UPSC CSE EXAM

9 Year TOPIC - Wise PDF

Prelims PYQs
(TOPIC-WISE)

ECONOMY
[Part of our Prelims PYQ Content]
 PRELIMS PYQs Content - (Economy)
CHAPTER 1: INTRODUCTION AND BASICS OF MICRO-ECONOMICS

1. Consider the investments in the following 3. The good is an inferior good and
assets: income of the consumers increases
1. Brand recognition 4. Its price falls
2. Inventory Which of the above statements are correct?
3. Intellectual property (a) 1 and 4 only
4. Mailing list of clients (b) 2, 3 and 4
How many of the above are considered (c) 1, 3 and 4
intangible investments? (d) 1, 2 and 3
(a) Only one (b) Only two
(c) Only three (d) All four 5. If a commodity is provided free to the public
by the Government, then [UPSC 2018]
2. Consider the following statements: The (a) The opportunity cost is zero.
effect of devaluation of a currency is that it (b) The opportunity cost is ignored.
necessarily (c) The opportunity cost is transferred from
1. Improves the competitiveness of the the consumers of the product to the tax-
domestic exports in the foreign markets paying public.
2. Increases the foreign value of domestic (d) The opportunity cost is transferred from
currency the consumers of the product to the
3. Improves the trade balance Government.
Which of the above statement is/are correct?
(a) 1 only (b) 1 and 2 6. Despite being a high saving economy,
(c) 3 only (d) 2 and 3 capital formation may not result in
significant increase in output due to- [UPSC
24. Consider the following statements: Other 2018]
things remaining unchanged, market demand (a) Weak administrative machinery
for a good might increase if: [UPSC-2021] (b) Illiteracy
1. Price of its substitute increases (c) High population density
2. Price of its complement increases (d) High capital-output ratio

CHAPTER 2: NATIONAL INCOME

1. With reference to the Indian economy,

consider the following statements: [UPSC 2. A decrease in tax to GDP ratio of a country
2015] indicates which of the following? [UPSC
1. The rate of growth of Real Gross 2015]
Domestic Product has steadily increased 1. Slowing economic growth rate
in the last decade. 2. Less equitable distribution of national
2. The Gross Domestic Product at market income
prices (in rupees) has steadily increased Select the correct answer using the code given
in the last decade. below.
Which of the statements given above is/are (a) 1 only
correct? (b) 2 only
(a) 1 only (c) Both 1 and 2
(b) 2 only (d) Neither 1 nor 2
(c) Both 1 and 2
(d) Neither 1 nor 2

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3. Increase in absolute and per capita real GNP 4. The problem of international liquidity is
do not connote a higher level of economic related to the non- availability of [UPSC
development, if [UPSC 2018] 2015]
(a) Industrial output fails to keep pace with (a) goods and services
agricultural output. (b) gold and silver
(b) Agricultural output fails to keep pace (c) dollars and other hard currencies
with industrial output. (d) exportable surplus
(c) Poverty and unemployment increase.
(d) Imports grow faster than exports.

CHAPTER 3: FISCAL POLICY

1. There has been a persistent deficit budget year 4. Consider the following statements: [UPSC
after year. Which action/actions of the 2018]
following can be taken by the Government to 1. The Fiscal Responsibility and Budget
reduce the deficit? [UPSC 2015] Management (FRBM) Review
1. Reducing revenue expenditure Committee Report has recommended a
2. Introducing new welfare schemes debt to GDP ratio of 60% for the general
3. Rationalizing subsidies (combined) government by 2023,
4. Reducing import duty comprising 40% for the Central
Select the correct answer using the code given Government and 20% for the State
below. Government.
(a) 1 only (b) 2 and 3 only 2. The Central Government has domestic
(c) 1 and 3 only (d) 1, 2, 3 and 4 liabilities of 21% of GDP as compared to
that of 49% of GDP of the State
Government.
2. If the interest rate is decreased in an economy,
it will [UPSC 2014] 3. As per the Constitution of India, it is
(a) decrease the consumption expenditure in mandatory for a State to take the Central
the economy Government’s consent for raising any
loan if the former owes any outstanding
(b) increase the tax collection of the
Government liabilities to the latter.
(c) increase the investment expenditure in Which of the statements given above is/are
the economy correct?
(d) increase the total savings in the economy (a) 1 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3
3. With reference to Union Budget, which of the
following is/are covered under Non-Plan 5. With reference to the expenditure made by an
Expenditure? [UPSC 2014] organisation or a company, which of the
1. Defence expenditure following statements is/are correct? [UPSC
2. Interest payments 2022]
3. Salaries and pensions 1. Acquiring new technology is capital
expenditure.
4. Subsidies,
2. Debt financing is considered capital
Select the correct answer using the code given
expenditure, while equity financing is
below.
considered revenue expenditure.
(a) 1 only
Select the correct answer using the code given
(b) 2 and 3 only below:
(c) 1, 2, 3 and 4 (a) 1 only (b) 2 only
(d) None (c) Both 1 and 2 (d) Neither 1 nor 2
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6. Which of the following is/are included in the 8. Consider the following statements: [UPSC
capital budget of the Government of India? 2019]
[UPSC 2016] 1. Purchasing Power Parity (PPP) exchange
1. Expenditure on acquisition of assets like rates are calculated by comparing the
roads, buildings, machinery, etc. prices of the same basket of goods and
2. Loans received from foreign services in different countries.
governments 2. In terms of PPP dollars, India is the sixth
3. Loans and advances granted to the States largest economy in the world.
and Union Territories Which of the statements given above is / are
Select the correct answer using the code given correct?
below. (a) 1 only (b) 2 only
(a) 1 only (b) 2 and 3 only (c) Both 1 and 2 (d) Neither 1 nor 2
(c) 1 and 3 only (d) 1, 2 and 3
9. With reference to the Indian economy,
7. Consider the following statements: [UPSC consider the following statements: [UPSC
2019] 2022]
1. Most of India’s external debt is owed by 1. A share of the household financial
governmental entities. savings goes towards government
2. All of India’s external debt is borrowings.
denominated in US dollars. 2. Dated securities issued at market-related
Which of the statements given above is / are rates in auctions form a large component
correct? of internal debt.
(a) 1 only Which of the above statements are correct?
(b) 2 only (a) 1 only
(c) Both 1 and 2 (b) 2 only
(d) Neither 1 nor 2 (c) Both 1 and 2
(d) Neither 1 nor 2

CHAPTER 4: TAXATION

1. The sales tax you pay while purchasing a 2. It will drastically reduce the ‘Current
toothpaste is a [UPSC 2014] Account Deficit’ of India and will enable
(a) tax imposed by the Central Government it to increase its foreign exchange
(b) tax imposed by the Central Government reserves.
but collected by the State Government 3. It will enormously increase the growth
(c) tax imposed by the State Government but and size of the economy of India and will
collected by the Central Government enable it to overtake China in the near
(d) tax imposed and collected by the State future.
Government Select the correct answer using the code given
below:
2. What is/are the most likely advantages of (a) 1 only
implementing ‘Goods and Services Tax (b) 2 and 3 only
(GST)’? [UPSC 2017] (c) 1 and 3 only
1. It will replace multiple taxes collected by (d) 1, 2 and 3
multiple authorities and will thus create a
single market in India.

