and 5 only (a) 2 only
(d) All of the above (b) 1 and 3 only
(c) 2 and 3 only
39. Which of the following are components of the (d) All of the above
economic cost of foodgrains?
1. MSP including central bonus 42. Which of the following are reasons for
2. Procurement incidentals maintaining buffer stock of foodgrains by
3. Cost of distribution Government of India:
Select the correct answer from the codes given 1. Meeting the prescribed minimum buffer
below: stock norms for food security
(a) 1 and 2 only 2. For price stabilization or market
(b) 1 and 3 only intervention to augment supply so as to
(c) 2 and 3 only help moderate the open market prices.
(d) All of the above 3. Meeting emergency situations arising out
of unexpected crop failure, natural
40. Consider the following statements about disasters.
Open Market Sale Scheme (OMSS): Which of the statements given above are
1. OMSS refers to the selling of food grains by correct?
the government/government agencies at (a) 1 and 2 only
predetermined prices in the open market (b) 1 and 3 only
from time to time. (c) 2 and 3 only
2. OMSS aims to moderate the prices by (d) All of the above
enhancing the supply of foodgrains during
the lean season. 43. Which of the following statements is/are
Which of the above statements is/are correct? incorrect about Decentralized Procurement
(a) 1 only Scheme (DCP)
(b) 2 only 1. Under this scheme, the designated states
(c) Both 1 and 2 procure, store and also issue foodgrains
(d) Neither 1 nor 2 under the Targeted Public Distribution
System (TPDS)
41. Which of the following statements regarding 2. The difference between the procurement
Price stabilization funds is/are correct? cost of the states and the central issue
1. PSF was created to absorb the volatility in price (CIP) is passed on to the states by the
the prices of selected commodities Government of India as a subsidy.
2. The scheme provides for maintaining a Select the correct answer using the code given
strategic buffer of selected commodities below:
for subsequent calibrated release to (a) 1 only
moderate price volatility and discourage (b) 2 only
hoarding and unscrupulous speculation. (c) Both 1 and 2
30
(d) Neither 1 nor 2 3. This act was aimed at curbing inflation

Select the correct answer from the codes given
44. Consider the following statements with below:
reference to Negotiable Warehouse Receipt (a) 1 and 2 only
System: (b) 1 and 3 only
1. It was launched by the Ministry of (c) 2 and 3 only
Agriculture and Farmers’ Welfare. (d) All of the above
2. These receipts are issued directly by the
Food corporation of India to the farmers. 47. Which of the following is/are correct about
3. Farmers can seek loans from banks against the Agricultural produce market committee
the warehouse receipts issued to them (APMC):
against their storage. 1. APMCs are regulated by states.
Which of the statements given above is/are 2. Aim of APMC is to ensure farmers are
correct? safeguarded from exploitation by large
(a) 1 and 2 only retailers, as well as ensuring the farm to
(b) 2 only retail price spread does not reach
(c) 3 only excessively high levels
(d) All of the above Select the correct answer using the codes given
below:
45. Which of the following statements regarding (a) 1 only
Pradhan Mantri Kisan Samman Nidhi (PM- (b) 2 only
KISAN) is/are correct? (c) Both 1 and 2
1. It is a centrally sponsored scheme with (d) Neither 1 nor 2
50:50 share funding by both centre and
state (75:25 for north Eastern states). 48. Which of the following statements about
2. Under the scheme, the Centre transfers an National Agricultural Cooperative Marketing
amount of Rs 6,000 per year, in three equal Federation of India (NAFED) are incorrect?
installments. 1. One of the objectives of NAFED is to
3. The entire responsibility of identification organize, promote, and develop marketing
of beneficiary farmer families rests with and storage of agricultural and forest
the State / UT Governments. produce.
Select the correct answer using the code given 2. NAFED is registered under the Multi State
below: Co-operative Societies Act.
(a) 1 and 2 only 3. NAFED is also one of the procurement
(b) 1 and 3 only agencies along with FCI.
(c) 2 and 3 only 4. NAFED is the Nodal Agency to implement
(d) All of the above price stabilization measures under
Operation Green
46. Which of the following statements is/are Select the correct answer from the codes given
correct about the Essential Commodities Act? below:
1. There is no specific definition of essential (a) 2 and 4 only
commodities in the Essential Commodities (b) 4 only
Act, 1955. (c) 1 and 3 only
2. The Act aims to prevent hoarding and black (d) None of the above
marketing of foodstuffs.
31
49. Identify the correct statements about Mission 51. Which of the following are the features of the
for Integrated Development of Horticulture Model Agriculture Produce and Livestock
(MIDH): Marketing Act, 2017?
1. It is a Central Sector Scheme for the holistic 1. Agricultural Produce and Livestock Market
growth of the horticulture sector. Committee (APLMC) provides recognition
2. In 2014, CHAMAN ‘Coordinated of a State/UT as a single market.
programme on Horticulture Assessment & 2. To give freedom to the agriculturalists to
Management using geoinformatics’ was sell their produce to the buyers and at the
initiated under MIDH. place and time of their choice.
3. It also provides technical advice and 3. Centralisation of Market Committee and
administrative support to State State/UT Marketing Board to streamline
Governments/ State Horticulture Missions their functions
(SHMs) for the Saffron Mission. Select the correct answer from the codes given
Select the correct answer using the codes given below:
below: (a) 1 and 2 only
(a) 1 and 2 only (b) 1 and 3 only
(c) 2 and 3 only (d) All of the above
52. India is the largest producer of which of the
50. Which of the following statements are correct following crops?
about Operation Green? 1. Coffee
1. It was launched by the Ministry of 2. Pulses
Agriculture. 3. Cotton
2. Operation Greens seeks to stabilize the 4. Oil palm
supply of Tomato, Onion and Potato (TOP) Select the correct answer using the code given
crops and to ensure availability of TOP below:
crops throughout the country round the (a) 1, 2 and 3 only
year without price volatility. (b) 2 and 3 only
3. NAFED will be the Nodal Agency to (c) 3 and 4 only
implement price stabilization measures (d) 1, 2 ,3 and 4
under 'Operations Green’
Select the correct answer from the codes given 53. Consider the following regarding Fisheries
below: sector in India:
(a) 1 and 2 only 1. While Inland Fisheries are fully managed
(b) 1 and 3 only by State Governments, Marine Fisheries
(c) 2 and 3 only are a responsibility of the Central
(d) All of the above Governments.
2. The Government of India has extended the
facility of Kisan Credit Card (KCC) to
fisheries and animal husbandry farmers to
help them meet their working capital
needs.
32
Which of the statements given above is /are 56. Consider the following statements regarding
incorrect? Soil Health Card Scheme:
(a) 1 only 1. The Soil Health Card Scheme is
(b) 2 only implemented by the Central Government
(c) Both 1 and 2 in those States and Union Territories which
(d) Neither 1 nor 2 have approved it.
2. It contains the status of soil with respect to
54. Consider the following statements regarding 12 parameters in which the secondary
eNAM: nutrients are Nitrogen (N), Phosphorus (P)
1. Food corporation of India is the lead and Potassium (K).
agency for implementing eNAM. 3. Under the Soil Health Card Scheme, a
2. e-NAM provides single window services for farmer will get the soil health card once
all Agricultural Produce Market Committee every 3 years.
(APMC) related services and information. Which of the statements given above is/are
Which of the statements given above is/are correct?
correct? (a) 2 only
(c) Both 1 and 2 (d) None of the above
(d) Neither 1 nor 2
57. About the Horticulture sector in India, which
55. About fertilizer subsidy in India, which of the following statements is/are correct?
statements given below is/are correct? 1. Horticulture crops are characterized by
1. Indian fertilizer industry is second largest high-value crops, higher productivity per
in the world in terms of production and unit of area and lower requirement of
largest in terms of consumption irrigation and input cost.
2. Urea is the only fertilizer at present with 2. India is the largest producer of Horticulture
pricing and distribution being controlled products in the world.
statutorily by the Government. Select the correct answer from the codes given
Select the correct answer from the codes given below:
below: (a) 1 only
(b) 2 only (c) Both 1 and 2
(c) Both 1 and 2 (d) Neither 1 nor 2
(d) Neither 1 nor 2
58. Consider the following statements about
cotton production in India and identify the
correct statements:
1. Cotton is a Kharif crop and grows well in
black cotton soil of the Deccan plateau.
2. India is the highest cotton producing
country in the world.
3. The textile industry employs the highest
number of people in the country after
agriculture.
33
Select the correct answer from the codes given 61. Which of the following are the characteristics
below: of Mixed economy:
(a) 1 and 2 only 1. State and private sector both have
(b) 1 and 3 only economic roles.
(c) 2 and 3 only 2. Private sector to play those roles where
(d) All of the above invisible hands can work properly and
State is prohibited from playing this role.
59. Which of the following statements regarding 3. Economic roles played by state and private
the jute industry in India is/are correct? sector remains fixed
1. India is the largest producer of jute, also Select the correct answer using the codes given
largest in terms of acreage and trade. below:
2. It is mainly concentrated in eastern India (a) 1 only
because of the rich alluvial soil of Ganga- (b) 1 and 2 only
Brahmaputra delta. (c) 2 and 3 only
Select the correct answer from the codes given (d) 3 only
below:
(a) 1 only 62. Which of the following statements are correct
(b) 2 only about Agriculture Infrastructure Fund (AIF)
(c) Both 1 and 2 1. It is a Central Sector Scheme
(d) Neither 1 nor 2 2. The scheme shall provide a medium - long
term debt financing facility for investment
60. About Fair and Remunerative Price (FRP) for in viable projects for post-harvest
sugarcane, which of the following statements management Infrastructure.
are correct? 3. Credit guarantee coverage will be available
1. It replaced the Statutory Minimum Price under Credit Guarantee Fund Trust for
(SMP) of sugarcane in 2009 through Micro and Small Enterprises (CGTMSE)
amendment of the Sugarcane (Control) scheme
Order, 1966 Select the correct code from given below:
2. It is determined on the basis of (a) 1 and 2 only
recommendations given by the (b) 1 and 3 only
Commission for Agricultural Costs and (c) 2 and 3 only
Prices (CACP) (d) All of the above
3. FRP is generally higher than State-Advised
Prices (SAPs) 63. Which of the following statements about the
Select the correct answer from the codes given National Mission on Edible Oils - Oil Palm
below: (NMEO-OP) is/are correct?
(a) 1 and 2 only 1. It aims to augment the availability of edible
(b) 1 and 3 only oil in the country by harnessing area
(c) 2 and 3 only expansion, increasing crude palm oil
(d) All of the above production with the aim to reduce the
import burden.
2. It provides Price assurance to the oil palm
farmers on the lines of the MSP
34
3. It provides special focus on states of

western ghats due to its favourable
climatic factors for the growth of palm.
Select the correct answer using the codes given Answer Key
below:
(a) 1 and 2 only Q.3) Ans: C Q.35) Ans: B
(b) 1 and 3 only Q.4) Ans: B Q.36) Ans: A
(c) 2 and 3 only Q.5) Ans: C Q.37) Ans: A
(d) All of the above Q.6) Ans: D Q.38) Ans: D
Q.7) Ans: D Q.39) Ans: D
64. Consider the following statements: Q.8) Ans: D Q.40) Ans: C
This commercial plant is equatorial in nature and Q.9) Ans: D Q.41) Ans: D
needs above 25°C with a moist and humid climate
and rainfall more than 200 cm. It grows well- Q.12) Ans: C Q.44) Ans: C
drained alluvial soil. The British established its first Q.13) Ans: A Q.45) Ans: C
plantation in India in 1902 on the banks of the river Q.14) Ans: D Q.46) Ans: D
Periyar in Kerala. 100% Foreign Direct Investment Q.15) Ans: C Q.47) Ans: C
(FDI) is allowed in its plantations. Q.16) Ans: C Q.48) Ans: D
Which of the options correctly explains the Q.17) Ans: D Q.49) Ans: C
Q.18) Ans: A Q.50) Ans: C
information given above?
(a) Coconut Q.20) Ans: C Q.52) Ans: B
(b) Coffee Q.21) Ans: C Q.53) Ans: A
(c) Rubber Q.22) Ans: D Q.54) Ans: B
(d) Mustard Q.23) Ans: C Q.55) Ans: B
Q.27) Ans: D Q.59) Ans: B
Q.31) Ans: D Q.63) Ans: A
35
Infrastructure and Manufacturing
1. Consider the following statements regarding Which of the pairs given above is/are correctly
Coal mining in India: matched?
1. The ownership of a coal mine for captive (a) 1, 2 and 3 only
use has been made illegal in India. (b) 2, 3, and 4 only
2. Companies (both foreign and domestic) (c) 1 and 4 only
registered in India are allowed to (d) 1, 2, 3, and 4
participate in the mining auction.
Which of the statements given above is/are 4. In relation to the MPLADS (Member of
correct? Parliament Local Area Development)
(a) 1 only Scheme, consider the following statements:
(b) 2 only 1. It allows an MP to undertake a project
(c) Both 1 and 2 outside his/her constituency at the time of
(d) Neither 1 nor 2 natural disasters.
2. The scheme provides fund quota for SCs,
2. Consider the following statements: STs, over and above the allocated limit.
1. India has become the largest global energy 3. Nominated MPs are required to choose a
consumer owing to its increasing district from their home state.
population. 4. An MP is allocated Rs. 5 crore per
2. Deen Dayal Gram Jyoti Yojana aims to constituency for a period of 5 years or till
separate the feeder lines for agricultural the time he holds his seat in the
and domestic usage. Parliament.
3. PM Ujjwala Yojana provides free LPG Which of the statements given above is/are
cylinders to the women of BPL households. incorrect?
Which of the statements given above is/are (a) 1, 2, and 3 only
correct? (b) 2, 3, and 4 only
(a) 2 and 3 only (c) 1, 3, and 4 only
(b) 3 only (d) 3 and 4 only
(c) 2 only
(d) 1 and 2 only 5. Consider the following factors:
1. Export of assembled goods to the richer
3. Consider the following pairs: countries.
Committee Related to 2. Surge in protectionist policies among the
1. Sam Pitroda Railways countries.
2. Shekatkar Border Roads 3. Lack of Demographic dividend.
Infrastructure 4. Political instability
3. Anoop Satpathy Minimum Wages 5. Improved transport and communication
committee infrastructure.
4. S. S. Tarapore Capital Account Which of the above factors are likely to act as
committee Convertibility an obstacle for India to be a part of the global
assembly chain for the Networked products?
(a) 1, 2, 3, and 5 only
36
(b) 2, 3, and 4 only operation & maintenance (O&M) is borne

(c) 1, 2, 3, and 4 only by the private sector.
(d) 2 and 4 only 3. Revenue collection would be the
responsibility of the National Highways
6. In relation to the Model Tenancy Act, 2019, Authority of India (NHAI) and private
which of the statements given below is/are developers.
correct? Which of the Statements given above is/are
1. Commercial properties are kept outside Incorrect?
the purview of this Act. (a) 1 and 2 only
2. The highest appeal under the Act lies with (b) 3 only
the High Court of the state where property (c) 2 and 3 only
is registered. (d) None of the above
9. Consider the following statements in context
below:
of TULIP programme:
(a) 1 only
1. It is a program for providing internship
(b) 2 only opportunities to fresh Indian graduates in
(c) Both 1 and 2 all Urban Local Bodies (ULBs) and Smart
(d) Neither 1 nor 2 Cities across the country.
2. It is being implemented through a
7. Consider the following statements regarding partnership between the Ministry of
the National Investment and Infrastructure Housing and Urban Affairs (MoHUA) and
Fund (NIIF): NCERT.
1. It is India’s first sovereign wealth fund that 3. It lays emphasis on the doctrine of
invests in infrastructure and related imparting education by ‘learning by doing’
sectors in India. method.
2. It is registered as a category II alternative Which of the statements given above is/are
investment fund with the Securities and correct?
Exchange Board of India. (a) 1 and 2 only
3. The Indian government has a 75% stake in (b) 1 and 3 only
NIIF with the rest held by foreign and (c) 2 only
domestic investors. (d) All of the above
Which of the statements given above are
correct? 10. Consider the following statements regarding
(a) 1 and 2 only Swiss challenge method:
(b) 2 and 3 only 1. It is a method of bidding, often used in
(c) 1 and 3 only public projects, in which an interested
(d) All of the above party initiates a proposal for a contract or
the bid for a project.
8. Consider the following statements regarding 2. This method can be applied to projects
the Hybrid Annuity Model (HAM): that are taken up on a PPP basis only.
1. It is a mix of the Engineering, Procurement Which of the statements given above is/are
and Construction (EPC) and Build, Operate, Incorrect?
Transfer (BOT) models. (a) 1 only
2. All risks i.e. financial, toll collection and (b) 2 only
37
(c) Both 1 and 2 Living as well as Ease of Doing Business.