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3. Consider the following items: [UPSC 2018] 5. With reference to India’s decision to levy an
1. Cereal grains hulled equalization tax of 6% on online
2. Chicken eggs cooked advertisement services offered by non-resident
3. Fish processed and canned entities, which of the following statements
is/are correct? [UPSC 2018]
4. Newspapers containing advertising
material 1. It is introduced as a part of the Income
Tax Act.
Which of the above items is/are exempt under
GST (Goods and Services Tax)? 2. Non-resident entities that offer
advertisement services in India can claim
(a) 1 only (b) 2 and 3 only
a tax credit in their home country under
(c) 1, 2 and 4 only (d) 1, 2, 3 and 4
the “Double Taxation Avoidance
Agreements”.
4. Consider the following statements : [UPSC Select the correct answer using the code given
2017] below:
1. Tax revenue as a percent of GDP of India (a) 1 only
has steadily increased in the last decade.
(b) 2 only
2. Fiscal deficit as a percent of GDP of
(c) Both 1 and 2
India has steadily increased in the last
(d) Neither 1 nor 2
decade.
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

CHAPTER 5: MONETARY POLICY

1. Consider the following statements: [UPSC 2023] 2. Which one of the following activities of the
Statement-I: In the post-pandemic recent past, Reserve Bank of India is considered to be part
many Central Banks worldwide had carried of 'sterilization’? [UPSC 2023]
out interest rate hikes. (a) Conducting 'Open Market Operations'
Statement-II: Central Banks generally assume (b) Oversight of settlement and payment
that they have the ability to counteract the systems
rising consumer prices via monetary policy (c) Debt and cash management for the
means. Central and State Governments
Which one of the following is correct in (d) Regulating the functions of Non-banking
respect of the above statements? Financial Institutions
(a) Both Statement-I and Statement-II are
correct and Statement-II is the correct 3. With reference to Central Bank digital
explanation for Statement-1 currencies, consider the following statements:
(b) Both Statement-I and Statement-II are [UPSC 2023]
correct and Statement-II is not the correct 1. It is possible to make payments in a
explanation for Statement-1 digital currency without using US dollar
(c) Statement-I is correct but Statement-II is or SWIFT system.
incorrect 2. A digital currency can be distributed with
(d) Statement-I is incorrect but Statement-II condition programmed into it such as a
is correct time-frame for spending it.
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Which of the statements given above is/are 7. Consider the following statements: (UPSC
correct? 2014)
(a) 1 only (b) 2 only 1. Tight monetary policy of US Federal
(c) Both 1 and 2 (d) Neither 1 nor 2 Reserve could lead to capital flight.
2. Capital flight may increase the interest
4. With reference to the Indian economy, cost of firms with existing External
consider the following [UPSC 2015] Commercial Borrowings (ECBs).
1. Bank rate 3. Devaluation of domestic currency
2. Open market operations decreases the currency risk associated
3. Public debt with ECBS.
4. Public revenue Which of the statements given above are
Which of the above is/are component/ correct?
components of Monetary Policy? (a) 1 and 2 only
(a) 1 only (b) 2, 3 and 4 (b) 2 and 3 only
(c) 1 and 2 (d) 1, 3 and 4 (c) 1 and 3 only
(d) 1, 2 and 3
5. When the Reserve Bank of India reduces the
Statutory Liquidity Ratio by 50 basis points,
8. The money multiplier in an economy increases
which of the following is likely to happen?
with which one of the following? (UPSC
(UPSC 2015)
2021)
(a) India’s GDP growth rate increases
drastically (a) Increase in the Cash Reserve Ratio in the
(b) Foreign Institutional Investors may bring banks.
more capital into our country (b) Increase in the Statutory Liquidity Ratio
(c) Scheduled Commercial Banks may cut in the banks
their lending rates (c) Increase in the banking habit of the
(d) It may drastically reduce the liquidity to people
the banking system (d) Increase in the population of the country

6. In the context of Indian economy; which of 9. Which of the following statements is/are
the following is/are the purpose/purposes of correct regarding the Monetary Policy
‘Statutory Reserve Requirements’? (UPSC Committee (MPC)? (UPSC 2017)
2014)
1. It decides the RBI’s benchmark interest
1. To enable the Central Bank to control the rates.
amount of advances the banks can create
2. It is a 12-member body including the
2. To make the people’s deposits with
Governor of RBI and is reconstituted
banks safe and liquid
every year.
3. To prevent the commercial banks from
3. It functions under the chairmanship of
making excessive profits
the Union Finance Minister.
4. To force the banks to have sufficient
vault cash to meet their day- to-day Select the correct answer using the code given
requirements below :
Select the correct answer using the code given (a) 1 only
below. (b) 1 and 2 only
(a) 1 only (b) 1 and 2 only (c) 3 only
(c) 2 and 3 only (d) 1, 2, 3 and 4 (d) 2 and 3 only

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10. If the RBI decides to adopt an expansionist 11. What is the importance of the term “Interest
monetary policy, which of the following it Coverage Ratio” of a firm in India? (UPSC
would NOT do? (UPSC 2020) 2020)
1. Cut and optimize the statutory liquidity 1. It helps in understanding the present risk
ratio of a firm that a bank is going to give a
2. Increase the Marginal Standing Facility loan to.
Rate 2. It helps in evaluating the emerging risk of
3. Cut the Bank Rate and Repo Rate a firm that a bank is going to give a loan
Select the correct answer using the code given to.
below: 3. The higher a borrowing firm’s level of
(a) 1 and 2 only Interest Coverage Ratio, the worse is its
(b) 2 only ability to service its debt.
(c) 1 and 3 only Select the correct answer using the code given
below:
(d) 1, 2 and 3
(a) 1 and 2 only (b) 2 only
(c) 1 and 3 only (d) 1, 2 and 3

CHAPTER 6: INFLATION

1. With reference to inflation in India, which of the Select the correct answer using the code given
following statements is correct? (UPSC 2015) below.
(a) Controlling the inflation in India is the (a) 1, 2 and 4 only (b) 3, 4 and 5 only
responsibility of the Government of India (c) 1, 2, 3 and 5 only (d) 1, 2, 3, 4 and 5
only
(b) The Reserve Bank of India has no role in 4. In the ‘Index of Eight Core Industries’, which
controlling the inflation one of the following is given the highest
(c) Decreased money circulation helps in weight? (UPSC 2015)
controlling the inflation (a) Coal production
(d) Increased money circulation helps in (b) Electricity generation
controlling the inflation (c) Fertilizer production
(d) Steel production
2. Which one of the following is likely to be
the most inflationary in its effects? (UPSC 2021)
5. Which of the following brings out the
(a) Repayment of public debt ‘Consumer Price Index Number for Industrial
(b) Borrowing from the public to finance Workers’? (UPSC 2015)
budget deficit (a) The Reserve Bank of India
(c) Borrowing from the banks to finance a (b) The Department of Economic Affairs
budget deficit
(c) The Labour Bureau
(d) Creation of new money to finance a
(d) The Department of Personnel and
budget deficit
Training

3. With reference to Indian economy, demand-

6. With reference to the Indian economy,
pull inflation can be caused/increased by
consider the following statements: (UPSC
which of the following? (UPSC 2021)
2022)
1. Expansionary policies
1. If the inflation is too high, Reserve Bank
2. Fiscal stimulus of India (RBI) is likely to buy
3. Inflation- indexing wages government securities.
4. Higher purchasing power 2. If the rupee is rapidly depreciating, RBI
5. Rising interest rates is likely to sell dollars in the market.

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3. If interest rates in the USA or European 9. With reference to the Indian economy,
Union were to fall, that is likely to induce demand-pull inflation can be caused/increased
RBI to buy dollars. by which of the following? (UPSC 2021)
Which of the statements given above are 1. Expansionary policies
correct? 2. Fiscal stimulus
(a) 1 and 2 only (b) 2 and 3 only 3. Inflation-indexing wages
(c) 1 and 3 only (d) 1, 2 and 3 4. Higher purchasing power
5. Rising interest rates
7. Which one of the following is not the most Select the correct answer using the code given
likely measure the Government/RBI takes to below.
stop the slide of Indian rupee? (UPSC 2019) (a) 1, 2 and 4 only (b) 3, 4 and 5 only
(a) Curbing imports of non-essential goods- (c) 1, 2, 3 and 5 only (d) 1, 2, 3, 4 and 5
and promoting exports
(b) Encouraging Indian borrowers to issue 10. Consider the following statements: (UPSC
rupee denominated Masala Bonds 2021)
(c) Easing conditions relating to external 1. The weightage of food in Consumer
commercial borrowing Price Index (CPI) is higher than that in
(d) Following an expansionary monetary Wholesale Price Index (WPI).
policy. 2. The WPI does not capture changes in the
prices of services, which CPI does.
8. With reference to the India economy, what are 3. The Reserve Bank of India has now
the advantages of “Inflation-Indexed Bonds adopted WPI as its key measure of
(IIBs)”? (UPSC 2022) inflation and to decide on changing the
1. Government can reduce the coupon rates key policy rates.
on its borrowing by way of IIBs. Which of the statements given above is/are
2. IIBs provide protection to the investors correct?
from uncertainty regarding inflation. (a) 1 and 2 only (b) 2 only
3. The interest received as well as capital (c) 3 only (d) 1, 2 and 3
gains on IIBs are not taxable.
Which of the statements given above are
correct?
(a) 1 and 2 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3

CHAPTER 7: BANKING SYSTEM

1. ‘Basel III Accord’ or simply ‘Basel III’, often 2. Consider the following statements: (UPSC
seen in the news, seeks to: (UPSC 2015) 2018)
(a) develop national strategies for the 1. Capital Adequacy Ratio (CAR) is the
conservation and sustainable use of amount that banks have to maintain in the
biological diversity form of their own funds to offset any loss
(b) improve banking sector’s ability to deal that banks incur if the account-holders
with financial and economic stress and fail to repay dues.
improve risk management 2. CAR is decided by each individual bank.
(c) reduce the greenhouse gas emissions but Which of the statements given above is/are
places a heavier burden on developed correct?
countries (a) 1 only
(d) transfer technology from developed
(b) 2 only
countries to poor countries to enable
(c) Both 1 and 2
them to replace the use of
chlorofluorocarbons in refrigeration with (d) Neither 1 nor 2
harmless chemicals

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3. The terms ‘Marginal Standing Facility Rate’ 3. BBB helps the Public Sector Banks in
and ‘Net Demand and Time Liabilities’, developing strategies and capital raising
sometimes appearing in news, are used in plans.
relation to: (UPSC 2014) Select the correct answer using the code given
(a) banking operations below:
(b) communication networking (a) 1 and 2 only
(e) military strategies (b) 2 and 3 only
(d) supply and demand of agricultural (c) 1 and 3 only
products (d) 1, 2 and 3

4. What is/are the facility/facilities the 7. The Chairman of public sector banks are
beneficiaries can get from the services of selected by the: [2019-2022]
Business Correspondent (Bank Saathi) in (a) Banks Board Bureau
branchless areas? (UPSC 2014) (b) Reserve Bank of India
1. It enables the beneficiaries to draw their (c) Union Ministry of Finance
subsidies and social security benefits in (d) Management of concerned bank
their villages. 8. With reference to Urban Cooperative Banks in
2. It enables the beneficiaries in the rural India, consider the following statements:
areas to make deposits and withdrawals. [UPSC-2021)
Select the correct answer using the code given 1. They are supervised and regulated by
below. local boards set up by the State
(a) 1 only Governments.
(b) 2 only 2. They can issue equity shares and
preference shares.
(c) Both 1 and 2
3. They were brought under the purview of
(d) Neither 1 nor 2 the Banking Regulation Act, 1949
through an Amendment in 1996
5. Consider the following statements: (UPSC Which of the statements given above is/are
2022) correct?
1. In India, credit rating agencies are (a) 1 only
regulated by Reserve Bank of India. (b) 2 and 3 only
2. The rating agency popularly known as (c) 1 and 3 only
ICRA is a public limited company.
(d) 1, 2 and 3
3. Brickwork Ratings is an Indian credit
rating agency.
9. What is/are the purpose/purposes of the
Which of the statements given above are
correct? `Marginal Cost of Funds based Lending Rate
(MCLR)’ announced by RBI? [UPSC-2016)
(a) 1 and 2 only
1. These guidelines help improve the
(b) 2 and 3 only
transparency in the methodology
(c) 1 and 3 only followed by banks for determining the
(d) 1, 2 and 3 interest rates on advances.
2. These guidelines help ensure availability
6. With reference to the ‘Banks Board Bureau of bank credit at interest rates which are
(BBB)’, which of the following statements are fair to the borrowers as well as the banks.
correct? [UPSC 2016] Select the correct answer using the code given
1. The Governor of RBI is the Chairman of below.
BBB. (a) 1 only (b) 2 only
2. BBB recommends for the selection of (c) Both 1 and 2 (d) Neither 1 nor 2
heads for Public Sector Banks.