(d) Neither 1 nor 2 Which of the statements given above is/are
correct?
11. Consider the following statements in context (a) 3 only
of the National Infrastructure Pipeline (NIP): (b) 1 and 3 only
1. NIP invests in infrastructure projects with (c) 1 and 2 only
the Centre and States to share the capital (d) All of the above
expenditure in a 50:50 formula. 14. Consider the following statements regarding
2. The highest weightage of expenditure in the National Industrial Corridor Programme:
NIP has been given to the road sector. 1. It is a programme in which it is envisaged
3. NIP covers both, economic and social to develop new industrial cities as Smart
infrastructure projects. Cities and to converge the next-generation
Which of the Statements given above is/are technologies in the infrastructure sector.
correct? 2. The implementing agency of NICP is the
(a) 1 only National Highways Authority of India
(b) 3 only under the Ministry of Road Transport and
(c) 2 and 3 only Highways.
3. The main purpose of industrial corridors is
(d) 1 and 2 only
the industrial development and growth,
12. Consider the following statements regarding while that of special economic zones (SEZs)
National Urban Digital Mission (NUDM) : are for the promotion of exports.
1. It aims to build the shared digital Which of the statements given above is/are
infrastructure for improving urban to rural correct?
connectivity. (a) 2 only
(b) 1 and 3 only
2. It has been launched by the Ministry of
(c) 2 and 3 only
Housing and Urban Affairs (MoHUA) along
(d) 1, 2 and 3
with the Ministry of Science & Technology.
the Hybrid Annuity Model:
incorrect?
1. Under this Model, the National Highways
(a) 1 only
Authority of India (NHAI) pays 40% of the
(b) 2 only total project expenditure and the
(c) Both 1 and 2 remaining 60% amount has to be arranged
(d) Neither 1 nor 2 by the road developer.
2. The government bears all the operations
13. Consider the following statements regarding and maintenance (O&M) risks and also the
PM Gati-Shakti National Master Plan: full financial risks
1. It aims to coordinate planning and 3. The cost of projects under the Hybrid
execution of infrastructure projects to Annuity Model is inflation-indexed.
bring down logistics costs and reduce the Which of the statements given above is/ are
turnaround time. correct?
2. This plan will not cover electronic parks, (a) 1 and 2 only
industrial corridors and agri zones. (b) 2 and 3 only
3. It endeavours to build Next Generation (c) 1 and 3 only
Infrastructure which improves Ease of (d) 1, 2 and 3
38
Answer Key
Q.8) Ans: C
39
Industry
1. Consider the following statement regarding

the Industrial sector: Which of the pairs given above is/are correctly
1. Production Linked Incentive Scheme was matched?
launched under the Atmanirbhar Bharat to (a) 1, 2 and 3 only
boost manufacturing in India. (b) 2 and 4 only
2. There has been a constant decline in the (c) 3 and 4 only
contribution of the Industrial sector since (d) 1, 2 and 4 only
2011-2012 in Gross Value Addition.
3. The Index of eight core industries account 4. Which of the statements given below are
for around 40% weightage in the Index of correct regarding the Start-ups in India?
Industrial production. 1. They are less than a decade old entity with
Which of the statements given above is/are a turnover less than 100 crore in any
correct? financial year.
(a) 1 and 2 only 2. They are included in the Priority Sector
(b) 2 and 3 only Lending norms of the RBI.
(c) 1 and 3 only 3. They are eligible for tax holidays for three
(d) 1, 2, and 3 consecutive years before or after 10 years
of their inception.
2. Consider the following reforms regarding Select the correct answer using the codes given
Manufacturing in India: below:
1. Environmentally sustainable growth. (a) 1 and 3 only
2. Increase in Global competitiveness. (b) 2 and 3 only
3. 100 million additional jobs by 2025. (c) 1 and 2 only
4. 10% increase in the share of (d) 1, 2, and 3
Manufacturing in GDP.
Which of the above are enumerated in the 5. In relation to the Production Linked Incentive
Make in India programme of the government? Scheme for electronics, consider the following
(a) 2, 3, and 4 only statements:
(b) 2 and 3 only 1. It is an outcome and growth-based model
(c) 1, 2, 3, and 4 to provide incentives based on
incremental production.
(d) 1 and 3 only
2. It is a WTO compliant scheme and includes
3. Consider the following pairs: incentives for the export and value
1. Industrial Revolution 1.0 Steam Engine addition to the goods.
2. Industrial Revolution 2.0 Gas and Oil
correct?
3. Industrial Revolution 3.0 Combustion
(a) 1 only
Engine
(b) 2 only
4. Industrial Revolution 4.0 Data
(c) Both 1 and 2
(d) Neither 1 nor 2
40
6. Consider the following statements with respect 8. Consider the following statements regarding
to Khadi and Village Industries Commission the District Mineral Foundation (DMF):
(KVIC): 1. It is a trust set up as a non-profit body
1. It is an executive body to plan, promote, under Mines and Minerals (Development
and develop khadi and village industries in & Regulation) Act, 1957, in those districts
rural areas. affected by the mining works.
2. It is an apex organization under the 2. Its manner of operation comes under the
Ministry of Rural Development. jurisdiction of the Ministry of
Environment, Forest and Climate Change
3. It plays an essential role in imparting
(MoEFCC).
industrial level skills to Indian youth
through Pradhan Mantri Employment 3. The funds generated by DMF are utilized
Generation Program (PMEGP). through Pradhan Mantri Khanij Kshetra
Which of the statements given above is/are Kalyan Yojana (PMKKKY).
incorrect? Which of the Statements given above is/are
correct?
(a) 1 and 3 only
(a) 1 and 2 only
(b) 1 and 2 only
(b) 2 only
(c) 2 and 3 only (c) 3 only
(d) 1, 2 and 3 only (d) All of the above
7. Which of the following statements is/are 9. Consider the following statements in context
incorrect regarding Micro Unit development of Minerals Security Partnership (MSP):
and refinance agency (MUDRA)? 1. It is an India-led partnership initiative that
1. It provides loans at low interest rates to aims to bolster critical mineral supply
micro financial institutions and NBFCs for chains.
farming and small industries. 2. The alliance is seen as primarily focused on
2. It has been formed as a wholly owned evolving an alternative to China, which has
subsidiary of NABARD. created a processing infrastructure in rare
3. Shishu, Tarun, and Kishor are the earth minerals.
subcategories of loan in the increasing Which of the statements given above is/are
order of limit for the loan disbursal. correct?
Select the incorrect answer using the codes (a) 1 only
given below: (b) 2 only
(a) 1 and 3 only (c) Both 1 and 2
(d) Neither 1 nor 2
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1,2 and 3 only
41
10. Consider the following statements regarding 12. Consider the following statements regarding
the micro, small and medium enterprises the PM Mega Integrated Textile Region and
(MSMEs): Apparel (PM MITRA) Park scheme:
1. They contribute to 50% of the country’s 1. 10 Mega Integrated Textile Region and
GDP and about 70% of overall exports. Apparel (PM MITRA) parks will be set up in
2. Portal “Champions” was launched to cover a Public-Private Partnership (PPP) Mode by
many aspects of e-governance including a Special Purpose Vehicle (SPV), which will
grievance redressal and handholding of be owned by the central government.
MSMEs. 2. The parks will be set up only at the
3. Wholesale and Retail trades are included in Greenfield sites located in different states.
MSMEs and will be eligible for finance 3. PM MITRA Parks will attract cutting age
under priority sectors classified by the technology and boost FDI and local
Reserve Bank of India (RBI). investment in the textiles sector.
Which of the Statements given above is/are Which of the Statements given above is/are
correct? correct?
(a) 1 and 2 only (a) 1 and 2 only
(c) 1 and 3 only (c) 2 and 3 only
(d) All of the above (d) None of the above
the Indian textile industry: Mission Purvodaya:
1. India is the largest producer of Man-made 1. It is aimed at the accelerated development
fibres (MMF) in the world. of eastern and north eastern India through
2. The Textile industry is a capital-intensive the establishment of an integrated iron
sector that employs the highest number of and coal hub.
people in India. 2. It is launched by the Ministry of Coal in
3. There is 100% FDI (automatic route) in the partnership with the Government of
textile and apparel sector in India. Germany.
Which of the Statements given above is/are Which of the statements given above is/are
incorrect? correct?
(b) 3 only (b) 2 only
(d) None of the above (d) Neither 1 nor 2
42
14. Consider the following statements regarding Adviser (OEA) with the base year 2011-12.
Micro Small and Medium Enterprises: Which of the statements given above are
1. The existing criterion of definition of correct?
MSMEs is based on the Micro Small and (a) 1 and 3 only
Medium Enterprises development act, (b) 2 and 3 only
2006 and it is different for manufacturing (c) 1 and 2 only
and services units. (d) All of the above
2. A micro enterprise is an enterprise where
the investment in plant and machinery or 17. Consider the following statements regarding
equipment does not exceed ₹1 crore and Annual Survey of Industries (ASI):
turnover does not exceed ₹5 crore 1. It is the principal source of industrial
3. The National Board for Micro, Small and statistics in India with the objective of
Medium Enterprises (NBMSME) was estimating the contribution of registered
established by the Government without manufacturing industries.
any statutory backing 2. ASI is computed and published by the
Which of the statements given above is/ are Central Statistical Organisation (CSO) on a
incorrect? monthly basis.
(b) 2 and 3 only correct?
(d) 1, 2 and 3 (b) 2 only
(c) Both 1 and 2
15. Under the Design Linked Incentive Scheme, (d) Neither 1 nor 2
financial incentives and design infrastructure
support will be extended to domestic 18. Which of the following statements are correct
companies, startups and MSMEs. The about Production Linked Incentive Scheme
incentives will be provided across various for Food Processing Industry (PLISFPI):
stages of development and deployment of 1. One of the objectives of the scheme is to
which of the following Industries? support creation of global food
(a) Textile industry manufacturing champions
(b) Semiconductor chips 2. Apart from inviting foreign companies to
(c) Defence manufacturing set shop in India, the scheme also aims to
(d) Advanced chemical cells encourage local companies to set up or
expand existing manufacturing units.
16. Consider the following statements regarding 3. It is centrally sponsored scheme launched
the Index of Eight Core Industries (ICI): by Ministry of Food Processing Industries
1. It is a production volume index that Select the correct answer from the codes given
measures the individual as well as the below:
collective production performance of eight (a) 1 and 2 only
core industries. (b) 1 and 3 only
2. The eight-core industries have a total (c) 2 and 3 only
weight of nearly 50 percent in the Index of (d) All of the above
Industrial Production.
3. The compilation and releasing of the index
are done by the Office of the Economic
43
19. About Agristack, which of the following

statements are correct? Answer Key
1. AgriStack will create a unified platform for Q.1) Ans: D Q.11) Ans: A
farmers to provide them end to end Q.2) Ans: C Q.12) Ans: B
services across the agriculture food value
chain. Q.5) Ans: D Q.15) Ans: B
2. Under the programme, each farmer will Q.6) Ans: D Q.16) Ans: A
have a unique digital identification Q.7) Ans: D Q.17) Ans: A
3. Access to formal credit, Improved crop Q.8) Ans: C Q.18) Ans: A
insurance products, Smooth mechanism Q.9) Ans: B Q.19) Ans: D
for marketing and price discovery are Q.10) Ans: B Q.20) Ans: A
some of the benefits of Agristack.
below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only

the Remission of Duties and Taxes on
Exported Products (RoDTEP) scheme:
1. The scheme would refund exporters
central and state duties but not the local
taxes.
2. It is a replacement for the Merchandise
Export from India Scheme (MEIS), which
was not compliant with the rules of the
World Trade Organisation.
3. For Electronics exporters, the Rebate of
State and Central Levies and Taxes
(RoSCTL) Scheme has been notified
separately.
Which of the statements given above is/ are
correct?
(a) 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
44
Services Sector
Which of the above statement/s is/are
1. With reference to service sector in India, correct?
Consider the following statements: (a) 1 only
1. The share of Services in GVA has been (b) 2 only
steadily rising for the last 5 years. (c) Both 1 and 2
2. Software exports comprise nearly half of (d) Neither 1 nor 2
total services exports from India.
Which of the statements given above is/are 4. Consider the following statements about
incorrect? Regulatory forbearance in India?
1. It allows banks to relax norms for
(a) 1 only
restructuring assets.
(b) 2 only
2. It was first adopted after LPG reform in
(c) Both 1 and 2 Indian economy and was also adopted
(d) Neither 1 nor 2 after the Global financial crisis.
Which of the above statement/s is/are
2. Which of the following statements are correct?
incorrect regarding Consumer Protection Act, (a) 1 only
2019? (b) 2 only
1. A consumer is defined as a person who (c) Both 1 and 2
buys the goods for personal consumption (d) Neither 1 nor 2
or resale.
2. The district consumer dispute redressal 5. With reference to Indian economy, consider
commission will have jurisdiction of cases the following statements:
up to rupees 1 crore. 1. Primary sector comprises more than half of
3. Complaints must be filed in a consumer the employed workforce of the Indian
court where the seller's office is located. economy.
Select the answer using the code given below: 2. Contraction has been witnessed in the
(a) 1 and 2 only service, industries and Agriculture sector in
(b) 2 only financial year 2020-2021 in the backdrop
(c) 1 and 3 only of pandemic.
(d) All of the above. Which of the statements given above is/are
incorrect?
3. Consider the following statements about (a) 1 only
Indian economy: (b) 2 only
1. Share of Corporation tax is more than the (c) Both 1 and 2
share of Income Tax in Direct tax collected. (d) Neither 1 nor 2
2. Average monthly gross GST collections
have constantly increased since 2018.
45
6. Consider the following statements as per the Select the answer from the code given below:
amendments to the Consumer Protection (E- (a) 1 and 3 only
commerce) Rules, 2020: (b) 3 only
1. Flash sales have been promoted in the (c) 1 and 2 only
amended rules to benefit the consumers. (d) 1 only
2. Every e-commerce firm is required to
register with the Department of Consumer 9. The Service Trade Restriction Index is
affairs. published by the
3. E-commerce firms can be held liable in (a) International Monetary Fund
case a seller on their platform fails to (b) World Economic Forum
deliver goods or services in timely manner (c) Organisation for Economic Cooperation
Which of the above statement/s is/are and Development
incorrect? (d) United Nations Conference on Trade and
(a) 3 only Development
(b) 1 and 2 only
(c) 1 and 3 only 10. Consider the following statements about
(d) 2 and 3 only Universal services obligation fund (USOF):
1. It is a Statutory fund under Information
7. Consider the following statements about Technology Act,2000.
intellectual property appellate board: 2. Now, USOF works through the lottery
1. It is a statutory body tablet under the process.
provisions of Geographical Indications of 3. It has been adopted to sustain the telecom
Goods (Registration and Protection) Act, services in rural areas
1999. Which of the above statements are correct?
2. It falls under the administrative control of (a) 1 and 3 only
the Ministry of Commerce. (b) 2 and 3 only
3. It strengthens the IPR resume influencing (c) 3 only
the inflows of foreign direct investment (d) 1, 2 and 3
and trade in the country
11. Five Star Village Scheme is related to
Select the Correct statements from the code
(a) To rate villages according to their
given below
performance in Covid 19 vaccination drive
(a) 1 and 2 only
(b) Supplementation of ODF and ODf++ in
(b) 2 and 3 only
villages
(c) 1 and 3 only
(c) For extending postal schemes in rural
(d) 1,2 and 3
areas
(d) To augment Digital literacy in rural adults
8. Which of the following are part of transfer
payments?
1. Remittances received by people residing in
India
2. Imported Petro-Chemical products.
3. Grants from multilateral institutions.
46
12. With reference to ‘Software Technology 14. Consider the following statements regarding
parks in India,’ Consider the following Service Export from India Scheme:
statements: 1. Only notified services, located in India are
1. It was established after the Start Up India eligible for the Service Exports from India
Scheme to boost software exports from Scheme.
India. 2. Duty credit scrip is an important
2. It is an autonomous society under the component of the scheme that can be used
Ministry of Electronics and Information for the payment of custom duties, excise
Technology. duties, GST on procurement of services,
Select the incorrect statements from the code custom duty etc.
given below: 3. Foreign exchange earnings such as equity
(a) 1 only or debt participation, donations, receipts
(b) 2 only of repayment of loans etc are counted as
(c) Both 1 and 2 entitlement under the scheme.
(d) Neither 1 nor 2 Which of the statements given above is/ are
correct?
13. Consider the following statements regarding (a) 1 only
Commercial service exports of India: (b) 2 and 3 only
1. Commercial service exports are total (c) 3 only
service exports including exports of (d) 1 and 2 only
government services not included
elsewhere. 15. Consider the following statements regarding
2. India’s share of commercial service exports the Special purpose acquisition companies:
are higher with respect to merchandise 1. SPACs are listed shell companies created
exports in global exports during 2015- with sole purpose to acquire unlisted or
2020. private companies and then merge with
3. In the last two decades the Indian services the latter.
sector was the largest recipient of FDI 2. At the time of their Initial public offerings,
inflows. SPACs have thriving successful business
Which of the statements given above is/are operations and stated targets for
correct? acquisition.
(a) 1 and 2 only Which of the statements given above is/ are
(c) 3 only (a) 1 only
(d) 1, 2 and 3 (b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
47
16. What do you mean by the term “‘Social 18. What do you mean by the term “Antitrust”
commerce” with reference to the Indian with reference to Indian Economy:
economy? (a) It refers to a field of economic policy and
(a) The process of selling products and laws dealing with monopoly and
services directly through social media monopolistic practices.
(b) The networks of relationships among (b) An asset such as securities, cash and
people who live and work in a particular property that are managed by a trustee for
society, enabling that society to function the benefit of designated individuals.
effectively (c) A financial instrument that is expected to
(c) It is a policy of minimum governmental retain, or even gain value during periods of
interference in the economic affairs of economic downturn.
individuals and society. (d) It is a kind of injuring pricing, especially in
(d) The economic organisations traditionally the context of international trade.
refer to the set of associations,
cooperatives, mutual organisations, and 19. Consider the following statements regarding
foundations whose activity is driven by Tele-Density in India:
values of solidarity 1. Tele-Density explains the number of
telephone/mobile communication
17. Consider the following statements regarding connections that exist for every 1000
Indian Telecom Sector: inhabitants of a city.
1. It is the largest telecom sector of the world 2. PM-WANI and BharatNet aims to increase
with- tele-density of 86.89% Tele-Density in India.
2. Adjusted Gross Revenue (AGR) is the 3. In the last decade i.e from 2006 to 2020,
revenue amount used to calculate the India's Tele-Density has increased from
license fee and spectrum charges required overall 12% to 86%.
to be paid by Telecom Service Providers on Which of the statements given above is/ are
their revenue. correct?
Which of the statements given above is /are (a) 1 and 2 only
correct? (b) 2 only
(b) 2 only (d) 1, 2 and 3
(c) Both 1 and 2
(d) Neither 1 nor 2 20. What does the term “ Seed fund” mean in the
Indian economy?
(a) Investor invests capital in a startup
company in exchange for an equity stake
or convertible note stake in the company.
(b) Funds provided to industries at times of
incurring losses.
(c) Funds provided for replacement and
renovation of industries.
(d) A short-term capital provided to directly
aid startups with bio technology-based
innovations.
48
21. Consider the following statements regarding 23. Which one of the following best describes the
E- commerce sector in India: term Asset Monetisation?
1. Inventory model of e-commerce means a (a) The public sector companies selling off
providing of an information technology parts of the equity of PSEs to the public
platform by an e-commerce entity on a (b) The offering of public infrastructure to the
digital and electronic network to act as a private sector or institutional investors
facilitator between buyer and seller. through structured vehicles and
2. Marketplace model of e-commerce means mechanisms.
an ecommerce activity where stocks of (c) The process of converting business from
goods and services is owned by e- the public sector to the private sector.
commerce entity and is sold to the (d) The sale of a portion of the Government
consumers directly shareholding of a public sector enterprise
Which of the statements given above is/ are (CPSE) of upto 50%, along with transfer of
correct? management control.
(a) 1 only
(b) 2 only 24. Consider the following statements regarding
(c) Both 1 and 2 the insurance sector:
(d) Neither 1 nor 2 1. Domestic Systemically Important Insurers
(D-SIIs) are identified on an annual basis by
22. Consider the following statements regarding Reserve Bank of India.
Foreign Direct Investment: 2. D-SIIs whose distress or failure would
1. Foreign Portfolio Investment is where the cause a significant dislocation in the
foreign entity buys stocks and bonds of a domestic financial system, are not
company and provides the investor with subjected to any additional regulatory
control over the business. measures.
2. The Foreign Investment Facilitation Portal 3. Two of the Parameters for identification of
(FIFP) which facilitates the single window D-SIIs are Size of operations in terms of
clearance of applications which are total revenue and Global activities across
through approval route is administered by more than one jurisdiction.
the Ministry of Finance. Which of the statements given above is / are
Which of the statements given above is/ are incorrect?
correct? (a) 1 and 2 only
(c) Both 1 and 2 (d) 1, 2 and 3
(d) Neither 1 nor 2
Purchasing Managers Index (PMI) :
1. PMI is a private sector survey released at
the start of every month and is calculated
separately for the manufacturing and
services sectors and then a composite
index is constructed.
2. A score above 50 denotes contraction
49
while one below 50 signifies expansion. 28. What are the benefits of Direct Benefit
Which of the statements given above is/are Transfer (DBT) in an economy:
correct? 1. Promotes accountability in subsidy
(a) 1 only distribution
(b) 2 only 2. Increases pilferage in the distribution of
(c) Both 1 and 2 money and reduces the misuse of public
(d) Neither 1 nor 2 funds
3. Increasing transparency through
26. Consider the following statements regarding eliminating ghost beneficiaries
the Revamped Distribution Sector Scheme 4. Save time and cost by increasing
(RDSS) for Discoms: intermediaries
1. It was launched to specifically overcome Which of the options given above is/are
the operational deficiencies and financial Incorrect?
constraints of the state owned discoms (a) 3 only
and Private Sector Discoms. (b) 2 and 4 only
2. It is an umbrella programme merging all (c) 1, 2 and 4 only
the existing power sector reforms schemes (d) 1 and 3 only
to increase efficiency.
3. Power Finance Corporation is the sole 29. Which of the following statements is/are
nodal agency for the implementation of correct with respect to Masala Bonds?
this programme. 1. Masala Bonds are foreign currency-
Which of the Statements given above is/are denominated bonds issued inside India by
correct? foreign entities to raise money in foreign
(a) 1 only currency from local investors.
(b) 2 only 2. The first Masala bond was issued in 2014
(c) 1 and 3 only by International Finance Corporation (IFC)
(d) All of the above for the infrastructure projects in India.
3. These bonds can only be issued to a
27. Consider the following statements regarding resident of such a country which is a
Chip to Start-up (C2S) Programme: member of the Financial Action Task Force
1. Under this programme, the central (FATF).
government aims to train engineers in Select the correct answer using the codes given
very-large-scale integration (VLSI) and below:
embedded system design areas. (a) 1 and 2 only
2. The nodal agency for implementation of (b) 3 only
C2S programme is National Informatics (c) 2 and 3 only
Centre (NIC) under Ministry of Electronics (d) 1, 2 and 3
and Information Technology.
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
50
30. Which of the following statement is/are