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10. The establishment of ‘Payment Banks’ is 13. Which one of the following statements
being allowed in India to promote financial correctly describes the meaning of legal tender
inclusion. Which of the following statements money? [UPSC-2018)
is/are correct in this context? [UPSC-2016) (a) The money which is tendered in courts of
1. Mobile telephone companies and law to defray the fee of legal cases
supermarket chains that are owned and (b) The money which a creditor is under
controlled by residents are eligible to be compulsion to accept in settlement of his
promoters of Payment Banks. claims
2. Payment Banks can issue both credit (c) The bank money in the form of cheques,
cards and debit cards. drafts, bills of exchange, etc.
3. Payment Banks cannot undertake lending (d) The metallic money in circulation in a
activities. country
Select the correct answer using the code given
below. 14. With reference to the governance of ‘public
sector banking in India, consider the following
(a) 1 and 2 only (b) 1 and 3 only
statements: [UPSC-2018)
(c) 2 only (d) 1, 2 and 3
1. Capital infusion into public sector banks
by the Government of India has steadily
11. The term ‘Core Banking Solutions’ is increased in the last decade.
sometimes seen in the news. Which of the 2. To put the public sector banks in order,
following statements best describes/describe the merger of associate banks with the
this term? [UPSC-2016) parent State Bank of India has been
1. It is a networking of a bank’s branches affected.
which enables customers to operate Which of the statements given above is/are
their accounts from any branch of the correct?
bank on its network regardless of where (a) 1 only (b) 2 only
they open their accounts. (c) Both 1 and 2 (d) Neither 1 nor 2
2. It is an effort to increase RBI’s control
over commercial banks through 15. Which of the following is not included in the
computerization. assets of a commercial bank in India? [UPSC-
3. It is a detailed procedure by which a bank 2019)
with huge non- performing assets is taken (a) Advances
over by another bank. (b) Deposits
Select the correct answer using the code given (e) Investments
below. (d) Money at call and short notice
(a) 1 only (b) 2 and 3 only
(c) 1 and 3 only (d) 1, 2 and 3 16. What was the purpose of Inter-Creditor
Agreement signed by Indian banks and
financial institutions recently? [UPSC-2019)
12. What is the purpose of setting up of Small
(a) To lessen the Government of India’s
Finance Banks (SFBs) in India? [UPSC-2017) perennial burden of fiscal deficit and
1. To supply credit to small business units current account deficit
2. To supply credit to small and marginal (b) To support the infrastructure projects of
farmers Central and State Governments
3. To encourage young entrepreneurs to set (c) To act as independent regulator in case of
up business particularly in rural areas. applications for loans of Rs. 50 crore or
Select the correct answer using the code given more
below: (d) To aim at faster resolution of stressed
assets of Rs. 50 crore or more which are-
(a) 1 and 2 only (b) 2 and 3 only
under consortium lending
(c) 1 and 3 only (d) 1, 2 and 3

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17. With reference to Non-Fungible Tokens 18. Consider the following statements: [UPSC-
(NFTs), consider the following statements: 2022)
[UPSC-2022) 1. In terms of short term credit delivery to
1. They enable the digital representation of the agriculture sector, District Central
physical assets. Cooperative Banks(DCCBs) deliver more
2. They are unique cryptographic tokens credit in comparison to Scheduled
that exist on a blockchain. Commercial Banks and Regional Rural
3. They can be traded or exchanged at Banks.
equivalency and therefore can be used as 2. One of the most important functions of
a medium transactions. of commercial DCCBs is to provide funds to the
Which of the statements given above are Primary Agricultural Credit Societies.
correct? Which of the statements is/are corrects?
(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) 1, 2 and 3 (d) Neither 1 nor 2

CHAPTER 8: BALANCE OF PAYMENTS & EXTERNAL SECTOR

1. With reference to Balance of Payments, which (b) Both Statement-I and Statement-II are
of the following constitutes/constitute the correct and Statement-II is not the correct
Current Account? [UPSC-2014) explanation for Statement-I
1. Balance of trade (c) Statement-I is correct but Statement-II is
2. Foreign assets incorrect
3. Balance of invisibles (d) Statement-I is incorrect but Statement-II
4. Special Drawing Rights is correct
Select the correct answer using the code given
below. 3. Convertibility of rupee implies: [UPSC-2015)
(a) 1 only (a) being able to convert rupee notes into
(b) 2 and 3 gold
(c) 1 and 3 (b) allowing the value of the rupee to be
(d) 1, 2 and 4 fixed by market forces
(c) freely permitting the conversion of rupee
to other currencies and vice versa
2. Consider, the following statements: [UPSC-
2023) (d) developing an international market for
currencies in India
Statement-I: India accounts for 3.2% of global
export of goods.
Statement-II: Many local companies and some 4. With reference to the Indian economy,
foreign companies operating in India have consider the following statements: [UPSC-
taken advantage of India's ‘Production-linked 2022)
Incentive’ scheme. 1. An increase in Nominal Effective
Which one of the following is correct in Exchange Rate (NEER) indicates the
respect of the above statements? appreciation of rupee.
(a) Both Statement-I and Statement-II are 2. An increase in the Real Effective
correct and Statement-II is the correct Exchange Rate (REER) indicates an
explanation for Statement-I improvement in trade competitiveness.

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3. An increasing trend in domestic inflation 8. In the context of India, which of the following
relative to inflation in other countries is factors is/are contributor/ contributors to
likely to cause an increasing divergence reducing the risk of a currency crisis? [UPSC-
between NEER and REER. 2019)
Which of the above statements are correct? 1. The foreign currency earnings of India’s
(a) 1 and 2 only (b) 2 and 3 only IT sector
(c) 1 and 3 only (d) 1, 2 and 3 2. Increasing the government expenditure
3. Remittances from Indians abroad
5. Consider the following statements: The effect Select the correct answer using the code given
of the devaluation of a currency is that it below.
necessarily:" : [UPSC-2021) (a) 1 only
1. Improves the competitiveness of the (b) 1 and 3 only
domestic exports in the foreign markets
(c) 2 only
2. Increase the foreign value of the
(d) 1, 2 and 3
domestic currency
3. Improves the trade balance
9. With reference to the Indian Economy after
Which of the above statements is/are?
the 1991 economic liberalization, consider the
(a) 1 only (b) 1 and 2
following statements: [UPSC-2020)
(c) 3 only (d) 2 and 3
1. Worker productivity (rupees per worker
at 2004-05 prices) increased in urban
6. Which of the following best describes the term areas while it decreased in rural areas.
‘import cover’, sometimes seen in the news?
2. The percentage share of rural areas in the
[UPSC-2016)
workforce steadily increased.
(a) It is the ratio of value of imports to the
3. In rural areas, the growth in the non-farm
Gross Domestic Product of a country
economy increased.
(b) It is the total value of imports of a
4. The growth rate in rural employment
country in a year
decreased.
(c) It is the ratio between the value of
exports and that of imports between two Select the correct answer using the code given
countries below:
(d) It is the number of months of imports that (a) 1and 2 only
could be paid for by a country’s (b) 3 and 4 only
international reserves (c) 3 only
(d) 1, 2 and 4
7. Which of the following has/have occurred in
India after its liberalization of economic 10. Consider the following: [UPSC-2021)
policies in 1991? [UPSC-2017) 1. Foreign currency convertible bonds
1. Share of agriculture in GDP increased 2. Foreign institutional investment with
enormously. certain conditions
2. Share of India’s exports in world trade 3. Global depository receipts
increased.
4. Non-resident external deposits
3. FDI inflows increased.
Which of the above can be included in Foreign
4. India’s foreign exchange reserves
Direct Investments?
increased enormously.
(a) 1, 2 and 3
Select the correct answer using the codes
given below: (b) 3 only
(a) 1 and 4 only (b) 2, 3 and 4 only (c) 2 and 4
(c) 2 and 3 only (d 1, 2, 3 and 4 (d) 1 and 4

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11. With reference to Foreign Direct Investment (b) It is largely non-debt creating capital
in India, which one of the following is flow.
considered its major characteristic ? [UPSC- (c) It is the investment which involves debt-
2020) servicing.
(a) It is the investment through capital (d) It is the instrument made by foreign
instruments essentially in a listed institutional investors in the Government
company. securities.

CHAPTER 9: FINANCIAL MARKETS CAPITAL MARKET & MONEY MARKET

1. In the context of finance, the term ‘beta’ refers (a) Both Statement-I and Statement-II are
to: [UPSC-2023) correct and Statement-II is the correct
(a) the process of simultaneous buying and explanation for Statement-1
selling of an asset from different (b) Both Statement-I and Statement-II are
platforms correct and Statement-II is not the correct
(b) an investment strategy of a portfolio explanation for Statement-1
manager to balance risk versus reward (c) Statement-1 is correct but Statement-II is
(c) a type of systemic risk that arises where incorrect
perfect hedging is not possible (d) Statement-I is incorrect Statement-II is
(d) a numeric value that measures the correct
fluctuations of a stock to changes in the
overall stock market 4. Convertible Bonds, consider the following
statements: [UPSC-2022)
2. Consider the following markets: [UPSC-2023)
1. As there is an option to exchange the
1. Government Bond Market
bond for equity, Convertible Bonds pay a
2. Call Money Market lower rate of interest.
3. Treasury Bill Market
2. The option to convert to equity affords
4. Stock Market
the bondholder a degree of indexation to
How many of the above are included in capital
rising consumer prices.
markets?
Which of the statements given above is/are
(a) Only one
correct?
(b) Only two
(c) Only three (a) 1 only
(d) All four (b) 2 only
(c) Both 1 and 2
3. Consider the following statements: [UPSC- (d) Neither 1 nor 2
2023)
Statement-I: Interest income from the deposits 5. With reference to the Indian economy,
in Infrastructure Investment Trusts (InvITs) consider the following statements : [UPSC-
distributed to their investors is exempted from 2020-2019)
tax, but the dividend is taxable.
1. Commercial Paper is a short-term
Statement-II: InviTs are recognized as
unsecured promissory note.
borrowers under the 'Securitization and
Reconstruction of Financial Assets and 2. Certificate of Deposit is a long- term
Enforcement of Security Interest Act, 2002'. Instrument issued by RBI to a
Which one of the following is correct in corporation.
respect of the above statements? 3. ‘Call Money’ is short-term finance used
for interbank transactions.

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4. “Zero-Coupon Bonds’ are the interest- 2. They are the rupee- denominated bonds
bearing short-term bonds issued by the and are a source of debt financing for the
Scheduled Commercial Banks to public and private sector.
corporations. Select the correct answer using the code given
Which of the statements given above is/are below.
correct? (a) 1 only (b) 2 only
(a) 1 and 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
(b) 4 only
(c) 1 and 3 only 9. What does venture capital mean? [UPSC-
(d) 2, 3 and 4 only 2014)
(a) A short-term capital provided to
6. Which of the following is issued by registered industries
foreign portfolio investors to overseas (b) A long-term start-up capital provided to
investors who want to be part of the Indian new entrepreneurs
stock market without registering themselves
(c) Funds provided to industries at times of
directly? [UPSC-2019-2020)
incurring losses
(a) Certificate of Deposit
(d) Funds provided for replacement and
(b) Commercial Paper
renovation of industries
(c) Promissory Note
10. What is the importance of the term “Interest
(d) Participatory Note Coverage Ratio” of a firm in India? [UPSC-
2020)
7. Consider the following statements: [UPSC- 1. It helps in understanding the present risk
2018) of a firm that a bank is going to give loan
1. The Reserve Bank of India manages and to.
services Government of India Securities 2. It helps in evaluating the emerging risk of
but not any State Government Securities. a firm that a bank is going to give loan to.
3. The higher a borrowing firm’s level of
2. Treasury bills are issued by the
Interest Coverage Ratio, the worse is its
Government of India and there are no
ability to service its debt.
treasury bills issued by the State
Select the correct answer using the code given
Governments. below:
3. Treasury bills offered are issued at a (a) 1 and 2 only (b) 2 only
discount from the par value. (c) 1 and 3 only (d) 1, 2 and 3
Which of the statements given above is/are
correct? 11. Indian Government Bond Yields are
(a) 1 and 2 only influenced by which of the following?
(b) 3 Only [UPSC-2021)
(c) 2 and 3 only 1. Actions of the United States Federal
Reserve
(d) 1, 2 and 3
2. Actions of the Reserve Bank of India
3. Inflation and short-term interest rates
8. With reference to `IFC Masala Bonds’,
Select the correct answer using the code given
sometimes seen in the news, which of the below.
statements given below is/are correct? (a) 1 and 2 only
1. The International Finance Corporation, (b) 2 only
which offers these bonds, is an arm of the (c) 3 only
World Bank. (d) 1, 2 and 3
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CHAPTER 10: REGULATORY BODIES

1. Consider the following statements: [UPSC- 3. In India, the Central Bank’s function as the
2021) “lender of last resort” usually refers to which
1. The Governor of the Reserve Bank of of the following? [UPSC-2021)
India (RBI) is appointed by the Central 1. Lending to trade and industry bodies
Government. when they fail to borrow from other
2. Certain provisions in the Constitution of sources
India give the Central Government the 2. Providing liquidity to the banks having a
right to issue directions to the RBI in the temporary crisis
public interest. 3. Lending to governments to finance
3. The Governor of the RBI draws his budgetary deficits
power from the RBI Act. Select the correct answer using the code given
Which of the above statements are correct? below
(a) 1 and 2 only (a) 1 and 2 (b) 2 only
(b) 2 and 3 only (c) 2 and 3 (d) 3 only
(c) 1 and 3 only
4. With reference to ‘Financial Stability and
(d) 1, 2 and 3
Development Council’, consider the following
statements : [UPSC-2015)
2. In India, which one of the following is 1. It is an organ of NITI Aayog.
responsible for maintaining price stability by 2. It is headed by the Union Finance
controlling inflation? [UPSC-2021) Minister.
(a) Department of Consumer Affairs 3. It monitors macro prudential supervision
(b) Expenditure Management Commission of the economy.
(c) Financial Stability and Development Which of the statements given above is/are
Council correct?
(d) Reserve Bank of India (a) 1 and 2 only (b) 3 only
(c) 2 and 3 only (d) 1, 2 and 3

CHAPTER 11: INTERNATIONAL INSTITUTIONS

1. “Rapid Financing Instrument” and “Rapid 2. They apply to investment measures

Credit Facility” are related to the provisions of related to trade in both goods and
lending by which of the following: [UPSC- services.
2022) 3. They are not concerned with the
(a) Asian Development Bank regulation of foreign investment.
(b) International Monetary Fund Select the correct answer using the code given
(c) United Nations Environment Programme below:
Finance Initiative (a) 1 and 2 only (b) 2 only
(d) World Bank (c) 1 and 3 only (d) 1, 2 and 3