Incorrect with respect to the Crowding-Out 32. Consider the following statements regarding
Effect? Invest India:
(a) It refers to a situation of high government 1. Invest India was formed in 2009 under
expenditure supported by high borrowing Section 25 of the Companies Act 1956 for
causing a decrease in private expenditure. promotion of foreign investment to build
(b) It refers to a situation when an increase in capacity as well as bring in global best
government spending/investment leads to practices in investment targeting,
an expansion of economic activity (real promotion and facilitation areas.
GDP) which in turn incentivises private 2. The current shareholding pattern of Invest
sector firms to raise their own levels of India is 51% of Industry Associations and
capital investment and employment. the remaining 49% of Private sector.
(c) A high magnitude of the crowding-out 3. Invest India shall also be a facilitator and
effect may even lead to lesser income in partner offering hand holding services to
the economy. the investors to keep them to speedily
(d) Increased interest rate and reduced fructify their investment plans.
availability of funds increases crowding out Which of the statements given above is /are
effect. correct?
(a) 1 and 2 only
31. Consider the following statements regarding (b) 2 and 3 only
Green Fins Hub : (c) 1 and 3 only
1. The United Nations Environmental (d) 1, 2 and 3
Programme (UNEP), along with UK-based
charity Reef-World Foundation has 33. Consider the following statements regarding
launched the Green Fins Hub. Scheme for the Promotion of Bulk Drug Parks:
2. Green Fins is a conservation management 1. It aims to develop 7 mega Bulk Drug parks
strategy that offers the only in India with Grants-in-Aid of maximum Rs.
environmental criteria for maritime 7000 Crore per Bulk Drug Park.
tourism that are internationally 2. The scheme will be implemented by the
recognised. Department of Pharmaceuticals, ministry
Which of the statements given above is/are of chemical fertilizers.
incorrect? 3. The facilities provided under this scheme
(a) 1 only will bring down the manufacturing cost of
the bulk drugs and will promote self-
(b) 2 only
reliance in pharmaceutical manufacturing.
(c) Both 1 and 2
(d) Neither 1 nor 2 correct?
(a) 1 and 2 only
(b) 3 only
(c) 2 and 3 only
(d) 1 and 3 only
51

Market Based Economic Despatch (MBED)
mechanism:
1. It proposes a decentralised scheduling of
Answer Key
power dispatches, both inter-state and
intra-state. Q.2) Ans: D Q.19) Ans: C
2. Power is in the Concurrent List of the Q.3) Ans: A Q.20) Ans: A
Constitution. Q.4) Ans: A Q.21) Ans: D
3. It is a way forward to deepen power Q.5) Ans: C Q.22) Ans: D
markets in line with the Centre’s ‘One Q.6) Ans: B Q.23) Ans: B
Nation, One Grid, One Frequency, One Q.7) Ans: B Q.24) Ans: A
Price’ formula.
Which of the statements given above is/are Q.10) Ans: C Q.27) Ans: A
correct? Q.11) Ans: C Q.28) Ans: B
(a) 2 only Q.12) Ans: A Q.29) Ans: C
(b) 1 and 2 only Q.13) Ans: B Q.30) Ans: B
(c) 1 and 3 only Q.14) Ans: D Q.31) Ans: D
(d) 2 and 3 only
52
Banking in India
1. Bond prices in the market decrease when the

banks offer higher interest rates because- 4. If the Government of India suddenly decides to
(a) It shows loss of trust in the economy, demonetize certain currency notes and
hence people start removing their money replace it with the new ones, which of the
from bond markets following things are likely to happen as a
(b) Yield curve in the long run fluctuates consequence of this sudden demonetization?
because of the volatility induced due to 1. Aggregate Demand shock
higher interest rates 2. Aggregate supply shock
(c) It would give comparatively lesser returns 3. Fall in market interest rates
than what can be earned through bank 4. Liquidity crunch
rates 5. Increase in RBI’s liability
(d) It would reduce the coupon rate on the Select the correct answer by using the codes
bond which results in declining returns given below:
(a) 1, 4 and 5 only
2. Consider the following financial instruments: (b) 2, 4 and 5 only
1. Cash management bills (c) 1, 2, 3 and 4 only
2. Sovereign gold bonds (d) 1, 2, 4 and 5 only
3. Collateralized borrowing and lending
obligations 5. As per the Monetary Policy Framework
4. Certificate of deposits Agreement signed between the Government
5. Commercial papers of India and the Reserve bank of India in 2015,
Which of the following are traded in the what is the primary objective of the monetary
Money Market? policy?
(a) 1, 2, 5 only (a) Regulating the creation and supply of
(b) 1, 3, 4, 5 only money in the economy
(c) 1, 4, 5 only (b) Maintain the repo rate, cash reserve ratio
(d) 1, 2, 4, 5 only and statutory liquidity ratio for inflation
targeting
3. Consider the following, in context of mediums (c) Maintaining adequate foreign exchange
of exchange used in India: reserves which can be beneficial in the
1. Bitcoins times of economic crisis
2. Cheques (d) Maintaining price stability, while keeping
3. Demand draft the objective of growth in mind
4. Coins
5. Notes
Which of the following can be considered as
fiat money?
(a) 2, 3, 4,5 only
(b) 1, 4, 5 only
(c) 2, 4, 5 only
(d) 4 and 5 only
53
6. Which of the given statements best describes 8. The terms ‘Dovish’ and ‘Hawkish’ are often
the difference between the Repo Rate and the seen in news in the context of:
Marginal Standing Facility? (a) To describe the monetary policy stances
(a) Repo rate operations are carried out in (b) To denote stages of the spread of disease
primary market whereas the operations in a pandemic
related to the Marginal standing facility are (c) To describe the growth phases in the Stock
carried out in the secondary markets market
(b) SLR securities (Statutory Liquidity Ratio) (d) To denotes the phases of business cycle
cannot be used for availing loans at the
repo rate while they can be used for 9. The Reserve Bank of India regulates the public
availing loans under the Marginal Standing sector banks (PSBs) in matters of
Facility 1. Revoking the Banking license
(c) Repo rate loans are overnight loans while 2. Merger of banks
the loans under the Marginal standing 3. Winding-up of banks
facility are available for 14 days Select the correct answer using the codes given
(d) Repo rate facility can be increased above below:
its limit under exceptional circumstances, (a) 1 only
marginal standing facility cannot be (b) 2 and 3 only
increased above its prescribed limit (c) 2 only
7. With reference to various reserve ratios of RBI,
consider the following statements: 10. With reference to the banking system in India,
1. Cash Reserve Ratio is to be maintained on a Bank Run can be said to have occurred in
a daily basis whereas the Statutory which of the following circumstances?
Liquidity ratio is to be maintained on a (a) When a particular bank has made no
fortnightly basis. profits for 12 consecutive months
2. The Cash Reserve Ratio is to be maintained (b) When a bank has gone bankrupt or has
as per the Banking Regulation Act, 1949 become an insolvent and cannot lend new
whereas the Statutory Liquidity Ratio is to loans anymore
be maintained as per the Reserve Bank of (c) When the non-performing assets of a bank
India Act, 1934. constitute more than 50% of its loans
3. The Reserve Bank of India can decide CRR (d) When the depositors withdraw their
without any floor or ceiling rate as per the money simultaneously fearing the bank’s
situational demands of the economy inability to return the money
Select the incorrect statements by using the
codes given below: 11. In context of the payments ecosystem in
(a) 1 and 3 only India, consider the following statements:
(b) 1 and 2 only 1. Only payment systems authorized by the
(c) 3 only RBI can be operated in the country
(d) 1, 2 and 3 2. National Payments Corporation of India is
a wholly owned subsidiary of RBI
3. Only Banking entities are allowed as the
payment systems operators in India
54
Select the incorrect statements using the 14. The Reserve Bank has specified certain
codes given below: regulatory trigger points, as a part of prompt
(a) 1 only corrective action (PCA) Framework. Which of
(b) 2 and 3 only the following are included as parameters for
(c) 1 and 3 only introducing a Prompt Corrective Action
(d) 1, 2 and 3 Framework in a particular bank?
1. Capital to risk weighted assets ratio
12. In the context of banking in India, which of 2. Debt Service Obligation
the following agricultural and allied 3. Net non-performing assets
activities can be granted loans under the 4. Return on Assets
scheme of Priority Sector Lending? Select the correct answer using the codes given
1. Setting up Compressed Biogas Plant below:
2. Installation of solar plants (a) 1, 2, 3 only
3. Agricultural Machinery (b) 2, 3, 4 only
4. Loans to Farmer Producing Organizations (c) 1, 2, 4 only
5. Food Processing (d) 1, 3, 4 only
below: 15. In the context of Foreign investment, consider
(a) 1, 3 and 4 only the following financial instruments:
(b) 3, 4 and 5 only 1. External Commercial Borrowings
(c) 1, 2, 3 and 4 only 2. Masala Bonds
(d) 1, 2, 3, 4 and 5 3. American Depository Receipts
4. Indian Depository Receipts
13. In context of the Priority Sector Lending in Which of the following financial instrument(s)
India, consider the following statements: can be used for raising money from abroad?
1. Priority sector guidelines give preferential (a) 1 only
rate of interest for priority sector loans (b) 1 and 2 only
2. As per recent RBI’s norms, incremental (c) 1, 2 and 3 only
priority sector credit will be given to the (d) 1, 2 and 4 only
identified districts to address the regional
disparities in the flow of credit on a district 16. In context of the currency swap agreements,
level consider the following statements:
3. The districts for incremental credit flow 1. Currency swap agreements carry zero
will be identified using the aspirational exchange rate or other market risks
district criteria 2. Currency swap agreements can also be
Select the incorrect statements using the used as an out of market transaction to
codes given below: stop the depreciation of Rupee
(b) 1 and 3 only incorrect?
(d) None of the above (b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
55
17. With reference to the Indian economy, 20. The basic aim of Government Securities
consider the following: Acquisition Programme (G-SAP) is that
1. Long Term Repo Auctions (a) To make the government securities market
2. KYC Norms stable
3. Currency Swap (b) To bridge the fiscal and monetary deficit
4. Capital Adequacy Norms (c) To increase the availability of money to
Which of the above can be considered as the boost the business sector
steps taken to achieve effective Monetary (d) To reduce the general interest rate in the
Policy Transmission by the Reserve Bank of economy
India?
Select the correct answer using the codes given 21. When RBI increases the sale of government
below: securities through open market operations,
(a) 1 only which of the following is most likely to
(b) 1 and 4 only happen?
(c) 1 and 3 only (a) Central bank is adopting accommodative
(d) 1, 2 and 4 only monetary policy stance
(b) Market interest rates are likely to fall
18. When the Reserve Bank of India increases the (c) Central is following a contractionary
Cash Reserve Ratio by 50 basis points, which monetary policy
of the following is likely to happen? (d) Rise in Inflation in the economy
(a) Money in circulation falls drastically
(b) The non-performing assets of the banks 22. Which of the following event(s) is/are most
will reduce likely to happen as a consequence(s) of a
(c) Scheduled Commercial Banks may cut their liquidity trap in the economy?
lending rates 1. People keep their funds in fixed and
(d) It will reduce the amount of money demand deposits instead of investing in
available for banks to lend bonds and other financial instruments
2. The Central banks will start to increase the
19. Which of the following terms indicates a repo rates to make the money market
mechanism used by the Reserve Bank of India more liquid
for absorbing excess liquidity from the Select the correct answer using the codes given
market? below:
(a) Marginal Standing Facility (a) 1 only
(b) Open Market Operations (b) 2 only
(c) Operation Twist (c) Both 1 and 2
(d) Market Stabilization Scheme (d) Neither 1 nor 2
56
23. Consider the following statements regarding 25. Which of the following is a liquidity
the Scheduled Banks: management instrument used by the RBI, to
1. Every bank listed in the schedule II of RBI absorb liquidity (deposit) from Scheduled
act is a Scheduled Bank and in order to Commercial banks (SCBs) without any
enter the category, a bank should hold a collateral/government securities in return?
minimum paid-up capital of Rs 500 crore (a) Repo
2. Those banks that are not listed in Schedule (b) Reverse Repo
II of the RBI act are not eligible to receive (c) Standing Deposit Facility
loans from RBI for normal banking (d) Marginal Standing Facility
purposes.
3. Unlike Scheduled banks, the Non- 26. Consider the following statements regarding
scheduled banks are not required to meet External Benchmark Based Interest Rate:
the cash reserve requirement. 1. An external benchmark is defined as a
Which of the statements given above is /are reference rate set by each bank for
correct? determining the interest rate of loans.
(a) 2 and 3 only 2. Banks can choose one of the four external
(b) 2 only benchmarks repo rate, three-month
(c) 1 and 3 only treasury bill yield, six-month treasury bill
(d) 1, 2 and 3 yield or any other benchmark interest rate
published by Financial Benchmarks India
24. Consider the following statements regarding Pvt Ltd.
the Cooperative Banks: 3. The interest rate must be changed at least
1. The term Urban Co-operative Banks once every three months in accordance
(UCBs), refers to primary cooperative with the external benchmark.
banks located in urban and semi-urban Which of the statements given above is/ are
areas that are allowed to lend money only incorrect?
for non-agricultural purposes. (a) 1 only
2. Cooperative banks registered under the (b) 2 and 3 only
States Cooperative Societies Act also come (c) 1 and 3 only
under the regulatory ambit of the Reserve (d) 1, 2 and 3
Bank of India (RBI) under the Banking
Regulations Act, 1949, and the Banking
Laws (Co-operative Societies) Act, 1955.
incorrect?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
57
27. What do you mean by the term “liquidity Which of the statements given above is /are
coverage ratio (LCR)” with reference to correct?
Indian Banking sector: (a) 2 only
(a) The proportion of highly liquid assets held (b) 2 and 3 only
by financial institutions, to ensure their (c) 1 only
ongoing ability to meet short-term (d) 1, 2 and 3
obligations.
(b) The requirements of banks to maintain a 30. Consider the following statements regarding
stable funding profile in relation to their Asset Reconstruction Companies (ARCs):
off-balance-sheet assets and activities. 1. It is a specialized financial institution that
(c) The proportion of highly liquid assets held buys the Non-Performing Assets (NPAs)
by financial institutions, to ensure their from banks and financial institutions so
ongoing ability to meet long-term that they can clean up their balance
obligations. sheets.
(d) A measure of how much capital a bank has 2. The Banking Regulation Act, 1949 provides
available, reported as a percentage of a the legal basis for the setting up of ARCs in
bank's risk-weighted credit exposures India
3. The ARCs have to maintain a capital
28. If the RBI decides to adopt a Tight Monetary adequacy ratio of 15% of its risk weighted
Policy/Contractionary monetary policy, assets.
which of the following would it do? Which of the statements given above is /are
1. Increase the short-term interest rate incorrect?
2. Lower the reserve requirements (a) 1 and 3 only
3. Expand open market operation (b) 2 only
Select the correct answer using the code given (c) 3 only
below: (d) 1, 2 and 3
(a) 1 and 2 only
(b) 2 and 3 only 31. Consider the following statements regarding
(c) 1 and 3 only Cash Reserve Ratio (CRR):
(d) 1, 2 and 3 1. CRR is governed by the provisions of the
Reserve Bank of India Act, 1934.
29. Consider the following statements regarding 2. Banks get regular interest on the money
Non-Banking Financial Companies (NBFCs) : that is with the RBI under the CRR
1. NBFCs are registered under the Companies requirements.
Act, 1956. 3. At the time of high inflation in the
2. Like banks, NBFCs also form part of the economy, RBI reduces the Cash Reserve
payment and settlement system and can Ratio, which helps in keeping inflation
issue cheques drawn on itself. under control.
3. Merchant Banker, Venture Capital Fund Which of the statements given above is /are
Company, stock-exchanges, stock brokers, correct?
and sub-brokers are regulated by the RBI. (a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
58
Statutory Liquidity Ratio: Securitisation and Reconstruction of
1. Statutory Liquidity Ratio (SLR) is the Financial Assets and Enforcement of Security
minimum percentage of deposits i.e. Net Interest Act of 2002, or SARFAESI Act :
Demand and Time Liabilities (NDTL) that a 1. It permits banks and other financial
commercial bank must keep with RBI. institutions to recover loans by auctioning
2. A bank is liable to pay a penalty to the off the defaulter's residential or
Reserve Bank of India if it fails to maintain commercial assets.
the prescribed SLR. 2. Unsecured loans, loans under ₹100,000,
Which of the statements given above is/ are and debts that are less than 20% of the
correct? original principle are exempt from the
(a) 1 only statute.
(b) 2 only 3. The Central Government passed a law in
(c) Both 1 and 2 2013 exempting cooperative banks from
(d) Neither 1 nor 2 the purview of SARFAESI Act of 2002.
33. Consider the following statements regarding correct?
Insolvency and Bankruptcy Code (IBC): (a) 1 and 2 only
1. The IBC provides for a time-bound process (b) 2 and 3 only
to resolve insolvency in which the (c) 1 and 3 only
companies have to complete the entire (d) 1, 2 and 3
insolvency exercise within 180 days and
the deadline cannot be extended in any 35. Consider the following statements regarding
case National Bank for Financing Infrastructure
and Development (NBFID):
2. The IBC sets out that operational creditors
1. Initially, the central government will own
cannot trigger the corporate insolvency
100% shares of the NBFID which may
resolution process (CIRP)
subsequently be reduced up to 26%.
2. NaBFID will be regulated and supervised as
correct?
an All India Financial Institution (AIFI)
(a) 1 only
under the Companies Act, 1956.
(b) 2 only
3. No investigation can be initiated against
(c) Both 1 and 2
employees of NBFID, without the prior
(d) Neither 1 nor 2
sanction of the central government in case
of the chairperson or other directors.
correct?
(a) 1 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
59
36. Which of the following statements about 38. Which of the following statements are
Targeted Long-Term Repo Operations are correct about Central Bank Digital Currency
correct? (CBDC)?
1. They are conducted by the RBI to ensure 1. It enables timely transmission of monetary
adequate liquidity for a short period for policy
the entire economy. 2. It can be a safer Substitute of bank deposit
2. The TLTROs are exempted from regulatory 3. In distress situation it helps to reduce Bank
requirement of the cash reserve ratio for Runs
the equivalent of incremental credit 4. It can increase deposit and retail lending
disbursed by banks as loans. rates.
3. Under TLTROs, the RBI auctions funds to 5. It is safer than present existing payment
commercial banks up to a certain amount structure
based on the repo rate. Choose the correct option using the code given
Select the correct answer from the codes given below:
below: (a) 1, 2, and 3 only
(a) 1 and 2 only (b) 1, 2, 4 and 5 only
(b) 2 and 3 only (c) 1, 3, 4 and 5 only
(c) 1 and 3 only (d) 1, 2, and 5 only
37. Consider the following statements regarding National Electronic Funds Transfer (NEFT) vs
Capital Adequacy Ratio (CAR): Real-Time Gross Settlement (RTGS):
1. Capital Adequacy Ratio is calculated by 1. The NEFT mode is usually used when the
summing a bank’s tier 1 capital and tier 2 transactions are of smaller values while
capitals and dividing the total by its total RTGS is used in high-value transactions.
risk-weighted assets. 2. The RTGS method does not have a
2. Tier 2 capital, also called core capital, minimum transfer limit ceiling over the
consists of ordinary share capital, equity amount.
capital, audited revenue reserves, and 3. In NEFT, the settlement of funds happens
intangible assets. in real time, means they are processed as
Which of the statements given above is /are they are made
correct? Which of the statements given above is/ are
(a) 1 only incorrect?
(d) 1, 2 and 3
60
Money Multiplier: Payments Bank:
1. Money multiplier is the maximum limit to 1. Payments Banks are registered as a public
which money supply can be affected by limited company under the Companies Act
bringing about changes in the amount of of 2013, and licenced under the Banking
money deposits. Regulation Act of 1949.
2. There is a direct relationship between the 2. They can’t advance loans or issue credit
Money Multiplier and the legal reserve cards, and cannot accept deposits from the
ratio, it means that if the reserve ratio is Non-Resident Indians (NRIs)
higher, then the money multiplier will also 3. It is not mandatory for the payments bank
be higher. to maintain Cash Reserve Ratio (CRR) with
Which of the statements given above is /are the Reserve Bank of India.
correct? Which of the statements given above is /are
(a) 1 only correct?
(b) 2 only (a) 1 and 2 only
(d) 1,2 and 3
Money Supply: 43. Consider the following statements regarding
1. The total stock of money in circulation Small Finance Banks (SFBs):
among the public at a particular point of 1. They are established as public limited
time is called money supply. companies under the Companies Act, 2013
2. M1 and M2 are known as narrow money that can provide basic banking service of
whereas M3 and M4 are known as broad acceptance of deposits and lending.
money. 2. Existing non-banking financial companies
3. M4 is most liquid and easiest for (NBFC), microfinance institutions (MFI)
transactions whereas M1 is least liquid of and local area banks (LAB) can apply to
all and the gradations are in increasing become small finance banks
order of liquidity from M1 to M4. 3. Foreign shareholding will not be allowed in
Which of the statements given above is /are these banks as per the rules for FDI in
incorrect? private banks in India.
(a) 1 only Which of the statements given above is/ are
(c) 3 only (a) 1 and 2 only
(d) 1, 2 and 3 (b) 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
61
44. Which one of the following best describes the 47. Which of the following best describes the
term “Certificate of Deposit”? term “Shadow Banking” with reference to
(a) An unsecured instrument issued in the Indian economy:
form of a promissory note to enable the (a) A type of direct banking that operates
corporate borrowers to raise short-term exclusively online without traditional
funds. physical branch networks
(b) It is a promissory note issued by the RBI to (b) A corporate structure which isolates
meet the short-term requirement of funds. illiquid and high-risk assets held by a bank
(c) The short-term instruments issued by or a financial organisation, or perhaps a
Commercial Banks and Special Financial group of banks or financial organisations.
Institutions (SFIs), which are freely (c) A term used to describe bank-like activities
transferable from one party to another. (mainly lending) that take place outside
(d) An instrument in writing containing an the traditional banking sector
unconditional order, signed by the maker, (d) The banks that have a specific purpose,
directing a certain person to pay a certain focused on a particular subset of the
sum of money only to the bearer of the population
instrument.
45. Consider the following statements regarding 48. Consider the following events:
Financial Inclusion Index: 1. Nationalisation of the 14 biggest
1. It is a composite index to capture the commercial banks
extent of financial inclusion across the 2. Establishment of National Bank for
country published annually by the NITI Agriculture and RuralDevelopment
Ayog (NABARD)
2. The index comprises three parameters 3. Formation of Narasimham Committee II
including access, usage and quality. 4. Nationalization of RBI
Which of the statements given above is/ are Which of the following describes the correct
correct? chronological sequence of above events
(a) 1 only (a) 4 - 1 - 2 - 3
(b) 2 only (b) 4 - 2 - 1 - 3
(c) Both 1 and 2 (c) 1 - 4- 3 - 2
(d) Neither 1 nor 2 (d) 2 - 4 - 1 - 3
46. Which of the following laws deals with Wilful 49. Consider the following statements regarding
Defaulters i.e. the entities that do not repay India Post Payments Bank (IPPB):
money despite having the ability to do so? 1. It was launched in 2018 under the
1. The Fugitive Economic Offenders Act 2018 Department of Financial Services, Ministry
2. Companies Act of 2013 of Finance and its 100% equity is owned by
3. Banking Regulation Amendment Act of the Government of India.
2017 2. Fincluvation will be a permanent platform
Select the correct answer using the code given of IPPB, which is a joint initiative to
below: collaborate with the Fintech Startup
(a) 1 and 2 only community to co-create and innovate
(b) 1 and 3 only solutions for financial inclusion.
(c) 2 and 3 only
(d) 1, 2 and 3
62
Which of the statements given above is/ are 52. Consider the following statements regarding
correct? Currency-Deposit Ratio :
(a) 1 only 1. The currency deposit ratio (CDR) is the
(b) 2 only ratio of money held by the public in
(c) Both 1 and 2 currency to that they hold in bank deposits
(d) Neither 1 nor 2 2. Currency-deposit ratio holds a direct
proportion relationship with the money
50. Consider the following statements regarding supply.
Non-Performing Assets: Which of the statements given above is /are
1. The loans on which interest or installment correct?
of principal remain overdue for a period of (a) 1 only
more than 90 days from the end of a (b) 2 only
particular quarter is called a Non- (c) Both 1 and 2
performing Asset. (d) Neither 1 nor 2
2. For short duration crop agriculture loans if
the loan (installment /interest) is not paid 53. Consider the following statements regarding
for 180 days, it would be termed as a NPA. monetary system:
3. SARFAESI Act 2002, has provisions for the 1. Fiat money is currency that is backed by a
banks to take legal recourse to recover physical commodity, such as gold or silver,
their dues. and the value of fiat money is derived from
Which of the statements given above is /are the worth of a commodity backing it.
correct? 2. Legal tender is money that is legally valid
(a) 1 and 2 only for the payment of debts and that must be
(b) 2 and 3 only accepted for that purpose when offered.
(c) 1 and 3 only Which of the statements given above is /are
(d) 1, 2 and 3 incorrect?
(a) 1 only
51. With reference to the Indian economy, which (b) 2 only
of the following best defines the term (c) Both 1 and 2
“Provisioning Coverage Ratio”? (d) Neither 1 nor 2
(a) The proportion of highly liquid assets held
by financial institutions, to ensure their
ongoing ability to meet short-term
obligations.
(b) The percentage of funds that a bank sets
aside for losses due to bad debts.
(c) The fraction of the deposits scheduled
banks must keep with RBI
(d) The percentage of a bank's total deposits
that it needs to maintain as liquid cash.
63
Answer Key
Q.7) Ans: B Q.34) Ans: A
Q.27) Ans: A
64
Indian Financial Market and Insurance in India