2. With reference to Trade-Related Investment

3. The terms ‘Agreement on Agriculture’,
Measures (TRIMS), which of the following
‘Agreement on the Application of Sanitary
statements is/are correct? [UPSC-2020]
and Phytosanitary Measures’ and Peace
1. Quantitative restrictions on imports by Clause’ appear in the news frequently in the
foreign investors are prohibited. context of the affairs of the: [UPSC-2015]

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(a) Food and Agriculture Organization 8. Which of the following organizations brings
(b) United Nations Framework Conference out the publication known as ‘World
on Climate Change Economic Outlook’? [UPSC-2014]
(a) The International Monetary Fund
(c) World Trade Organization
(b) The United Nations Development
(d) United Nations Environment Programme Programme
(c) The World Economic Forum
4. In the context of which of the following do (d) The World Bank
you sometimes find the terms ' amber box,
blue box and green box’ in the news? [UPSC- 9. Recently, which one of the following
2016] currencies has been proposed to be added to
(a) WTO affairs the basket of the IMF’s SDR? [From Current
Affairs 2015-16]
(b) SAARC affairs
(a) Rouble
(c) UNFCCC affairs
(b) Rand
(d) India-EU negotiations on FTA (c) Indian Rupee
(d) Renminbi
5. India’s ranking in the ‘Ease of Doing Business
Index’ is sometimes seen in the news. Which 10. With reference to the International Monetary
of the following has declared that ranking? and Financial Committee (IMFC), consider
[UPSC-2016] the following statements: [UPSC-2016]
(a) Organization for Economic Cooperation 1. IMFC discusses matters of concern
affecting the global economy and advises
and Development (OECD)
the International Monetary Fund (IMF)
(b) World Economic Forum on the direction of its work.
(c) World Bank 2. The World Bank participates as an
(d) World Trade Organization (WTO) observer in IMFC’s meetings.
6. Which one of the following issues the ‘Global Which of the statements given above is/are
Economic Prospects’ report periodically? correct?
(a) 1 only
[UPSC-2015]
(b) 2 only
(a) The Asian Development Bank
(c) Both 1 and 2
(b) The European Bank for Reconstruction
(d) Neither 1 nor 2
and Development
(c) The US Federal Reserve Bank 11. The term ‘Base Erosion and Profit Shifting’ is
(d) The World Bank sometimes seen in the news in the context of:
[UPSC-2016]
(a) mining operation by multinational
7. ‘Global Financial Stability Report’ is prepared
companies in resource-rich but backward
by the: [UPSC-2016] areas
(a) European Central Bank (b) curbing of the tax evasion by
(b) International Monetary Fund multinational companies
(c) International Bank for Reconstruction (c) exploitation of genetic resources of a
and Development country by multinational companies
(d) lack of consideration of environmental
(d) Organization for Economic Cooperation
costs in the planning and implementation
and Development of developmental projects

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12. Which one of the following links all the 3. India’s exports of services are more than
ATMs in India? [UPSC-2018] its imports of services.
(a) Indian Banks’ Association 4. India suffers from an overall
(b) National Securities Depository Limit trade/current account deficit.
(c) National Payments Corporation of India Which of the statements given above is/are
(d) Reserve Bank of lndia correct ?
(a) 1 and 2 only
13. Gold tranche (Reserve tranche) refers to: (b) 2 and 4 only
[UPSC-2020] (c) 3 only
(a) A loan system of World bank (d) 1, 3 and 4
(b) One of the operations of a central bank
(c) A credit system of WTO granted to its 15. In the context of the Indian economy, non-
members financial debt includes which of the
(d) A credit system grantedby IMF to its following? [UPSC-2020]
members 1. Housing loans owned by household
2. Amounts outstanding on credit cards
14. With reference to the international trade of 3. Treasury Bills.
India at present, which of the following Select the correct answer using the code given
statements is/are correct ? [UPSC-2020] below:
1. India’s merchandise exports are less than (a) 1 only
its merchandise imports.
(b) 1 and 2 only
2. India’s imports of iron and steel,
chemicals, fertilizers and machinery have (c) 3 only
decreased in recent years. (d) 1, 2 and 3

CHAPTER 12: AGRICULTURE

1. Which of the following factors/policies were The Cabinet Committee on Economic Affairs
affecting the price of rice in India in the recent has announced the Minimum Support Price for
past? which of the above?
1. Minimum Support Price (a) 1, 2, 3 and 7 only
2. Government’s trading (b) 2, 4, 5 and 6 only
3. Government’s stockpiling
(c) 1, 3, 4, 5 and 6 only
4. Consumer subsidies
(d) 1, 2, 3, 4, 5 and 7
Select the correct answer using the code given
below:
(a) 1, 2 and 4 only (b) 1, 3 and 4 only 3. Which one of the following best describes the
(c) 2 and 3 only (d) 1, 2, 3 and 4 concept of 'Small Farmer Large Field'?
[UPSC-2023]
2. Consider the following: [UPSC 2018] (a) Resettlement of a large number of
people, uprooted from their countries due
1. Areca nut
to war, by giving them a large cultivable
2. Barley
land which they cultivate collectively and
3. Coffee
share the produce
4. Finger millet
(b) Many marginal farmers in an area
5. Groundnut
organize themselves into groups and
6. Sesamum synchronize and harmonize selected
7. Turmeric agricultural operations

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(c) Many marginal farmers in an area (c) Agricultural Produce (Grading and
together make a contract with a corporate Marking) Act, 1937
body and surrender their land to the (d) Food Products Order, 1956 and Meat and
corporate body for a fixed term for which Food Products Order, 1973
the corporate body makes a payment of
agreed amount to the farmers
7. Under the Kisan Credit Card scheme, short-
(d) A company extends loans, technical
term credit support is given to farmers for
knowledge and material inputs to a
which of the following purposes ? [UPSC-
number of small farmers in an area so
that they produce the agricultural 2020]
commodity required by the company for 1. Working capital for maintenance of farm
its manufacturing process and assets harvesters,
commercial production 2. Purchase of combine tractors and mini
trucks requirements of farm
4. Consider the following statements: [UPSC- 3. Consumption households
2023] 4. Post-harvest expenses
1. The Government of India provides 5. Construction of family house and setting
Minimum Support Price for niger up of village cold storage facility
(Guizotia abyssinica) seeds. Select the correct answer using the code given
2. Niger is cultivated as a Kharif crop. below:
3. Some tribal people in India use niger (a) 1, 2 and 5 only (b) 1, 3 and 4 only
seed oil for cooking.
(c) 2,3,4 and 5 only (d) 1, 2, 3, 4 and 5
How many of the above statements are
correct?
(a) Only one (b) Only two 8. The economic cost of food grains to the Food
Corporation of India is Minimum Support
(c) All three (d) None
Price and bonus (if any) paid to the farmers
plus: [UPSC-2019]
5. Consider the following statements: [UPSC-
(a) transportation cost only
2020]
1. In the case of all cereals, pulses and oil- (b) interest cost only
seeds, the procurement at Minimum (c) procurement incidentals and distribution
Support Prices(MSP) is unlimited in any cost
State/UT of India. (d) procurement incidentals and charges for
2. In the case of cereals and pulses, the godowns
MSP is fixed in any State/UT at a level to 9. What can be the impact of
which the market price will never rise. excessive/inappropriate use of nitrogenous
Which of the statements given above is/are fertilizers in agriculture? [UPSC-2015]
correct ? 1. Proliferation of nitrogen- fixing
(a) 1 only microorganisms in soil can occur.
(b) 2 only 2. Increase in the acidity of soil can take
(c) Both 1 and 2 place
(d) Neither 1 nor 2 3. Leaching of nitrate to the ground-water
can occur.
6. In India, markets in agricultural products are Select the correct answer using the code given
regulated under the [UPSC-2015] below.
(a) Essential Commodities Act, 1955 (a) 1 and 3 only (b) 2 only
(b) Agricultural Produce Market Committee (c) 2 and 3 only (d) 1, 2 and 3
Act enacted by States