(d) Neither 1 nor 2
1. With reference to treasury bills consider the
1. Treasury bills are used by the central 4. Consider the following statements:
government to fulfill its long term liquidity. 1. The instruments of the security market are
2. Banks cannot keep treasury bills as SLR traded directly between the capital-raiser
approved security. and the instrument purchaser.
Which of the statements given above is/are 2. Equity market is an example of a primary
correct? market.
(a) 1only 3. Shares sold on the Bombay stock exchange
(b) 2only are examples of primary markets.
(c) Both 1 and 2 Which of the statements given above is/are
incorrect?
(d) Neither 1 nor 2
(a) 1 only
2. With reference to call money market consider (b) 2 and 3 only
the following statements: (c) 1 and 3 only
1. Call Money market is an inter-bank money (d) 1,2 and 3
market where funds are borrowed and
lent. 5. Consider the following statements regarding
2. In the call money market, borrowing can regulation of “Sweat Equity” in the Indian
take place only against securities. economy:
3. Individuals are also allowed to borrow and 1. Sweat equity refers to shares issued by a
lend in the call money market. company to its employees for non-cash
Which of the statements given above is/are consideration.
correct? 2. There is no maximum limit of sweat equity
(a) 1 only shares that can be issued by a listed
(b) 1 and 2 only company
3. Companies are only allowed to provide
(c) 2 and 3 only
Sweat equity benefits to employees, who
(d) 1,2 and 3
are exclusively working for a company and
not to any of its group companies including
a subsidiary or an associate.
1. The Cash Management Bills are non-
standard and discounted instruments
correct?
issued for maturities less than 91 days.
(a) 1 only
2. The Cash Management Bills are similar to
(b) 2 and 3 only
treasury bills in terms of their redemption.
(c) 1 and 3 only
(d) 1 ,2 and 3
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
65
6. Consider the following statements regarding Which of the statements given above is/are
Digital Banking Units: incorrect?
1. A Digital Banking Units are a specialised (a) 1 only
fixed point business unit that provides (b) 2 only
digital Banking products and services. (c) Both 1 and 2
2. These units can be set up by commercial (d) Neither 1 nor 2
banks including regional rural banks and
payment banks. 9. Consider the following statements regarding
Which of the statements given above is/are Bima Manthan 2022:
correct? 1. Bima Manthan is a hackathon with the
(a) 1 only theme innovation in insurance organised
(b) 2 only by SEBI.
(c) Both 1 and 2 2. Only Citizens of India or persons with
(d) Neither 1 nor 2 Indian origin are eligible to participate in
this hackathon.
7. They are high-profile institutional investors 3. The Bima Manthan aims for innovative
that are allotted shares before the subscription technology to stop motor insurance fraud,
opens for retail and other investors, and have
facilitate automatic death claim processing
to commit to holding their shares for a certain
as well as insurance inclusivity.
period after listing. These investors also aid in
price discovery of the IPO and get guaranteed
correct?
allotment a day before the IPO opens to the
(a) 2 only
public are normally allocated 60% of the QIB
(b) 2 and 3 only
quota.
Which of the following investors are referred (c) 3 only
to in the above lines? (d) 1, 2 and 3
(a) Angel investors
(b) Peer-to-peer lenders 10. Consider the following statements regarding
PM Jan Arogya Yojana:
(c) Venture capitalists
1. PM Jan Arogya Yojana is a Central Sector
(d) Anchor investors
Scheme that aims for universal health
8. Consider the following regarding different coverage.
types of Bonds issued in India: 2. The scheme covers both pre-
1. In green bonds, the money raised by the hospitalisation and post-hospitalisation
issuer is earmarked towards financing expenses.
'green' projects like renewable energy and 3. The beneficiaries are identified by Socio
clean transportation. Economic and Caste Census 2011.
2. Social Impact Bonds are contracts with the Which of the statements given above is/are
public sector or governing authority, in correct?
which the repayment and return on (a) 1 and 3 only
investment do not depend upon (b) 3 only
achievement of desired social outcomes. (c) 2 and 3 only
(d) 1, 2 and 3
66
11. Which of the following is based on Mutual 14. Consider the following statements regarding
Funds financial mechanism? Prompt Corrective Action (PCA) Framework :
1. Infrastructure Investment Trust (InVITs) 1. Prompt Corrective Action is a qualitative
2. National Investment Fund tool introduced by the Ministry of Finance
3. Real Estate Investment Trusts (REITs) under which direct action is taken on weak
4. Bharat Bond Exchange Traded Fund banks to ensure the financial health of a
Choose the correct option using the code given bank.
below: 2. The PCA framework is applicable only to
(a) 1 and 3 only commercial banks and not extended to co-
(b) 2 and 4 only operative banks, non-banking financial
(c) 1, 3 and 4 only companies (NBFCs).
(d) 1, 2, 3 and 4 3. A bank prohibited from expansion of
credit/investment portfolios under PCA
12. Which of the following statements about will, however, be allowed to invest in
Deposit Insurance and Credit Guarantee government securities/other high-quality
Corporation (DICGC) is/are correct?
liquid investments.
1. It registers a bank as insured immediately
and automatically on issuance of banking
correct?
license. (a) 1 and 3 only
2. For all insured banks, Payment of deposit (b) 3 only
insurance premium to DICGC is (c) 2 and 3 only
compulsory (d) 1, 2 and 3
3. Deposit insurance cover is ₹1 lakh per
depositor per bank 15. Consider the following statements regarding
Select the correct answer from the codes given Domestic Systemically Important Banks (D-
below: SIBs):
(a) 1 and 2 only 1. The Ministry of Finance places D-SIBs in
(b) 1 and 3 only appropriate buckets depending upon their
(c) 2 and 3 only Systemic Importance Scores (SISs).
(d) All of the above 2. Due to their economic and national
importance, the banks need to maintain a
13. Consider the following statements regarding higher share of risk-weighted assets as
PM- Fasal Bima Yojana: tier-I equity.
1. PM- Fasal Bima yojana is launched by the
Ministry of Agriculture but administered incorrect?
by IRDAI under the ministry of Finance. (a) 1 only
2. The Scheme is being implemented on an (b) 2 only
‘Area Approach basis.’ (c) Both 1 and 2
3. The scheme is mandatory for loanee (d) Neither 1 nor 2
farmers.
correct?
(a) 1 only
(b) 1 and 3 only
(c) 2 only
(d) 1, 2 and 3
67
16. Consider the following statements regarding 19. A central bank balance sheet is a reflection of
the Depositary Receipt (DR): its various functions, particularly its role as a
1. A depository receipt is a negotiable monetary authority and as banker to the
financial instrument issued by a bank to Government and banks. The structure of
reflect the security of a foreign company's assets and liabilities of the Reserve Bank are,
publicly traded securities that are more or less, in line with the balance sheet
exchanged on a local stock exchange followed by most central banks. Which of the
2. An Indian Depository Receipt (IDR) is a following constitutes the liability of RBI?
1. Notes Issued and Notes in Circulation
financial instrument that allows an Indian
2. Deposits of State Governments
company to raise funds in other countries.
Which of the statements given above is /are 3. Loans and Advances to SCBs, State Co-
incorrect? operative Banks
(a) 1 only Select the correct answer using the code given
(b) 2 only below:
(a) 1 and 2 only
(c) Both 1 and 2
(b) 2 only
(d) Neither 1 nor 2
(c) 1 and 3 only
17. Consider the following statements regarding (d) 1, 2 and 3
the National Payments Corporation of India
(NPCI): 20. Consider the following statements regarding
1. The National Payments Corporation of Development Finance Institutions:
India (NPCI) is an wholly owned subsidiary 1. In India, the first Development Finance
of Reserve Bank of India (RBI) to operate Institutions was operationalized in 1948
the retail payments and settlement with the setting up of the Industrial
systems in India Development Bank of India
2. It has been incorporated as a “Not for 2. DFIs do not accept deposits from people
Profit” Company under the Companies Act but they raise funds by borrowing funds
1956 from governments and by selling their
Which of the statements given above is/ are bonds to the general public
correct? Which of the statements given above is/ are
(c) Both 1 and 2 (b) 2 only
(d) Neither 1 nor 2 (c) Both 1 and 2
(d) Neither 1 nor 2
18. V Subrahmanyam committee (1997), Usha
Thorat committee (2004), Y H Malegam 21. Consider the following statements regarding
committee (2013) and Bimal Jalan National Asset Reconstruction Company Ltd.
committee were constituted to review which (NARCL):
of the following ? 1. NARCL has been incorporated under the
(a) Disinvestment Companies Act and has applied to the
(b) Tax reform Reserve Bank of India for a license as an
(c) Economic capital framework (ECF) Asset Reconstruction Company (ARC).
(d) Small-scale industries 2. This new entity is being created in
collaboration with both public and private
sector banks.
68
Which of the statements given above is/ are 24. Consider the following statements regarding
correct? the Insurance sector in India:
(a) 1 only 1. Both the Life Insurance and the Non-life
(b) 2 only Insurance are regulated by the IRDAI
(c) Both 1 and 2 (Insurance Regulatory and Development
(d) Neither 1 nor 2 Authority of India) which was setup on the
recommendations of R N Malhotra
22. Consider the following statements regarding committee.
the Debentures: 2. India is at par with international average in
1. It is a type of debt instrument that is not terms of insurance penetration for life
secured by physical assets or collateral. insurance and in the non-life insurance
2. Debenture holders have rights to vote in sector.
the company’s general meetings of Which of the statements given above is /are
shareholders. incorrect?
3. They are often easy to sell in stock (a) 1 only
exchanges and they contain less risk than (b) 2 only
equities. (c) Both 1 and 2
Which of the statements given above is/ are (d) Neither 1 nor 2
correct?
(a) 1 and 2 only Answer Key
(b) 1 and 3 only Q.1) Ans: D Q.13) Ans: C
(c) 2 only Q.2) Ans: A Q.14) Ans: B
(d) 1, 2 and 3 Q.3) Ans: A Q.15) Ans: A
23. Consider the following statements regarding Q.5) Ans: A Q.17) Ans: B
Trade Receivables Discounting System Q.6) Ans: A Q.18) Ans: C
(TreDs):
1. TReDS is an electronic platform for
facilitating the financing of trade Q.10) Ans: C Q.22) Ans: B
receivables of Micro, Small and Medium Q.11) Ans: D Q.23) Ans: A
Enterprises (MSMEs) through multiple Q.12) Ans: A Q.24) Ans: B
financiers authorised under the Payment
and Settlement Systems (PSS) Act, 2007
2. Corporates, Government Departments,
PSUs and any other entity can participate
as sellers as well as buyers in TReDS
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
69
Security Market in India
1. Bilateral netting sometimes seen in news, it

refers to
(a) Protection provided to both parties in 4. The term shell company sometimes seen in
trade news, it refers to
(b) Net security to the depositors against (a) A company having active business
losses in bank operations in the country
(c) Agreement among counter parties to (b) A company in which people contribute on
offset claims against each other to regular interval and earn on allocation
determine a single net payment obligation basis
(d) Credit derivative contracts that enable (c) A company without active business
investors to swap credit risk on a company, operations and used to disguise business
country ownership from law enforcement or the
public.
2. Consider the following statements with
(d) Company aims to promote the habits of
reference to Municipal bonds
thrift and saving amongst its members.
1. Municipal bonds are debt securities issued
by state and local governments.
5. Which of the following is not a secondary
2. Municipal bonds cannot be traded on the
market instrument?
stock exchange.
(a) Debentures
correct? (b) Preference shares.
(a) 1 only (c) Qualified institutional placement
(b) 2 only (d) Equity
(c) Both 1 and 2
(d) Neither 1 nor 2 6. Consider the following statements:
1. Gold exchange traded funds are better for
3. Payments Infrastructure Development Fund tax saving as compared to physical gold.
(PIDF) scheme was recently in news, consider 2. Increase in investment in gold ETF will
the following statements with reference to increase the current account deficit.
PIDF: Which of the statements given above is/are
1. It aimed at encouraging deployment of correct?
more digital payments infrastructure (a) 1 Only
across tier-3 to tier-6 centres. (b) 2 Only
2. The fund will be used to subsidize (c) Both 1 and 2
scheduled commercial banks only.
(d) Neither 1 nor 2
3. The fund has a corpus of 1000 crores.
correct?
(a) 1 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
70

7. Consider the following statements regarding Forward and future derivatives:
the preference shares: 1. A forward contract is a customized
1. Preference shares, is an exclusive share contract between two parties to buy or sell
option which enables Preference an asset at a specified future time at a price
shareholders (PSH) to get a fixed rate of agreed upon today.
dividend regardless of the volume of 2. Forward contracts are exchange traded
profit. and are very liquid and transparent, on the
2. Preference shareholders enjoy the same other hand, a Futures contract is
kind of voting rights, like equity negotiated privately between buyer and
shareholders. seller.
3. They also have the right to claim Which of the statements given above is /are
repayment of capital if the company correct?
dissolves. (a) 1 only
Which of the statements given above is /are (b) 2 only
correct? (c) Both 1 and 2
(a) 1 and 2 only (d) Neither 1 nor 2
(b) 2 and 3 only
(c) 1 and 3 only 10. Which of the following best describes the
(d) 1, 2 and 3 term “Arbitrage” with reference to the
Indian economy?
8. Consider the following statements regarding (a) The simultaneous purchase and sale of the
Bonds and Debentures: same asset in different markets in order to
1. Bonds are debt financial instruments profit from tiny differences in the asset's
issued by large corporations, financial listed price.
institutions and government agencies that (b) A risk management strategy employed to
are not backed up by any collaterals or offset losses in investments by taking an
physical assets. opposite position in a related asset.
2. Debentures are debt financial instruments (c) The buying of securities primarily to earn a
issued by private companies, with the regular income from such investment and
backing up of collaterals or physical assets. possibly make some long-term gain on
3. Bonds are long term investments and their account of price rise in future
tenure is generally higher than (d) The act of conducting a financial
debentures. transaction that has substantial risk of
Which of the statements given above is /are losing value but also holds the expectation
correct? of a significant gain.
(a) 2 only
(b) 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
71
11. Consider the following statements regarding 13. These are financial instruments issued by
the Zero coupon Zero principal instrument: registered foreign institutional investors
1. Zero coupon zero principal instruments (FIIs) to international offshore investors who
can be issued by a Not-for-Profit want to invest in Indian stock markets but do
Organisation (NPO) which will be not want to register with the market
registered with the Social Stock Exchange regulator, the Securities and Exchange Board
(SSE) segment of a recognised stock of India (SEBI). Which of the following
exchange. financial instruments is mentioned in the
2. Zero-coupon bonds pay regular interest above lines?
and redeemed at market value. (a) Foreign direct investment
Which of the statements given above is /are (b) Qualified institutional placement
correct? (c) Participatory Notes
(a) 1 only (d) Alternative investment funds
(b) 2 only
(c) Both 1 and 2 14. Which of the following statement/s about the
(d) Neither 1 nor 2 ‘debt overhang’ problem is/are correct?
1. It refers to a situation where all
12. Consider the following statements regarding accumulated profits over the years gets
the Differences between Debt and Equity used up in repaying the accumulated debt.
Capital 2. Debt overhang reduces social welfare.
1. Debt Capital is an asset for the company Select the correct answer from the codes given
that they show in the books as the entity’s below:
funds, whereas Equity Capital is a liability (a) 1 only
for the company that they have to pay back (b) 2 only
within a fixed tenure. (c) Both 1 and 2
2. Debt Capital is a low-risk investment while (d) Neither 1 nor 2
Equity Capital is a high-risk investment
Which of the statements given above is /are 15. Consider the following statements regarding
correct? Green Bond:
(a) 1 only 1. A green bond is a type of fixed-income
(b) 2 only instrument that is specifically earmarked
(c) Both 1 and 2 to raise money for climate and
(d) Neither 1 nor 2 environmental projects.
2. HDFC Bank was the first bank to issue
green bonds in India.
3. Power Finance Corporation Ltd (PFC)
issued India’s first ever Euro denominated
Green bond.
Incorrect?
(a) 1 only
(b) 2 only
(c) 2 and 3 only
72
Infrastructure investment trusts (InvITs): the Sovereign Gold Bonds (SGBs) :
1. Infrastructure investment trusts (InvITs) 1. They are substitutes for holding physical
are like mutual funds that pool money gold in which Investors have to pay the
from investors and are regulated by RBI. issue price in cash and the bonds will be
2. An InvIT is established as a trust settled by redeemed in gold on maturity.
the sponsor under the Indian Trusts Act, 2. The Bonds are issued in denominations of
1882 and the trust deed registered in India one gram of gold and in multiples thereof,
under the Registration Act, 1908. and there is no minimum or maximum
3. The investment must be made only in investment limit of subscription.
completed and revenue-generating 3. These securities are eligible to be used as
projects and not in under-construction collateral for loans from banks, financial
projects Institutions and Non-Banking Financial
Which of the statements given above is /are Companies (NBFC)
correct? Which of the statements given above is /are
(b) 3 only (a) 1 and 3 only
(c) 1 and 3 only (b) 2 and 3 only
(d) 1, 2 and 3 (c) 1 and 2 only
(d) 1, 2 and 3
17. It is a basket of securities that trade on an
exchange, just like a stock. It reflects the 19. This bond is defined as a three-party
composition of an Index, like BSE Sensex. Its agreement that legally binds together a
trading value is based on the Net Asset Value principal who needs the bond, an obligee
(NAV) of the underlying stocks (such as who requires the bond, and a company that
shares) that it represents. Its share prices sells the bond. These bonds protect the
fluctuate all day as it is bought and sold. beneficiary against acts or events that impair
Which of the following financial instruments the underlying obligations of the principal.
are referred to in the above lines? Which of the following types of bonds is
(a) Mutual funds mentioned in the above lines?
(b) Exchange Traded Fund (a) Additional Tier – 1 (AT-1 Bonds) Bonds
(c) Alternative investment fund (b) Social impact bond (SIB)
(d) Hedge funds (c) Surety bonds
(d) Masala bonds
73
20. Which of the following best describes the

term “Hedging” with reference to the Indian 22. What do you mean by the term “Blue Chip
economy? Stocks” with reference to the Indian
(a) A financial derivative that allows one economy?
investor to swap or balance their credit risk (a) The shares of very large and well-
with that of another. recognised companies with a long history
(b) A risk management strategy employed to of sound financial performance
offset losses in investments by taking an (b) The shares of companies mitigating
opposite position in a related asset. climate change through the conservation
(c) The buying of securities primarily to earn a and restoration of coastal and marine
regular income from such investment and ecosystems.
possibly make some long-term gain on (c) The shares of companies those that reach
account of price rise in future a valuation of $1 billion without being
(d) The act of conducting a financial listed on the stock market
transaction that has substantial risk of (d) The shares of companies engaged in the
losing value but also holds the expectation design and fabrication of semiconductors
of a significant gain. and semiconductor devices.
Treasury Bills: the differences between Primary Market
1. Treasury bills or T-bills, which are money Secondary Market:
market instruments, are long term debt 1. Primary Market is that segment of the
instruments with maturities higher than capital market which deals with new
one year, issued by the Government of securities which is also known as ‘new
India. issues market’
2. Treasury bills are zero coupon securities 2. The secondary market, or otherwise called
that pay regular interests the stock market, is a place where the
3. Banks give treasury bills to the RBI to get securities are traded between investors,
money under repo and they can also keep after their issue to the public in the primary
it to fulfil their Statutory Liquid Ratio (SLR) market
requirements. 3. In a Secondary market, the company is
Which of the statements given above is /are directly involved in the transaction
correct? whereas, in the Primary market, there is no
(a) 2 only involvement of the company.
(b) 3 only Which of the statements given above is /are
(c) 1 and 3 only incorrect?
(d) 1, 2 and 3 (a) 1 only
(b) 2 and 3 only
(c) 3 only
(d) 1 and 3 only
74
Answer Key
Q.12) Ans: B
75
External Sector in India
1. In the context of the External Commercial Which of the statements given above is/are
Borrowings, consider the following correct?
statements: (a) 1 only
1. External Commercial Borrowings (b) 2 only
constitute the largest component of India’s
(c) Both 1 and 2
external debt.
(d) Neither 1 nor 2
2. External Commercial Borrowings facilitate
investments in the Indian stock markets. 4. In the context of the Special Drawing Rights of
Which of the statements given above is/are the IMF, which of the statements given below
incorrect? is/are correct?
(a) 1 only
1. The concept of SDR was introduced as an
(b) 2 only
alternative to the Triffin Dilemma.
(c) Both 1 and 2
2. The IMF does not offer any interest rate on
(d) Neither 1 nor 2
the SDR quota deposited by the countries.
2. Consider the following statements: 3. Trading of SDRs amongst the members is
1. The idea of Tobin Tax was to end the prohibited for the management of the
speculation and volatility in the stock Balance of Payment crisis.
prices of the secondary market. Select the correct answer using the codes given
below:
2. Scarcity of dollars in the Indian market are
favorable for the exporters and not for the (a) 1 only
importers. (b) 2 and 3 only
3. Nominal Exchange rate considers the (c) 1 and 2 only
purchasing power of the country and (d) 1 and 3 only
excludes the effects of Inflation.
Which of the statements given above is/are 5. If India adopted full currency convertibility
incorrect? without any limitations, which of the
(a) 3 only situations given below would see
considerable increase with respect to Indian
(b) 1 and 3 only
market?
(c) 2 and 3 only
1. Easy Movement of Foreign Portfolio
(d) 2 only Investments
2. Increase the Non-Performing Assets.
3. Avoidance of Profit shifting.
1. Balance of Payments (BoP) records the
4. Currency volatility Risks.
economic transactions between the
citizens and non-citizens of a country.
below:
2. Trade protectionists policies of the USA
(a) 1, 2, and 3 only
government can adversely impact the
Current Account Deficit of India. (b) 2, 3, and 4 only
(c) 1, 3, and 4 only
(d) 1, 2, and 4 only
76
6. Consider the following statements: 9. Consider the following statements regarding

1. The concept of Helicopter money is used to World Trade Organization (WTO):
boost demand in the economy. 1. Agreement on Agriculture is the only
2. Negative interest rates act as liability for agreement of WTO regarding subsidies.
the depositor and assets for the borrower. 2. General Agreement on Tariffs and Trade
Which of the statements given above is/are (GATT) covers both the goods and services.
correct? 3. India’s tax relief to Special Economic Zones
(a) 1 only (SEZs) is regarded as a kind of trade barrier
(b) 2 only in WTO.
(c) Both 1 and 2 Which of the statements given above is/are
(d) Neither 1 nor 2 correct?
(a) 2 and 3 only
7. Which of the below mentioned steps are likely (b) 3 only
to cause the appreciation of rupee against
(c) 1 and 3 only
dollar?
1. Increase limit of FPI in Indian Bond market. (d) 1, 2, and 3
2. Currency Swap Agreements with other
10. Which of the following best describes the
countries.
Special Safeguard Mechanism often
3. Increase threshold for External
mentioned regarding WTO?
Commercial borrowings.
4. Dollar Swap between RBI and the Indian (a) It permits the imposition of taxes on
imports by a member country in case of
banks.
breach of the upper subsidy limit by
5. Dear Money Policy of RBI.
another member.
below: (b) It includes within its purview the levy of
(a) 1, 2, 3, and 4 only countervailing and the anti-dumping duty
(b) 1, 3, 4, and 5 only to protect domestic manufacturers.
(c) 2, 3, 4, and 5 only (c) It permits the imposition of taxes/tariffs by
(d) 1, 2, 3, 4, and 5 the third world countries to protect their
farmers from the export surges by the
8. Consider the following statements: developed countries.
1. Countervailing duties on imported goods (d) It is a set of reforms that extends the Peace
have been abolished in India. Clause on Agreement on Agriculture to an
2. Inverted Duty structure relates to the indefinite period.
exporter country while Anti-dumping duty
relates to the importer. 11. Which of the situations given below are likely
Which of the statements given above is/are to increase the External Debt of the country?
correct? 1. Increase deposits in the Foreign Currency
(a) 1 only Non-Residents Accounts (FCNR).
(b) 2 only 2. Tightening the thresholds on the External
Commercial Borrowings.
(c) Both 1 and 2
3. Increase in the share of SDR receipts.
(d) Neither 1 nor 2 4. Appreciation of rupee with respect to
dollars.
5. Decreasing subsidies on exports.
77
Select the correct answer using the codes given 14. Consider the following statements:
below: 1. Compulsory licensing of a patented
(a) 1, 2, and 3 only product does not require the consent of
(b) 1, 3, and 5 only the patent holder.
(c) 1, 3, and 4 only 2. Patent Pooling shares patent licenses
(d) 3, 4, and 5 only amongst the patent owners as well as to
the third party.
12. Consider the following statements: 3. It is not mandatory for a WTO member
1. Signing of Free Trade Agreements have country to comply with the TRIPS
helped India in boosting its exports. obligation.
2. The concept of Rules of Origin are not Which of the statements given above is/are
applicable to the FTA partners. correct?
3. Special 301 report of the USA lists (a) 1 and 2 only
countries with records of exchange rate (b) 2 and 3 only
manipulations. (c) 1 and 3 only
Which of the statements given below is/are (d) 1, 2, and 3
incorrect?
(a) 1 and 2 only 15. Consider the following statements regarding
(b) 2 and 3 only Special Drawing Rights (SDR) of IMF:
(c) 1 and 3 only 1. The value of SDRs are immune from daily
(d) 1, 2, and 3 exchange rate fluctuations.
2. The least weightage is accorded to the
13. Consider the following factors in relation to latest currency added to the SDR basket.
India’s economic situation: Which of the statements given above is/are
1. Subnational export promotion policies. correct?
2. Diversification of the exports. (a) 1 only
3. Higher GST on domestic consumption. (b) 2 only
4. Addressing inter-regional disparities. (c) Both 1 and 2
5. Ensuring mandatory government (d) Neither 1 nor 2
procurement.
Which of the above steps should be adopted to 16. Consider the following statements:
have a positive impact on India’s exports? 1. The Blue Box subsidies are not trade
(a) 1, 2, 3, and 5 distorting while the green box subsidies
(b) 1, 2, and 3 only are specially designed to minimize trade
(c) 1, 2, 4, and 5 only distortions.
(d) 1, 2, and 4 only 2. The per farmer Amber Box subsidy in India
is less as compared to the same given in
the developed countries.
3. The De-minimis entitlement of the subsidy
under the Amber Box applies to both the
developed and developing countries.
78
Which of the statements given above is/are 19. In the context of the Cairns grouping, which
correct? of the statements given below is/are
(a) 1 and 2 only incorrect?
(b) 2 and 3 only 1. It is a group of agricultural exporting
(c) 1 and 3 only nations demanding liberalization of
(d) 1, 2, and 3 agricultural trade.
2. India is a founding member of the group
17. In relation to the Exchange rate system owing to its maximum population
followed by India, which of the statements employed in the sector.
given below is/are correct? Select the correct answer using the codes given
1. India follows a dual exchange rate system below:
consisting of the official and the market (a) 1 only
rates. (b) 2 only
2. The official exchange rate of India has a (c) Both 1 and 2
direct bearing on the market exchange (d) Neither 1 nor 2
rate.
Select the correct answer using the codes given 20. Consider the following statements:
below: 1. Exports from the countries under the
(a) 1 only Generalized System of Preferences List are
(b) 2 only subjected to lower import tariffs on all
(c) Both 1 and 2 commodities.
(d) Neither 1 nor 2 2. Global system of Trade preferences is a
trade agreement among the developed
18. Consider the following statements: nations of the world.
1. The appreciation and depreciation of a Which of the statements given above is/are
currency is a feature of the floating correct?
exchange rate regime. (a) 1 only
2. The official annual rate of appreciation and (b) 2 only
depreciation of an asset are fixed by a (c) Both 1 and 2
country. (d) Neither 1 nor 2
correct? 21. Which of the following statements about
(a) 1 only Reserve Tranche Position is/are correct?
(b) 2 only 1. The reserve tranche is basically an
(c) Both 1 and 2 emergency account that IMF members can
(d) Neither 1 nor 2 access at any time.
2. The reserve tranches that countries hold
with the IMF are considered their facilities
of first resort
3. To have access to reserve tranche country
need to pay service charge of fix amount
along with some conditions by IMF
79
Select the correct answer from the codes given 24. Which of the following statements are correct
below: about current account in the context of the
(a) 1 and 2 only external sector of India?
(b) 1 and 3 only 1. Current account is maintained by every
(c) 2 and 3 only government of the world.
(d) All of the above 2. This account is maintained by the ministry
of industry and commerce in India.
22. Which of the following statements is/are 3. Current transactions of an economy shown
correct about External Commercial in this account are—export, import,
Borrowings (ECB)? interest payments, private remittances
1. ECBs provide an opportunity to borrow a and transfers.
large volume of funds for a relatively long Select the correct answer from the codes given
term. below:
2. Interest rate of ECBs are slightly higher (a) 1 and 2 only
compared to domestic funds (b) 1 and 3 only
Select the correct answer from the codes given (c) 2 and 3 only
below: (d) All of the above
(a) 1 only
(b) 2 only 25. Which of the following statements are
(c) Both 1 and 2 incorrect about the balance of payment of a
(d) Neither 1 nor 2 country?
1. It is an outcome of the total transactions of
23. Which of the following statements is/are an economy with the outside world in one
correct about fixed currency regime and year.
floating currency regime? 2. A negative BoP is unfavorable for an
1. In a fixed currency regime, the exchange economy every time it occurs.
rate of a particular currency is fixed by the 3. Negative BoP always results in a BoP crisis.
IMF. Select the correct answer from the codes given
2. In the floating currency regime, a domestic below:
currency is left free to float against (a) 1 and 2 only
currency basket of IMF. (b) 1 and 3 only
Select the correct answer from the codes given (c) 2 and 3 only
(a) 1 only
(b) 2 only 26. “It is a currency which is usually available in
(c) Both 1 and 2 its forex market and it is most volatile in
(d) Neither 1 nor 2 nature.” Identify the currency described in
this statement:
(a) Soft currency
(b) Hot currency
(c) Heated currency
(d) Cheap currency
80
27. About the special economic zone (SEZ) in (d) Arrangement of the tax avoidance is
India, which of the following statements are examined from the perspective of the
incorrect? consequence it has on destination country
1. India had set up Asia’s first ‘export and source country where corporates or
processing zone’ (EPZ) in Kandla under SEZ other entities involved have to pay taxes as
policy immediately after SEZ act was per both countries tax laws.
passed
2. The SEZs can be set up by either the 29. Which of the following things may happen if
Government of India, States or even domestic currency is depreciating in context
private sector in either industry or service of foriegn currency borrowings?
sector, not in agriculture sector. 1. Debt service liability would decrease.
3. Development of infrastructure facilities is 2. More domestic currency would be
one of the principal objectives of the required to buy the same amount of
Ministry of Commerce and Industry behind foreign exchange.
SEZ. 3. Could create corporate distress in the
Select the correct answer from the codes given domestic market.
below: Select the correct answer from the codes given
(a) 1 and 2 only below:
(b) 2 and 3 only (a) 1 and 2 only
(d) All of the above (c) 2 and 3 only
28. Doctrine of ‘substance over form’ is usually
used in international transactions especially 30. Extended Fund Facility (EFF) is a lending
in context of General Anti-Avoidance Rules, facility to help members with balance of
which of the following accurately explains payments. Which of the following
this doctrine? organization provides this facility?
(a) The real intention of the parties and (a) International Monetary Fund (IMF)
purpose of an arrangement is taken into (b) World Bank
account for determining the tax (c) Asian Development Bank
consequences, irrespective of the legal (d) International Development Association
structure of the concerned transaction or (IDA)
arrangement.
(b) Legal structure is examined in both source
and destination and based on that tax
consequences are determined irrespective
of intentions of the parties and purpose of
an arrangement.
(c) International treatises are given priority in
cases where transactions are applicable for
incidence of tax and legal structure of both
countries or intentions of parties or
purpose of an arrangement takes a back
seat.
81
33. Which of the following statements regarding