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10. What is/are the advantage/advantages of 13. With reference to the cultivation of Kharif
implementing the ‘National Agriculture crops in India in the last five years, consider
Market’ scheme? [UPSC-2017] the following statements: [UPSC-2019]
1. It is a pan-India electronic trading portal 1. Area under rice cultivation is the highest.
for agricultural commodities. 2. Area under the cultivation of jowar is
2. It provides the farmers access to more than that of oilseeds.
nationwide market, with prices 3. Area of cotton cultivation is more than
commensurate with the quality of their that of sugarcane.
produce. 4. Area under sugarcane cultivation has
Select the correct answer using the code given steadily decreased.
below : Which of the statements given above are
(a) 1 only correct?
(b) 2 only (a) 1 and 3 only
(c) Both 1 and 2 (b) 2, 3 and 4 only
(d) Neither 1 nor 2 (c) 2 and 4 only
(d) 1, 2, 3 and 4
11. Which of the following practices can help in
water conservation in agriculture? [UPSC- 14. In India, which of the following can be
2017] considered as public investment in
1. Reduced or zero tillage of the land agriculture? [UPSC-2020]
2. Applying gypsum before irrigating the 1. Fixing Minimum Support Price for
field agricultural produce of all crops.
3. Allowing crop residue to remain in the 2. Computerization of Primary Agricultural
field Credit Societies.
Select the correct answer using the code given 3. Social Capital Development.
below : 4. Free Electricity supply to farmers.
(a) 1 and 2 only 5. Waiver of agricultural loans by the
banking system.
(b) 3 only
6. Setting up of cold storage facilities by the
(c) 1 and 3 only
government.
(d) 1, 2 and 3
Select the correct answer using the code given
below:
12. Consider the following statements: [UPSC-
(a) 1, 2 and 5 only
2018]
(b) 1, 3, 4 and 5 only
1. The quantity of imported edible oils is
(c) 2, 3 and 6 only
more than the domestic production of
(d) 1, 2, 3, 4, 5 and 6
edible oils in the last five years.
2. The Government does not impose any
customs duty on all the imported edible 15. Fair and Remunerative Price of Sugarcane is
approved by: [UPSC-2015]
oils as a special case.
(a) Cabinet Committee on Economic Affairs
Which of the statements given above is/are
correct? (b) Commission for Agricultural Costs and
Prices
(a) 1 only
(c) Directorate of Marketing and Inspection,
(b) 2 only
Ministry of Agriculture
(c) Both 1 and 2
(d) Agricultural Produce Marketing
(d) Neither 1 nor 2 Committee

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16. Among the agricultural commodities imported (d) Identifying the entrepreneurs in village
by India, which one of the following accounts and providing them technology and
for the highest imports in terms of value in the finance to set up seed companies
last five years? [UPSC-2019]
(a) Spices 18. As per the NSSO 70th Round “Situation
(b) Fresh fruits Assessment Survey of Agriculture
(c) Pulses Household”, consider the following
(d) Vegetable oils statements: [UPSC-2018]
1. Rajasthan has the highest percentage
17. Which one of the following best describes the share of agricultural household among its
main objective of ‘Seed Village Concept? rural household.
[UPSC-2015] 2. Out of the total agricultural household in
(a) Encouraging the farmers to use their own the country, a little over 60 percent
farm seeds and discouraging them to buy belong to OBCs.
the seeds from others 3. In Kerala, a little over 60 percent of
(b) Involving the farmers for training in agricultural household reported to have
quality seed production and thereby to received maximum income from sources
make available quality seeds to others at other than agricultural activities.
appropriate time and affordable cost. Which of the statements given above is/are
(c) Earmarking some villages exclusively for correct?
the production of certified seeds. (a) 2 and 3 only (b) 2 only
(c) 1 and 3 only (d) 1, 2 and 3

CHAPTER 13: POVERTY

1. With reference to the provisions made under Which of the statement given above is/are
the National Food Security Act, 2013, correct?
consider the following statements: [UPSC- (a) 1 and 2 (b) 2 only
2018] (c) 1 and 3 (d) 3 only
1. The families coming under the category
of ‘below poverty line (BPL)’ only are 2. In a given year in India, official poverty lines
eligible to receive subsidies food grains. are higher in some States than in others
2. The eldest woman in a household, of age because: [UPSC-2019]
18 years or above, shall be the head of (a) poverty rates vary from State to State
the household for the purpose of issuance
(b) price levels vary from State to State
of a ration card.
(c) Gross State Product varies from State to
3. Pregnant women and lactating mothers
State
are entitled to a ‘take-home ration’ of
(d) quality of public distribution varies from
1600 calories per day during pregnancy
State to State
and for six months thereafter

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CHAPTER 14: EMPLOYMENT

1. In India, which one of the following compiles Which of the statements given above is / are
information on industrial disputes, closures, correct?
retrenchments and lay- offs in factories (a) 1 only (b) 2 only
employing workers? [UPSC-2022]
(c) Both 1 and 2 (d) Neither 1 nor 2
(a) Central Statistics Office
(b) Department for Promotion of Industry
and Internal Trade 4. With reference to casual workers employed in
(c) Labour Bureau India, consider the following statements:
(d) National Technical Manpower [UPSC-2021]
Information System 1. All casual workers are entitled for
Employees Provident Fund coverage.
3. Consider the following statements: As per the 2. All casual workers are entitled for regular
Industrial Employment (Standing Orders) working hours and overtime payment.
Central (Amendment) Rules, 2018: [UPSC- 3. The government can by a notification
2019] specify that an establishment or industry
1. If rules for fixed-term employment are shall pay wages only through its bank
implemented, it becomes easier for the account.
firms/companies to layoff workers. Which of the above statements are correct?
2. No notice of termination of employment
(a) 1 and 2 only (b) 2 and 3 only
shall be necessary in the case of
temporary workman. (c) 1 and 3 only (d) 1, 2 and 3