Export Credit Guarantee Corporation (ECGC)
31. Consider the following statements regarding are correct?
the types of foreign investments: 1. ECGC provides credit risk insurance for
1. Foreign Portfolio Investments (FPI) exports
includes investments in high-yielding 2. It is partially owned by the Ministry of
assets such as the plant and machinery of Commerce and Industry and partially by
a business consortium of Indian industrial export
2. Foreign Direct Investments (FDI) Investors corporation.
can quickly depart from the country as 3. ECGC has launched NIRVIK Scheme to
they invest in stocks and bonds, which are provide high insurance cover, reduced
liquid. premium for small exporters and a
3. Foreign institutional investors (FIIs) are simplified claim settlement process.
companies based outside of India that Select the correct answer from the codes given
make investment proposals in the country. below:
Which of the statements given above is/ are (a) 1 and 2 only
correct? (b) 1 and 3 only
(b) 3 only (d) All of the above
(c) 1 and 3 only
(d) 1, 2 and 3 34. Following types of trade agreements have
provisions to facilitate free movements of
32. Consider the following statements regarding labour and capital, harmonize technical
International Financial Services Centres standards across members. Identify such
Authority (IFSCA): agreement among given below:
1. IFSCA is created by executive order to (a) Preferential Trade Agreement (PTA)
develop and regulate financial services, (b) Custom Union
financial products and financial institutions (c) Common Market
in the International Financial Services (d) Economic Union
Centre (IFSC)
2. An International Financial Services Centre 35. Which of the following statements about
(IFSC) is a jurisdiction that provides world London Interbank Offered Rate (LIBOR)
class financial services exclusively to non- is/are correct?
residents, in the domestic currency of the 1. LIBOR is the benchmark interest rate at
location where the IFSC is located. which major global banks lend to one
Which of the statements given above is /are another.
correct? 2. LIBOR is administered by the International
(a) 1 only monetary fund (IMF)
(b) 2 only Select the correct answer from the codes given
(c) Both 1 and 2 below:
(d) Neither 1 nor 2 (a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
82
36. Which of the following statements about 38. Which of the following statements is/are
Special Drawing Rights (SDRs) is/are correct about Bilateral Investment Treaties
correct? (BIT)?
1. It is an international reserve asset, created 1. BITs are aimed at protecting investments
by the IMF to supplement its member made by investors of both countries.
countries’ official reserves. 2. BIT imposes obligations on host states to
2. It is neither a currency nor a claim on the accord fair and equitable treatment (FET)
IMF. to foreign investment.
3. Its value is based on the basket of currency 3. As per Model BIT in 2016, India moved
where currencies of all IMF members are away from an overly investor-friendly
placed for comparison approach to a somewhat protectionist
Select the correct answer from the codes given approach concerning foreign investments.
below: Select the correct answer from the codes given
(a) 1 and 2 only below:
(b) 1 and 3 only (a) 1 and 2 only
(d) All of the above (c) 2 and 3 only
37. Which of the following statements is/are
correct about Early harvest scheme (EHS)? 39. Consider the following difference between
1. Early harvest scheme is a successor of a devaluation and depreciation:
Free Trade Agreement between two 1. Devaluation is the fall in the value of
trading partner. domestic currency in relation to foreign
2. It is primarily a confidence building currency in a situation when exchange rate
measure. is determined by the forces of demand and
3. This helps the two trading countries supply in the international currency
identify certain products for tariff market, whereas depreciation is the fall in
liberalisation. the value of domestic currency in relation
Select the correct answer from the codes given to foreign currency as planned by the
below: government.
(a) 1 and 2 only 2. Devaluation takes place under a fixed
(b) 1 and 3 only (pegged) exchange rate system, whereas
(c) 2 and 3 only depreciation takes place under a flexible
(d) All of the above exchange rate system.
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
83
40. Which of the following consist of Forex

Reserves:
1. Government Securities
2. Special Drawing Rights (SDRS) Answer Key
3. Fiat Money
4. Reserve tranche position (RTP) Q.3) Ans: B Q.23) Ans: D
Select the correct answer from the codes given Q.4) Ans: A Q.24) Ans: B
below: Q.5) Ans: C Q.25) Ans: C
(a) 1, 2 and 3 only Q.6) Ans: C Q.26) Ans: A
(b) 2, 3 and 4 only Q.7) Ans: D Q.27) Ans: A
(c) 1, 2 and 4 only Q.8) Ans: A Q.28) Ans: A
Q.18) Ans: A Q.38) Ans: D
84
Taxation and Public Finance in India
1. With reference to the public finance, consider Select the correct answer using the codes given
the following statements: below:
1. All revenues received by the government (a) 1 only
by way of taxes whether direct or indirect (b) 1 and 3 only
except the loans raised through T-Bills (c) 3 only
(treasury bills) are credited to the (d) 1, 2 and 3
consolidated fund of India
2. Receipts from treasury bills are included in 4. Which one of the following statements
the Public Account of India as treasury bills regarding the levying, collecting and
are short term instruments. distribution of Land Revenue is correct?
Which of the given statement(s) is/are (a) The Union levies, collects and distributes
incorrect? the proceeds of land revenue between
(a) 1 only itself and the states
(b) 2 only (b) The Union levies, and states collect it on
(c) Both 1 and 2 behalf of the Union and all the proceeds of
(d) Neither 1 nor 2 land revenue are distributed among the
states
2. Which of the following is not a feature of the (c) The Union levies and collects the land
Outcome Budget? revenue tax but all the proceeds are
(a) Outcome budgeting makes government distributed among the states
programmes more outlay oriented in (d) The states levy, collect and retain the
which outcomes of programmes are proceeds of land revenue tax with
measured in terms of Rupees themselves
(b) It indicates the actual physical
performance in the previous year, current 5. In context of public finance in India, consider
year and targeted performance during the the following:
projected (next) year. 1. Securities issued against Small savings
(c) It is a progress card on what various funds
Ministries and Departments have done 2. Market Stabilization Scheme Bonds
with the outlays in the previous annual 3. Securities issued to International
budget Monetary Fund (IMF)
(d) Outcome Budgeting was first introduced in Which of these is/are component(s) of internal
2005-06, since then, every ministry debt?
handling a sector presents a preliminary (a) 1 only
outcome budget to the Ministry of Finance (b) 1 and 2 only
(c) 2 only
3. Under which of the following circumstances (d) 1, 2 and 3
may the Securities Transaction Tax arise?
1. Profits are made on a certain security
2. Company pays dividend to the owners
3. A security is purchased or sold
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6. Consider the following: (b) 2 only

1. Revenue Deficit (c) 1, 2 and 3
2. Capital Expenditure (d) None of the above
3. Effective Revenue Deficit
Grants or expenditure used for creation of 10. Consider the following statements with
Assets are calculated under which of the given reference to the Composition Levy:
heads? 1. Composition Levy is an alternative method
(a) 1 and 3 only of levy of direct tax designed for small
(b) 2 only businesses whose turnover is up to Rs. 1.5
(c) 2 and 3 only crore
(d) 3 only 2. The small businesses can avail to input tax
credits after the payment of the
7. Consider the following: composition levy
1. Fiscal Deficit Which of the given statement(s) is/are
2. Revenue Deficit incorrect?
3. Primary Deficit (a) 1 only
Which of the following deficit(s) focuses only (b) 2 only
on the present fiscal imbalances? (c) Both 1 and 2
(a) 1 and 2 only (d) Neither 1 nor 2
(b) 1 only
(c) 2 and 3 only 11. Consider the following statements with
(d) 3 only reference to the Goods and Services Tax
Compensation Cess:
8. Consider the following with reference to 1. To compensate states, a new tax,
Indian Tax System: offsetting the revenue losses and proceeds
1. Corporation Tax from which will be transferred to the states
2. Dividends Distribution Tax has been introduced
3. Minimum Alternative Tax 2. In the present design of GST, there is no
4. Stamp Duty provision for revenue compensation for
Which of the following is/are direct tax(es) the Union government.
applicable to private sector companies in Which of the given statement(s) is/are correct?
India? (a) 1 only
(a) 1 and 2 only (b) 2 only
(b) 2, 3 and 4 only (c) Both 1 and 2
(d) 1, 2 and 3 only
12. Which of the given statements is incorrect
9. Consider the following transactions: regarding the tax system of India?
1. Investment in Mutual Funds 1. According to the Article 265, no tax should
2. Buying an immovable property which is be levied/collected except the authority of
under construction the law
3. Transfer or shares and debentures 2. When the government reduces taxes
The stamp duty will be applicable on which of during the recession period, it is said to be
the given transaction(s)? following a pro-cyclical fiscal policy
(a) 1 and 2 only
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3. The Goods and Services tax(GST) is a (a) Related to base erosion and profit shifting
consumption and destination based (b) Related to interest subvention scheme for
indirect tax exporters
Select the correct answer using the codes given (c) Related to climate action plan passed in
below: Paris agreement
(a) 1 and 2 only (d) Related to fiscal responsibility and budget
(b) 2 only management act
(c) 2 and 3 only
(d) 3 only 16. Which of the following statements about
value added tax (VAT) are correct?
13. Which of the following document(s) is/are 1. It is a tax collected at every stage of value
published while presenting the Union addition.
Budget? 2. It is a multi-point tax collection system.
1. Fiscal Policy Strategy Statement 3. It has a ‘cascading effect’ on the prices of
2. Medium-Term expenditure Framework goods and thus it does not increase
Statement inflation.
3. Annual Financial Statement Select the correct answer from the codes given
4. Demand for Grants below:
5. Supplementary Demand for grants (a) 1 and 2 only
Select the correct answer using the codes given (b) 2 and 3 only
below: (c) 1 and 3 only
(a) 1, 3, 4 and 5 only (d) All of the above
(b) 1, 2, 3 and 5 only
(c) 1, 2, 3 and 4 only 17. Which of the following statements about
(d) 1, 3 and 4 only Goods and services tax are correct?
1. It is a destination-based taxation system.
14. Consider the following statements with 2. It is direct tax for the whole country on the
reference to the equalization levy: lines of “One Nation One Tax” to make
1. Equalization levy has been introduced India a unified market.
under the Income Tax Act, 1961 to tax 3. It is calculated in line with Value added tax
foreign companies which have a significant (VAT).
local base Select the correct answer from the codes given
2. It is a direct tax levied on the profits made below:
by the companies like Google, Amazon a) 1 and 2 only
3. Equalization levy is applicable to foreign b) 1 and 3 only
companies which have a tangible presence c) 2 and 3 only
in India d) All of the above
Which of the following statement(s) is/are 18. Which of the following statements about
incorrect? Commodities Transaction Tax is/are
(a) 1 only correct?
(b) 2 and 3 only 1. Commodities Transaction Tax (CTT) is a tax
(c) 3 only levied in India, on transactions done on the
(d) 1, 2 and 3 domestic commodity derivatives
15. The term 'escape clause' is often seen in news exchanges.
in context of
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2. It aims at encouraging excessive various exclusions, exemptions,

speculation. deductions, non-refundable credits,
Select the correct answer from the codes given deferrals, and preferential rates in the tax
below: code.
(a) 1 only 3. Provisions of the tax expenditure budget
(b) 2 only reduce the income tax liabilities of
(c) Both 1 and 2 individuals or businesses that undertake
(d) Neither 1 nor 2 certain types of activities.
19. Which of the following statements regarding below:
Securities Transaction Tax (STT) is/are (a) 1 and 2 only
incorrect? (b) 1 and 3 only
1. The rates of STT are prescribed by the SEBI (c) 2 and 3 only
from time to time. (d) All of the above
2. STT is an indirect tax.
3. STT is collected for the Government of 22. What is correct about grandfathering clauses
India by the stock exchanges. in tax related acts?
Select the correct answer from the codes given (a) It is a provision in which an old rule
below: continues to apply to some existing
(a) 1 and 2 only situations while a new rule will apply to all
(b) 2 and 3 only future cases.
(c) 1 and 3 only (b) It is a provision in which new rules are
(d) None of the above applied on tax obligations from the date of
passing of such an act for future tax
20. Identify the correct statements about liabilities.
Minimum Alternate Tax (MAT): (c) It is a provision in which tax laws are
1. MAT is a direct tax imposed on the ‘zero applied in a retrospective manner.
tax’ companies. (d) It is a provision where the government
2. It is applicable on all companies except announces a tax holiday on particular
those engaged in infrastructure and power items to counter inflation.
sectors, free trade zones, charitable
activities, venture and angel funds.
Select the correct answer from the codes given 23. Which of the following falls under Non-tax
below: Revenue Receipts?
(a) 1 only 1. Currency printing
(b) 2 only 2. Profits and dividends from public sector
(c) Both 1 and 2 undertakings (PSUs)
(d) Neither 1 nor 2 3. fines received by the government
21. Which of the following statements are correct 4. Grants given to states
about Tax Expenditure? 5. loans received by the government
1. Tax Expenditure are direct spendings by Select the correct answer from the codes given
the government to achieve certain social below:
goals. (a) 1, 2 and 3 only
2. The tax expenditure budget comprises the (b) 1, 2, 4 and 5 only
estimated revenue losses attributable to (c) 2, 3 and 5 only
88
(d) 3, 4 and 5 only (b) 1 and 3 only

(c) 2 and 3 only
24. Which of the following are the characteristics (d) All of the above
of revenue expenditure?
1. They are of consumptive kind and do not 27. Which of the following statements regarding
involve creation of productive assets. the Reserve Bank of India are correct?
2. This includes all the repayment liabilities of 1. The concept of Reserve Bank of India was
the government. based on the strategies formulated by Dr.
3. Revenue expenditure used in running a Ambedkar in his book named “The
government. Problem of the Rupee – Its origin and its
Select the correct answer from the codes given solution”.
below: 2. RBI regulates the credit and currency
(a) 1 and 2 only system in India.
(b) 1 and 3 only 3. RBI manages the FOREX Reserves of India.
(c) 2 and 3 only 4. The Reserve Bank of India is responsible for
(d) All of the above providing the public with a sufficient
supply of currency notes and coins.
25. Which of the following statements about Select the correct answer from the codes given
primary deficit is/are incorrect? below:
1. Interest liabilities when added to the fiscal (a) 1, 2 and 3 only
deficit makes it the primary deficit. (b) 2, 3 and 4 only
2. The decreasing trends in primary deficit (c) 1, 3 and 4 only
indicates Government’s decreasing (d) All of the above.
dependence on borrowings.
Select the correct answer from the codes given 28. Consider the following statements about
below: Department for Promotion of Industry and
(a) 1 only Internal Trade (DPIIT):
(b) 2 only 1. It is the nodal agency for implementing
(c) Both 1 and 2 policies related to Intellectual Property
(d) Neither 1 nor 2 Rights
2. DPIIT looks into formulating, promoting,
26. Which of the following statements about and facilitating policies of Foreign Direct
Financial Stability and Development Council Investment (FDI).
is/are correct? 3. Promoting internal and external trade is
1. The Finance secretary is the Chairman of one of the important functions of DPIIT
the FSDC. Which of the statements given above are
2. It is an autonomous body dealing with correct?
macroprudential and financial regularities (a) 1 and 2 only
in the entire financial sector of India. (b) 1 and 3 only
3. Promoting financial literacy and ensuring (c) 2 and 3 only
financial inclusion are the functions of (d) All of the above
FSDC.
Select the correct answer from the codes given 29. Which of the following statements about
below: National Housing Bank (NHB) is/are correct?
(a) 1 and 2 only
89
1. It is responsible for registering Housing Select the correct answer from the codes given
Finance Companies below:
2. The NHB ensures that all the housing (a) 1 and 2 only
finance companies under the Act follow (b) 1 and 3 only
the regulatory capital required as outlined (c) 2 and 3 only
in BASEL guidelines. (d) All of the above
below: 32. Consider the following pairs:
(a) 1 only Types of Meaning
(b) 2 only deficits
(c) 1 and 2 both 1. Monetized The monetary support the
(d) None of the above deficit Reserve Bank of India (RBI)
extends to the Centre as
30. With reference to Rural Financing in India, part of the government's
which of the following statements is/are borrowing programme
correct? 2. Revenue Excess of total expenditure
1. Rural Infrastructure Development Fund Deficit over total receipts
(RIDF) is maintained by NABARD excluding borrowings
2. The Kisan Credit Card (KCC) scheme was during a fiscal year.
designed by NABARD in association with 3. Effective The borrowing
the RBI Revenue requirements of the
3. NABARD provides recommendations to Deficit government, excluding
Reserve Bank of India on issue of licenses interest.
to Cooperative Banks Which of the pairs given above is / are correctly
Select the correct answer from the codes given matched?
below: (a) 1 only
(a) 1 and 2 only (b) 1 and 2 only
(c) 2 and 3 only (d) 1, 2 and 3
31. Which of the following statements is/are taxation system:
correct about the Small Industries 1. Specific tax is the tax which is fixed as per
Development Bank of India (SIDBI)? each unit of good or service rather than
1. SIDBI aims to facilitate and strengthen based on its value.
credit flow to MSMEs and address both 2. A Proportional Tax is a tax imposed in such
financial and developmental gaps in the a manner that the tax rate decreases as the
MSME eco-system across the country. amount subject to taxation increases.
2. In order to increase and support money 3. Consumption tax or destination tax are
supply to the MSE sector, it operates a levied where goods & services are
refinance program known as Institutional produced
Finance program. Which of the statements given above is/ are
3. CriSidEx, India's first sentiment index for correct?
micro and small enterprises (MSEs) has (a) 1 and 2 only
been developed jointly by RBI & SIDBI. (b) 1 only
90
(c) 2 and 3 only Select the correct answer from the codes given
(d) 1, 2 and 3 below:
(a) 1 only
34. What does capital account convertibility (b) 2 only
(CAC) mean? (c) 1 and 2 both
(a) The freedom to convert domestic currency (d) None of the above
into foreign currency and vice versa for
trade in goods and invisibles 37. Which of the following statements about the
(b) The weighted average of a country's United Nations Population Fund (UNPF)
currency in relation to an index or basket is/are correct?
of other major currencies. 1. UNFPA works directly to tackle Sustainable
(c) The unadjusted weighted average rate at Development Goals on health, education
which one country's currency exchanges and gender equality
for a basket of multiple foreign currencies. 2. UNFPA is supported by the UN budget for
(d) The ability to convert domestic currency its financial expenditure
into foreign currencies and vice versa to 3. State of World Population Report is
make payments for balance of payments UNPFA’s publication
transactions. Select the correct answer from the codes given
below:
(a) 1 and 2 only
35. Consider the following statements regarding (b) 1 and 3 only
Nominal Effective Exchange Rate (NEER) and (c) 2 and 3 only
Real Effective Exchange Rate (REER): (d) All of the above
1. A decrease in Nominal Effective Exchange
Rate (NEER) denotes depreciation in
rupee’s value, an increase reflects
appreciation.
2. Nominal Effective Exchange Rate (NEER) is
an accurate measure of a currency’s
strength as it is adjusted for inflation
differential
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
36. Which of the following statements is/are

correct about surety bond?
1. A surety bond is a legally binding contract
entered into by two parties
2. Surety bond is provided by the insurance
company on behalf of the contractor to the
entity which is awarding the project.
91
Answer Key
Q.19) Ans: A
92
Important International Economic Organisation And Important Indian

Economic Bodies, Acts.
1. With reference to the Fugitive Economic 3. With reference to the Resource building and
Offenders Act, 2018, consider the following mobilization of the IMF, consider the following
statements. statements:
1. A Fugitive Economic Offender is a person 1. Resources for IMF loans to its members on
against whom an arrest warrant has been non-concessional terms are provided by
issued for committing any offence listed in member countries, primarily through their
the Act, and the value of the offence is at payment of quotas.
least Rs 1000 crore. 2. Multilateral and bilateral borrowing serve
2. The Department of Economic Affairs in as a second and third line of defense,
collaboration with the Ministry of Finance respectively, by providing a temporary
may declare a person as a Fugitive supplement to quota resources.
Economic Offender. Which of the statements given above is/are
3. There is provision of confiscation of correct?
properties of a Fugitive Economic Offender (a) 1 only
which are proceeds of crime, Benami (b) 2 only
properties and any other properties both (c) Both 1 and 2
in India and abroad. (d) Neither 1 nor 2
correct? 4. Which of the following are the functions of the
(a) 1 and 2 only Reserve Bank of India?
(b) 2 and 3 only 1. The RBI shall recommend the
(c) 3 only denominational values of the notes as well
(d) 1, 2 and 3 as the discontinuance of issue of notes.
2. RBI sells the foreign currency in the foreign
2. Which among the following statements is exchange market when its supply
incorrectly mentioned with respect to the decreases in the economy and vice-versa.
Securities and Exchange Board of India ? 3. Setting of Inflation targeting.
(a) It can draft regulations, conduct inquiries, 4. Maintaining price stability in the economy.
pass rulings and impose penalties. Select the correct answer answer using the
(b) Autonomous organization accountable to codes given below:
the Parliament of India. (a) 1, 2 and 3 only
(c) Securities Appellate Tribunal (SAT) (b) 2 and 3 only
constituted to protect the interest of (c) 1, 2 and 4 only
entities that feel aggrieved by SEBI’s (d) 1 and 4 only
decision can also hear and dispose of
appeals against orders passed by the 5. Which of the following matters of the
Insurance Regulatory Development Commercial Banks are regulated by the
Authority of India (IRDAI) under the Reserve Bank of India?
Insurance act, 1938. 1. Controlling credit creation by commercial
(d) Chairman of SEBI is nominated by the banks.
Union Finance Ministry with consultation 2. Merger and winding up of commercial
with the RBI. banks.
93
Select the correct answer using the codes given 8. Which of the following statements about the
below: International monetary fund (IMF) is/are
(a) 1 only correct?
(b) 2 only 1. Reduce poverty around the world is one of
(c) Both 1 and 2 the objectives of IMF
(d) Neither 1 nor 2 2. Special Drawing Rights (SDRs) is IMF's
currency
6. Which of the following statements is 3. India is a founder member of the IMF.
incorrectly mentioned with respect to Asian Select the correct answer from the codes given
Development Bank? below:
(a) China holds the largest share in Asian (a) 1 and 2 only
Development Bank followed by India. (b) 1 and 3 only
(b) To eradicate extreme poverty is one of the (c) 2 and 3 only
main goals. (d) All of the above
(c) Resolution passed by the United Nations
Economic Commission for Asia and the Far 9. Which of the following branches of the world
East in 1963 resulted in the formation of bank is famously known as the soft window of
Asian Development Bank. the world bank?
(d) Board of Governors is the highest policy (a) International Bank for Reconstruction and
making body of Asian Development Bank Development (IBRD)
and consists of members from outside Asia (b) International Development Agency (IDA)
region also. (c) International Finance Corporation (IFC)
(d) Multilateral Investment Guarantee Agency
7. Which of the following statements is incorrect (MIGA)
with respect to the International Bank for
Reconstruction and Development (IBRD)? 10. Which of the following statements about the
(a) It is the lending arm of the World Bank International Centre for Settlement of
Group and offers loans to middle-income Investment Disputes (ICSID) are correct?
developing countries. 1. It is an investment dispute settlement
(b) The bank can finance any projects that body whose decisions are binding on the
increase economic activity and are parties.
responsible for eliminating poverty. 2. Once the parties have agreed to
(c) India has been the single largest borrower arbitration, they cannot withdraw their
of the Bank. consent unilaterally
(d) IBRD has maintained a triple-A rating since 3. It is dispute settlement arm of world bank
1959. 4. India is its member
below:
(a) 1, 2 and 3 only
(b) 1, 3 and 4 only
(c) 2 and 3 only
(d) 1 and 4 only
94
11. Which of the following statements about the 13. About Asian Infrastructure Investment Bank
World Trade Organisation (WTO) are (AIIB), which of the following statements are
correct? correct?
1. The WTO provides a rule based, 1. Membership in the AIIB is open to all
transparent and predictable multilateral members of the World Bank.
trading system 2. India has the highest voting power in AIIB.
2. Most Favoured Nation (MFN) treatment to 3. India is the largest beneficiary of AIIB
India’s exports ensures that India’s financing for infrastructure projects.
products once imported into the territory Select the correct answer from the codes given
of other WTO Members would get below:
favourable treatment vis-à-vis the (a) 1 and 2 only
domestic products in those countries (b) 1 and 3 only
3. In case of unfair trade practices causing (c) 2 and 3 only
injury to the domestic producers, there are (d) All of the above
provisions to impose Anti-Dumping or
Countervailing duties 14. Which of the following statements about the
Select the correct answer from the codes given Bank for International Settlements (BIS)
below: is/are correct?
(a) 1 and 2 only 1. It serves central banks in their pursuit of
(b) 1 and 3 only monetary and financial stability
(c) 2 and 3 only 2. Basel Committee for Banking Supervision
(d) All of the above (BCBS) which is responsible for the Basel
Accords, is housed in BIS’s office.
12. Which of the following statements about Select the correct answer from the codes given
BRICS Bank (New Development Bank) is/are below:
correct? (a) 1 only
1. NDB received observer status in the United (b) 2 only
Nations General Assembly. (c) Both 1 and 2
2. It is headquartered at Shanghai, China. (d) Neither 1 nor 2
3. China is the largest shareholder in NDB
making it the country with highest voting 15. Identify the correct statement/s about
power. United Nations Conference on Trade and
Select the correct answer from the codes given Development (UNCTAD) among the
below: following ones:
(a) 1 and 2 only 1. It aims to promote the development-
(b) 1 and 3 only friendly integration of developing
(c) 2 and 3 only countries into the world economy.
(d) All of the above 2. UNCTAD Objective is to maximise the
trade, investment and development
opportunities of developed countries
95

below: 18. Consider the following statements regarding
(a) 1 only Agreement on Agriculture (AoA):
(b) 2 only 1. AoA signed by World Trade Organization
(c) Both 1 and 2 members do not take into account non-
(d) Neither 1 nor 2 trade concerns like food security and the
environment.
16. About Special Safeguard Mechanism of the 2. Developing economies cannot impose an
WTO which of the following statement/s additional duty even in case of import
is/are correct? surge or fall of import price below a
1. It is a permission to increase tariffs for specified reference price.
developing countries when imports surge 3. Peace Clause Provides protection to
or price declines for agricultural products. domestic support measures and export
2. Special Safeguard Mechanism of the WTO subsidies of a World Trade Organization
is a special protection mechanism for Member from challenging other WTO
developing countries that allows Members.
developing countries to reduce tariffs on Which of the statements given above is/ are
agricultural imports that are injurious to incorrect?
domestic farmers. (a) 1 and 2 only
Select the correct answer from the codes given (b) 2 and 3 only
below: (c) 1 and 3 only
(a) 1 only (d) 1, 2 and 3
(b) 2 only
(c) 1 and 2 both Answer Key
(d) None of the above Q.1) Ans: C Q.10) Ans: A
17. Which of the following statements are correct Q.3) Ans: C Q.12) Ans: A
about Organization for Economic
Cooperation and Development? Q.6) Ans: A Q.15) Ans: A
1. Most OECD members are high-income Q.7) Ans: B Q.16) Ans: A
economies with a very high Human Q.8) Ans: B Q.17) Ans: B
Development Index (HDI) and are regarded Q.9) Ans: B Q.18) Ans: A
as developed countries.
2. India is a member of OECD
3. International Migration Outlook is one of
the publications of OECD
below:
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
96
Reports, Index etc.

(b) Women's Right
1. With reference to India Energy Outlook, (c) Public Services
consider the following statements: (d) Taxation
1. It is released by United Nations sustainable
Development Solutions Network 5. Which of the following statements is Incorrect
2. India's share in the growth in renewable with reference to the Bare Necessities Index?
energy is the second-largest in the world, (a) This Index is a means to assess equity in
after China. economic development among states and
Which of the following statements is/are regions in India
correct? (b) The Index is developed with data collected
(a) 1 only by NSO(National Statistical Office) in the
(b) 2 only year 2018 & 2019
(c) Both 1 and 2 (c) The Index has a range of 0 to 1, where 1
(d) Neither 1 nor 2 represents the best access to basic
necessities
2. SEBI (Securities and Exchange board of India) (d) The index has reported that poor states
has recently notified disclosure norms on has reduced the gap with rich states in
sustainable related Reporting for companies providing basic necessities
through the Business Reform and
Sustainability Report (BSSR). Which of the 6. State Energy Efficiency Index is released by
following statement is Incorrect? (a) Niti Aayog
(a) Now, Businesses will have to report on (b) Bureau of Energy Efficiency
their social and environmental impacts too (c) Tata Energy Research Institute
(b) Report will be applicable to top 100 listed (d) Institute for Energy Economics and
entities, in terms of market capitalisation Financial Analysis
(c) It would be mandatory from Financial Year
2022-23 7. Special Report on sustainable recovery, seen
(d) Sustainable Reporting includes company's sometimes in news, is jointly released by
progress towards Environmental, Social (a) International Energy Agency and Niti
and Governance (ESG) Goals Aayog
(b) World Economic Forum and The Energy &
3. The 'Energy Transition Index' is released by Resource Institute (TERI) India
(a) The Energy and Resource Institute (c) OECD (Organization for Economic
(b) World Economic Forum Cooperation and Development) and
(c) International Energy Agency Bureau of Energy Efficiency (BEE)
(d) World Bank (d) International Energy Agency and The
Energy & Resource Institute (TERI) India
4. With reference to the Oxfam Inequality Index,
which of the following is not the area in which 8. With Reference to the Global Social Mobility
policies and actions are measured in the Index, released by World Economic Forum,
Index? consider the following statements
(a) Worker's Rights
97
1. The Report defines Relative social Mobility 1. Trade and Development Report
as the ability of a child to experience better 2. Enabling Trade Report
life than their parents 3. The Service Trade Restrictions Index
2. Among BRICS grouping, China is most 4. The World Trade Statistical Review
Socially mobile, followed by India 5. World Trade Report
Which of the above statements is/are correct? Select the correct answer using the code given
(a) 1 only below:
(b) 2 only (a) 1, 2 and 5 only
(c) Both 1 & 2 (b) 1, 3, 4 and 5 only
(d) 2 and 4 only
9. Global Risk Report is published by
(a) World Economic Forum 13. Match the correct pair among the following:
(b) World Bank Report Organization
(c) United Nations Economic and Social A. Global Economic 1. International
Council Prospects (GEP) Monetary Fund
(d) Economic Intelligence Unit Report (IMF)
10. The Women, Business and Law Index is B. Global Financial 2. Bank for
released by Stability Report International
(a) UN - Women Settlements
(b) World Bank (BIS)
(c) Global Fund for Women C. Global Financial 3. World
(d) OXFAM International System Report Economic
Forum (WEF)
11. Consider the following statements regarding D. Global 4. World Bank
National Multidimensional Poverty Index: Competitiveness
1. The index is released by the Ministry of Report
Child and Women Development. Select the correct answer using the code
2. The index has three equally weighted given below:
dimensions – health, education, and
A B C D
standard of living.
(a) 2 4 1 3
3. The index used the National Family Health
(b) 4 3 4 1
Survey-4 as baseline.
(c) 4 1 2 3
4. As per the index, Jharkhand has the highest
(d) 3 1 4 2
proportion of people who are
multidimensionally poor. 14. Which among the following is/are not the
Which of the statements given above are publications of the World Economic Forum?
correct? 1. Global Cybersecurity Outlook
(a) 2, 3 and 4 only
2. Global Risks Report
(b) 1 and 3 only 3. Global Economic Prospects
(c) 2 and 3 only 4. Global Peace Index
12. Which of the following reports/index are below:
published by the World Trade Organization (a) 1 and 2 only
(WTO): (b) 1 and 3 only
98
(c) 3 only Network (SDSN)

(d) 3 and 4 only (c) International Energy Agency (IEA)
(d) World Economic Forum (WEF)
15. About the Global Hunger Index (GHI), which
of the following statement(s) is/are correct? 18. Which of the following indexes/reports are
1. This index is prepared by European NGOs prepared by NITI Aayog:
of Concern Worldwide and
1. Composite Water Management Index
Welthungerhilfe.
2. Financial Inclusion Index
2. Undernourishment, Child Wasting,
Maternal mortality and birth body weight 3. Export Preparedness Index
are the 4 indicators on the basis of which 4. Bare Necessities Index
GHI is measured. Which of the options given above is/are
3. GHI is determined on the scale of 0-1, correct?
where 0 is the best possible score whereas (a) 1 and 3 only
1 is the worst performance (b) 2 and 4 only
Select the correct answer using the code given (c) 1, 2 and 4 only
(a) 1 only
(b) 2 only 19. Consider the following statements regarding
(c) 1 and 3 only Export Preparedness Index:
(d) 3 only 1. EPI is prepared by the Ministry of
Commerce and Industry, in partnership
16. Consider the following statements regarding with the Institute of Competitiveness,
the India Patents Report: 2. EPI is a comprehensive analysis of India’s
1. The report was published by the export achievements of states and union
Department of Industrial Policy & territories and identifies challenges and
Promotion (DIPP), Ministry of Commerce. opportunities.
2. Indian patents are governed by the Indian 3. States with higher exports also experience
Patent Act of 1970. high Gross State Domestic Product (GSDP)
3. As per the report, Artificial Intelligence (AI) Which of the statements given above is/ are
continues to lead in terms of total patents correct?
filed under various emerging technology (a) 2 only
domains. (b) 2 and 3 only
Which of the statements given above are (c) 1 and 3 only
correct? (d) 1, 2 and 3
(a) 1 and 2 only
(b) 2 and 3 only 20. Consider the following statements regarding
(c) 1 and 3 only Digital Payments Index:
(d) All of the above 1. The Digital Payment Index, is published by
Ministry of Finance
17. Which organization released the ‘The Net- 2. Digital Payments Index (DPI) has been
Zero Industry Tracker’ Report? published on an Annual basis from 2021
(a) United Nations Environment Programme onwards without any time lag.
(UNEP) 3. Demand-side factors and supply-side
factors of Payment infrastructure are the
(b) Sustainable Development Solutions
99
parameters that enable measurement

penetration of digital payments in the Answer Key
country. Q.1) Ans: B Q.12) Ans: C
Which of the statements given above is /are Q.2) Ans: B Q.13) Ans: B
correct? Q.3) Ans: B Q.14) Ans: D
(a) 2 only
(b) 3 only
(c) 1 and 3 only Q.7) Ans: A Q.18) Ans: A
(d) 1, 2 and 3 Q.8) Ans: D Q.19) Ans: B
21. Consider the following statements regarding Q.10) Ans: B Q.21) Ans: B
International Food Price Index: Q.11) Ans: C Q.22) Ans: A
1. Published by the World Bank, the Food
Price Index tracks the international prices
of the most traded food commodities like
cereals, oilseeds, dairy products, meat and
sugar.
2. The Food Price Index (FFPI) is a measure of
the monthly change in international prices
of a basket of food commodities with
2014-16 as the Base period
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

House Price Index:
1. The National Housing Bank of India
publishes a quarterly house price index
(HPI) for ten major cities with the base year
for calculation 2010-2011.
2. It is based on official data on property price
transactions collected from the respective
state governments' registration
authorities.
incorrect?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
100
Economy - Key Terms In News
1. With reference to the term 'Bad Bank' seen

sometimes in news, which of the following 4. The' Positive Pay Mechanism' introduced by
statements is correct about Bad Banks? Reserve Bank of India means -
(a) Bad bank is a status given to a bank with (a) Timely payment of interests over loans
outstanding non-performing assets. financed with commercial banks
(b) Bad banks helps commercial banks to (b) Ensuring customer safety from cyber
resolve their bad loans attacks in transactions from ATMs
(c) Bad banks are involved in lending and (c) To augment customer safety in cheque
accepting public deposits payments with commercial banks
(d) None of the above Statements is correct (d) To reduce the amount deducted for
exchanging damaged notes of
2. With reference to term 'White Good' seen denominations over Rs 100 in order to
sometime in news, which of the following encourage more such exchanges
statements is correct
(a) White goods are big consumer appliances 5. Which of the following statements is Incorrect
which Traditionally were available only in regarding the 'Border Adjustment Tax'
white colour proposed recently
(b) White goods are those electronic goods (a) It is a duty to be levied on sin goods,
which are exclusively imported into India proceeds of which would be used for
(c) White goods is a term used to refer to Border Area Development
Industrial revolution in Europe, associated (b) It is a duty to be levied on imported goods
with production of cotton in accordance with the destination
(d) White goods refer to raw dairy products principal of taxation
which are not usually refrigerated and (c) WTO rules allows for such taxation
should be consumed in short duration of adjustments but the tax must be applied
time equally to imported and like domestic
products
3. Which of the following statements is true (d) This tax is intended to provide a level
about the term 'Roll over' related to Economy, playing field for domestic Industries
seen sometimes in news?
(a) It is the practice of publishing new credit 6. Which of the key statements is Correct
schemes by public sector banks wherein regarding 'Consol Bonds', recently seen
existing customers can transfer their old sometimes in the news ?
credit schemes (a) Consol bond is a fixed income security with
(b) It is the practice of refinancing of Debt with no maturity date
payment of additional fee (b) Consol bonds were majorly used by
(c) Generally, Shorter the term of maturity of American government during World War II
debt, less is the rollover risk associated (c) Once sold, Consol bonds cannot be
with it. redeemed at issuer's discretion, and only
(d) It is generally used as a measure by can be redeemed at agreed time period
borrower to prevent situations of Debt (d) Interest on Consol bonds are paid for the
Trap agreed time period only
101
7. Which of the following statements is correct Which of the statements given above is/ are
about 'Shared Economy' ? incorrect?
(a) It is a type of Economic System wherein (a) 1 only
Private players and government almost (b) 2 only
have equal share in the economy in terms (c) Both 1 and 2
of volume of economic activities (d) Neither 1 nor 2
(b) It is a type of Economic System wherein 10. Consider the following statements regarding
people prefer to buy domestic goods and the General Agreement on Trade in Services
imported goods in equal proportions, (GATS):
which is reflected in country's trade. 1. It provides a framework of rules governing
(c) It is a type of Economic System which services trade on all services, including the
highlights on the ability of individual to Services supplied in the exercise of
rent or borrow goods rather than to own governmental authority.
them 2. The agreement also provides a mechanism
(d) It is a type of Economic System which for resolving disputes between countries.
focuses on the individualistic consumption 3. The GATS divides services into four
of goods and economic growth is shared in categories in which Mode 1 implies
unequal proportion by different strata of services provided by a foreign entity that is
society commercially pressed in another country.
8. Which of the following are the main correct?
components of Capital account part of (a) 1 and 3 only
Balance of payment: (b) 2 only
1. Export and import of goods and services (c) 3 only
2. Foreign direct investment (d) 1, 2 and 3
3. Portfolio investment
4. Loans by the government of one country to 11. Consider the following statements regarding
another the Society for Worldwide Interbank
Select the correct answer using the code given Financial Telecommunication (SWIFT):
below: 1. It is a specialised agency of the United
(a) 1, 2 and 3 only Nations, for providing services related to
(b) 2, 3 and 4 only the execution of financial transactions and
(c) 1, 2 and 4 only payments between banks worldwide.
(d) 1, 2 3, and 4 2. SWIFT is not only a platform that sends
messages but also holds securities and
9. Consider the statements regarding the money.
Voluntary Retention Route (VRR): 3. If a country is excluded from SWIFT its
1. RBI had announced a separate scheme foreign funding would take a hit, making it
called VRR to encourage Foreign Portfolio entirely reliant on domestic investors.
Investors (FPIs) to undertake short-term Which of the statements given above is/ are
investments in Indian debt markets. correct?
2. Investments made by the investors (a) 1 and 3 only
through VRR are free of the macro- (b) 2 only
prudential and other regulatory (c) 3 only
prescriptions (d) 1, 2 and 3
102
12. Which Organization releases the 15. Which of the following correctly explains the
International Intellectual Property term “Seigniorage”?
Index? (a) A monetary policy which allows banks to
(a) World Intellectual Property Organization borrow money through repurchase
(WIPO) agreements.
(b) The U.S. Chamber of Commerce (b) Sale or purchase of government securities
(c) World Trade Organization (WTO) by RBI in the open market
(d) United Nations Conference on Trade and (c) The difference between the value of notes
Development (UNCTAD) printed and the cost of printing and
distributing them.
13. Consider the following Reports/Index and (d) A financial contract to offset claims against
their Publishers: each other to determine a single net
1. Global Chainalysis payment obligation
Cryptocurrency
Adoption Index 16. Consider the following statements regarding
2. World Economic World Bank debts:
Outlook Report 1. Debt overhang refers to a debt burden so
3. Global Economic International large that an entity cannot take on
Prospect Report Monetary Fund (IMF) additional debt to finance future projects
How many of the above pair is/are matched 2. Debt trap is a situation in which it becomes
correctly? difficult or impossible to repay the debt,
(a) Only one pair typically because high interest payments
(b) Only two pairs prevent repayment of the principal.
(c) All three pairs Which of the statements given above is /are
(d) None of the above incorrect?
(a) 1 only
14. Consider the following statements regarding (b) 2 only
Bail-in and Bail-out: (c) Both 1 and 2
1. A bail-out is rescuing a financial institution (d) Neither 1 nor 2
on the brink of failure by making its
creditors and depositors take a loss on 17. Nidhi Khare Committee was recently seen in
their holdings/deposits. the news. Which of the following statements
2. A bail-in happens when a powerful third is explaining the aim of the committee?
party like the government helps a (a) To develop international retail business at
struggling financial institution pay its debts the International Financial Services Centre
by injecting money into it. (IFSC)
Which of the statements given above is /are (b) To review the prevalent system of QR
correct? Codes in India for facilitating digital
(a) 1 only payments
(b) 2 only (c) To develop a comprehensive framework
(c) Both 1 and 2 on the Right to Repair
(d) Neither 1 nor 2 (d) To review the guidelines on television
rating agencies
103
(d) Neither 1 nor 2

18. With reference to the Indian Economy, what 21. Consider the following pairs regarding terms
does “Fiscal Drag” mean? related to taxation and their meaning :
(a) It is a budgetary situation where Terms Meaning
expenditure is higher than the receipts. 1. Tax The responsiveness of tax
(b) The ability of a government to sustain Buoyancy revenue to changes in tax rate
smooth monetary operation and long- 2. Tax The responsiveness of tax
standing fiscal condition. Elasticity revenue mobilisation in response
(c) It is a situation where income growth or to growth in the GDP or National
inflation moves taxpayers into higher tax Income
brackets. 3. Tax The revenues foregone as a result
(d) It refers to the missing of fiscal targets like Expenditure of various exemptions and
expenditure, receipts, deficit etc. in the concessions given by the
country’s budget. government.
Which of the pairs given above is/ are correctly
19. With reference to the Indian Economy, What
matched?
does “Haircut” mean?
(a) 1 only
(a) live testing of new products or services in a
(b) 3 only
controlled/test regulatory environment
(c) 2 and 3 only
(b) the lower-than-market value placed on an
(d) 1, 2 and 3
asset being used as collateral for a loan.
(c) It is a loan or advance for which the 22. Consider the following statements regarding
principal or interest payment remains World Bank’s report on poverty in India:
overdue for a period of 90 days. 1. The report uses the Consumer Pyramids
(d) A transaction where an entity sells its Household Survey, conducted by the
receivables to a third party a ‘factor’ like a Central Statistics Office to provide
bank or for immediate funds. estimates of how poverty and inequality in
India have evolved since 2011.
2. Poverty reduction during 2011 to 2019 was
the term various terms used in economy:
higher in rural areas as compared to urban
1. Helicopter money is the flow of funds (or
India.
capital) from one country to another in
3. Farmers with small landholding sizes have
order to earn a short-term profit on
experienced lower income growth than
interest rate differences and/or
farmers with the largest landholding.
anticipated exchange rate shift
2. Hot money is an unconventional monetary
correct?
policy tool, which involves printing large
(a) 2 only
sums of money and distributing it to the
(b) 2 and 3 only
public, to stimulate the economy during a
(c) 1 and 3 only
recession
(d) 1, 2 and 3
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
104
23. With reference to the Indian Economy , Which 26. What do you mean by “Regulatory Sandbox”
of the following correctly explains the term with reference to the Indian Economy?
“Neobanks”? (a) The process of measuring how well a firm
(a) Banks that lends money to farmers for can pay the interest due on outstanding
longer periods of time and charges them debt.
less interest than other types of banks: (b) The auctioning of residential or
(b) Direct banks that operates exclusively commercial properties that have been
online without traditional physical branch pledged with Banks to recover loans from
network borrowers.
(c) Banks that manages the process of (c) The live testing of new products or services
underwriting a security in conjunction with in a controlled/test regulatory
other banks environment
(d) Banks that have been merged recently (d) the difference between the loan amount
through mergers and acquisitions and actual amount recovered by the Bank
from their defaulting customer.
24. What do you mean by “Vulture funds” with
reference to the Indian Economy? Answer Key
(a) The funds given as capital for a business or Q.1) Ans: B Q.14) Ans: D
businesses start-up, usually in exchange Q.2) Ans: A Q.15) Ans: C
for convertible debt or ownership equity. Q.3) Ans: B Q.16) Ans: D
(b) The use of small amounts of funds from a
large number of individuals to finance a Q.6) Ans: A Q.19) Ans: B
new business venture. Q.7) Ans: C Q.20) Ans: D
(c) The lending of fund to enables individuals Q.8) Ans: B Q.21) Ans: B
to obtain loans directly from other Q.9) Ans: A Q.22) Ans: A
individuals, cutting out the financial Q.10) Ans: B Q.23) Ans: B
institution as the middleman Q.11) Ans: C Q.24) Ans: D
(d) The hedge funds that typically buy bonds
issued by financially distressed firms and
countries in the secondary market at
discounted prices
25. These Automated Teller Machines (ATMs) are

set up, owned and operated by non-bank
entities. Their role is confined to enabling the
transactions of all bank customers by
establishing technical connectivity with the
existing authorised, shared ATM Network
Operators or Card Payment Network
Operators. Which of the following types of
ATM is mentioned in the above lines?
(a) Brown Label ATM
(b) White Label ATM
(c) Green Label ATM
(d) Yellow Label ATM
105
Poverty and Unemployment
1. Poverty estimation in India is carried out by;

(a) Ministry of Rural Development and 4. With reference to Poverty Gap Ratio, consider
Ministry of Housing and Urban Poverty the following statements;
Alleviation at their respective demarcated 1. The poverty gap ratio is the mean shortfall
rural and urban areas. of the total population from the poverty
(b) Office of the Registrar General and Census line (counting the non-poor as having zero
Commissioner, India under Ministry of shortfall), expressed as a percentage of the
Home Affairs. poverty line.
(c) Niti Aayog based on the data collected by 2. There was a nearly 50% decline in PGR
the National Sample Survey Office under both in rural and urban areas during 2004-
the Ministry of Statistics and Programme 05 to 2011-12, reflecting that the
Implementation (MOSPI). conditions of the poor have improved both
(d) Ministry of Social Justice and in rural and urban areas.
empowerment in collaboration with Which of the statements given above is/are
respective state Governments. correct?
(a) 1 only
2. What can be the possible reason for (b) 2 only
determining poverty on the basis of (c) Both 1 and 2
consumption expenditure instead of income? (d) Neither 1 nor 2
(a) All people consume but not all earn.
(b) Presence of domination of the 5. Which of the following options is not true,
unorganized sector in India. with respect to Head Count Ratio ?
(c) Hindrance in collecting income data. (a) It is widely used and represents the cut-off
(d) All of the above. point below which people are considered
as poor.
3. Which of the following items is/are present in (b) The Head Count ratio does give insights
NSSO’s Mixed Recall Period for measuring about the severity of poverty.
consumption? (c) Below the Poverty Line category is marked
1. Food items with the help of its value.
2. Clothing (d) None of the above.
3. Foot wear
4. Institutional medical expenses 6. Situational Poverty can be defined as;
5. Education (a) Poverty is generally caused by a sudden
Select the correct answer from the options crisis or loss and is often temporary.
given below. (b) Poverty that persists because of internal
(a) 1, 4 and 5 psychological factors driven by financial
(b) 1 only issues.
(c) 2, 3, 4 and 5 only (c) Poverty that is caused by a violent and
(d) 1, 2, 3, 4 and 5 unhealthy environment because of
overcrowding.
(d) Poverty due to less job opportunities, less
access to services, less support for
106
disabilities and quality education (b) Frictional unemployment

opportunities. (c) Voluntary unemployment
7. A substantial percentage of Indian population (d) Casual Unemployment
lives in slums than it does in China. This refers 12. “When companies experience a reduction in
to an example of what kind of poverty ? the demand for their products or services,
(a) Absolute poverty they respond by cutting back on their
(b) Relative poverty production, making it necessary to reduce
(c) Urban poverty their workforce within the organisation. In
(d) All of the above. effect, workers are laid off”. Identify the type
of unemployment described in the
8. With reference to the Gini Coefficient, paragraph.
consider the following statements; (a) Structural unemployment
1. A value of 0 indicates perfect equality (b) Technological Unemployment
(where everybody has the same (c) Disguised Unemployment
wealth/income) and 1 indicates perfect (d) Cyclical unemployment
inequality (that is, where one person owns
all the wealth in a country). 13. About the Tendulkar Committee (2009) on
2. Values greater than 1 is a theoretically poverty estimation, which of the following
possibility. statements is/are correct?
Which of the above given statements is/are (a) It incorporated private expenditure on
correct? health and education while estimating
(a) 1 only poverty.
(b) 2 only (b) The Committee recommended using
(c) Both 1 and 2 uniform Reference Period based estimates
(d) Neither 1 nor 2 as opposed to Mixed Reference Period
based estimates that were used in earlier
9. Open Unemployment generally means methods for estimating poverty.
(a) marginal productivity of labour is zero Select the correct answer from the codes given
(b) unemployment that is natural and below:
inevitable (a) 1 only
(c) labourers when can’t find work and live (b) 2 only
unemployed (c) Both 1 and 2
(d) unemployment due to lack of aggregate (d) Neither 1 nor 2
demand.
14. Which of the following committees were
10. The report ‘ World Employment and Social constituted to estimate poverty in post
Outlook ‘ is published by independent India?
(a) International Labour Organization. 1. VM Dandekar
(b) United Nations Development Programme 2. Alagh Committee
(c) World Bank 3. Lakdawala Committee
(d) United Nations Human Rights Council 4. Tendulkar Committee
5. C Rangarajan Committee
11. Which of the following is known as search 6. Bibek Debroy committee
unemployment?
(a) Seasonal unemployment
107

17. About Aajeevika – National Rural Livelihoods
below:
Mission (NRLM), which of the following
(a) 1, 2, 3, 4 and 6 only
statements are correct?
(b) 2, 3, 4 and 5 only
1. It was launched by the Ministry of labour.
(c) 3, 4 and 5 only
2. The programme is supported partially by
(d) 1, 2, 3, 4 and 5 only
the World Bank.
15. Which of the following statements about 3. It aims at creating effective and efficient
Poverty Line Basket (PLB) is/are correct? institutional platforms to enable the rural
1. The PLB comprises goods and services poor to increase their household income.
considered essential to a basic minimum Select the correct answer from the codes given
standard of living — food, clothing, rent, below:
conveyance, and entertainment. (a) 1 and 2 only
2. Since expenditure on health and education (b) 1 and 3 only
rose significantly in the 1990s, the (c) 2 and 3 only
Tendulkar Committee excluded them from (d) All of the above
the basket.
18. Which of the following are correct about
Pradhan Mantri Kaushal Vikas Yojana
below:
(PMKVY) scheme?
(a) 1 only
1. It was launched under Make in India
(b) 2 only
Mission.
(c) Both 1 and 2
2. It aims at vocational training and
(d) Neither 1 nor 2
certification of Indian youth for a better
16. Which of the following correctly explains livelihood.
Harmonised Unemployment Rates? 3. PMKVY is implemented by the National
(a) Unemployed people are those who are of Skills Development Corporation (NSDC).
working age who are without work, are Select the correct answer from the codes given
available for work, and have taken specific below:
steps to find work. (a) 1 and 2 only
(b) Unemployed people are those who are of (b) 1 and 3 only
working age who are currently working at (c) 2 and 3 only
the same time looking for better (d) All of the above
opportunities in work.
19. Which of the following statements are correct
(c) Unemployed people are those who are of
about Global Multidimensional Poverty
working age who are working currently in
Index:
more than one organisation.
1. It was launched by the United Nations
(d) Unemployed people are those who are of
Development Programme (UNDP) and the
working age who are without work, are
Oxford Poverty & Human Development
available for work, but haven’t taken any
Initiative (OPHI).
specific steps to find work.
2. MPI is based on the idea that poverty is
unidimensional.
108
3. It takes into account three dimensions

broadly i.e. Health, Education and
Standard of living. Which of the statements given above is /are
Select the correct answer from the codes given correct?
below: (a) 1 only
(a) 1 and 2 only (b) 2 only
(b) 1 and 3 only (c) Both 1 and 2
20. Consider the following statements about Answer Key

Mahatma Gandhi National Rural Q.1) Ans: C Q.12) Ans: D
Employment Guarantee Work (MGNREGA): Q.2) Ans: D Q.13) Ans: A
1. The primary objective of the scheme is to
guarantee 100 days of skill-based
employment in every financial year to Q.6) Ans: A Q.17) Ans: C
adult members of any rural household Q.7) Ans: B Q.18) Ans: C
willing to work. Q.8) Ans: C Q.19) Ans: B
2. The act mandates Gram Sabha to Q.9) Ans: C Q.20) Ans: C
recommend the works that are to be Q.10) Ans: A Q.21) Ans: D
Q.11) Ans: B
undertaken.
3. At least one-third of beneficiaries under
this program have to be women.
correct?
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
21. Consider the statements regarding poverty in

India:
1. Absolute poverty is a situation in which a
person's income falls below a certain
percentage of the national median
income, while Relative poverty is defined
as a state in which a person cannot meet
their most basic needs.
2. Alagh Committee in 1979 determined a
poverty line based on Monthly Per Capita
Expenditure and Rangarajan committee
report in 2014 determined a poverty line
based on a minimum daily requirement of
calories for an adult
PW Web/App: https://smart.link/7wwosivoicgd4
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PREFACE

29. Consider the following statements regarding preferred as it indicates a country's

2. Crude Oil has the highest weightage in the

5. Which of the following statement is correct 7. Consider the following statements:

(c) 1 and 3 only

Which of the statements given above is/are

3. Consider the following statements: 6. In the context of Inflation, consider the

33. The term Stagflation was coined by Iain

34. Consider the following statements regarding

9. With reference to Agroforestry, consider the

Which of the statements given above is/are

2. Mixed farming Rearing of animals

(a) 1 and 2 only Which of the statements given above is/are

4. All primitive tribal households. 3. Apart from domestic procurement from

(d) Neither 1 nor 2 3. This act was aimed at curbing inflation

3. It provides special focus on states of

Infrastructure and Manufacturing

(b) 2, 3, and 4 only operation & maintenance (O&M) is borne

(c) Both 1 and 2 Living as well as Ease of Doing Business.

1. Consider the following statement regarding

19. About Agristack, which of the following

20. Consider the following statements regarding

30. Which of the following statement is/are

34. Consider the following statements regarding

1. Bond prices in the market decrease when the

Indian Financial Market and Insurance in India

Security Market in India

1. Bilateral netting sometimes seen in news, it

9. Consider the following statements regarding

20. Which of the following best describes the

External Sector in India

6. Consider the following statements: 9. Consider the following statements regarding

33. Which of the following statements regarding

40. Which of the following consist of Forex

Taxation and Public Finance in India

6. Consider the following: (b) 2 only

2. It aims at encouraging excessive various exclusions, exemptions,

(d) 3, 4 and 5 only (b) 1 and 3 only

36. Which of the following statements is/are

Important International Economic Organisation And Important Indian

Select the correct answer from the codes given

Reports, Index etc.

(c) 3 only Network (SDSN)

parameters that enable measurement

22. Consider the following statements regarding

Economy - Key Terms In News

1. With reference to the term 'Bad Bank' seen

(d) Neither 1 nor 2

25. These Automated Teller Machines (ATMs) are

Poverty and Unemployment

1. Poverty estimation in India is carried out by;

disabilities and quality education (b) Frictional unemployment

Select the correct answer from the codes given

3. It takes into account three dimensions

20. Consider the following statements about Answer Key

21. Consider the statements regarding poverty in

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