CHAPTER 15: MISCELLANEOUS

1 Consider the following statements: [UPSC-2023] 2. All bank loans to the Micro, Small and
1. The Self-Help Group (SHG) programme Medium Enterprises qualify under the
was originally initiated by the State Bank priority sector.
of India by providing microcredit to the Which of the statements given above is/are
financially deprived. correct?
2. In an SHG, all members of a group take (a) 1 only (b) 2 only
responsibility for a loan that an (c) Both 1 and 2 (d) Neither 1 nor 2
individual member takes.
3. The Regional Rural Banks and Scheduled 4. Consider the following heavy industries:
Commercial Banks support SHGs. [UPSC-2023]
How many of the above statements are 1. Fertilizer plants
correct? 2. Oil refineries
(a) Only one (b) Only two 3. Steel plants
(c) All three (d) None Green hydrogen is expected to play a
significant role in decarbonizing how many of
2. Consider the following statements with the above industries?
reference to India : [UPSC-2023] (a) Only one (b) Only two
1. According to the ‘Micro, Small and (c) All three (d) None
Medium Enterprises Development
(MSMED) Act, 2006, the ‘medium 5. Consider the following statements: [UPSC-
enterprises’ are those with investments in 2023]
plant and machinery between `15 crore Statement-I: Carbon markets are likely to be
and `25 crore. one of the most widespread tools in the fight
against climate change.
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 PRELIMS PYQs Content - (Economy)
Statement-II: Carbon markets transfer 9. With reference to Ayushman Bharat Digital
resources from the private sector to the State. Mission, consider the following statements:
Which one of the following is correct in [UPSC-2022]
respect of the above statements? 1. Private and public hospitals must adopt it.
(a) Both Statement-I and Statement-II are 2. As it aims to achieve universal health
correct and Statement-II is the correct coverage, every citizen of India should be
explanation for Statement-I part of it ultimately.
(b) Both Statement-I and Statement-II are 3. It has seamless portability across the
correct and Statement-II is not the correct country.
explanation for Statement-I
Which of the statements given above is/are
(c) Statement-I is correct but Statement-II is
correct?
incorrect
(a) 1 and 2 only
(d) Statement-I is incorrect but Statement-II
is correct (b) 3 only
(c) 1 and 3 only
6. The main objective of the 12th Five-Year Plan (d) 1, 2 and 3
is: [UPSC-2014]
(a) inclusive growth and poverty reductions 10. If another global financial crisis happens in
(b) inclusive and sustainable growth the near future, which of the following
(c) sustainable and inclusive growth to actions/policies are most likely to give some
reduce unemployment immunity to India? [UPSC-2020]
(d) faster, sustainable and more inclusive 1. Not depending on short-term foreign
growth. borrowings
2. Opening up to more foreign banks
7. Which of the following are associated with 3. Maintaining full capital account
'Planning' in India? [UPSC-2014] convertibility
1. The Finance Commission Select the correct answer using the code given
2. The National Development Council below:
3. The Union Ministry of Rural (a) 1 only
Development (b) 1 and 2 only
4. The Union Ministry of Urban (c) 3 only
Development (d) 1, 2 and 3
5. The Parliament
Select the correct answer using the code given 11. Which of the following statements is/are
below. correct regarding National Innovation
(a) 1, 2 and 5 only (b) 1, 3 and 4 only Foundation-India (NIF)? [UPSC-2015]
(c) 2 and 5 only (d) 1, 2, 3, 4 and 5 1. NIF is an autonomous body of the
Department of Science and Technology
8. Which of the following activities constitute under the Central Government
real sector in the economy? [UPSC-2022] 2. NIF is an initiative to strengthen the
1. Farmers harvesting their crops highly advanced scientific research in
2. Textile mills converting raw cotton into India’s premier scientific institutions in
fabrics collaboration with highly advanced
3. A commercial bank lending money to a foreign scientific institutions.
trading company Select the correct answer using the code given
4. A corporate body issuing Rupee below.
Denominated Bonds overseas (a) 1only (b) 2 only
(a) 1 and 2 only (b) 2, 3 and 4 only (c) Both 1 and 2 (d) Neither 1 nor 2
(c) 1, 3 and 4 only (d) 1, 2, 3 and 4

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 PRELIMS PYQs Content - (Economy)
12. The substitution of steel for wooden ploughs 16. With reference to ‘National Investment and
in agricultural production is an example of: Infrastructure Fund’, which of the following
[UPSC-2022] statements is/are correct? [UPSC-2017]
(a) labour-augmenting technological progress 1. It is an organ of NITI Aayog.
(b) capital-augmenting technological progress 2. It has a corpus of Rs. 4, 00,000 crore at
(c) capital-reducing technological progress present.
(b) None of the above Select the correct answer using the code given
below:
(a) 1 only (b) 2 only
13. With reference to the ‘Prohibition of Benami
Property Transactions Act, 1988 (PBPT Act)’, (c) Both 1 and 2 (d) Neither 1 nor 2
consider the following statements: [UPSC-
2017] 17. Consider the following statements: [UPSC-
1. A property transaction is not treated as a 2017]
benami transaction if the owner of the 1. National Payments Corporation of India
property is not aware of the transaction. (NPCI) helps in promoting financial
inclusion in the country.
2. Properties held benami are liable for
confiscation by the Government. 2. NPCI has launched RuPay, a card
payment scheme.
3. The Act provides for three authorities
for investigations but does not provide Which of the statements given above is/are
for any appellate mechanism. correct?
(a) 1 only (b) 2 only
Which of the statements given above is/are
correct? (c) Both 1 and 2 (d) Neither 1 nor 2
(a) 1 only (b) 2 only
(c) 1 and 3 only (d) 2 and 3 only 18. Which of the following best describes the term
“Merchant Discount Rate” sometimes seen in
news? [UPSC-2018]
14. The term ‘Domestic Content Requirement’ is (a) The incentive given by a bank to a
sometimes seen in the news with reference to: merchant for accepting payments through
[UPSC-2017] debit cards pertaining to that bank.
(a) Developing solar power production in (b) The amount paid back by banks to their
our country customers when they use debit cards for
(b) Granting licences to foreign T.V. financial transactions for purchasing
channels in our country goods or services.
(c) Exporting our food products to other (c) The charge to a merchant by a bank for
countries accepting payments from his customers
(d) Permitting foreign educational through the bank’s debit cards.
institutions to set up their campuses in (d) The incentive given by the Government
our country to merchants for promoting digital
payments by their customers through
15. Consider the following statements: [UPSC-2017] Point of Sale (PoS) machine and debit
cards
1. The Standard Mark of Bureau of Indian
Standards (BIS) is mandatory for
automotive tyres and tubes. 19. With reference to solar power production in
India, consider the following statements:
2. AGMARK is a quality Certification
[UPSC-2018]
Mark issued by the Food and Agriculture
Organisation (FAO). 1. India is the third largest in the world in
the manufacture of silicon wafers used in
Which of the statements given above is/are
photovoltaic units.
correct?
2. The solar power tariffs are determined by
(a) 1 only (b) 2 only the Solar Energy Corporation of India.
(c) Both 1 and 2 (d) Neither 1 nor 2

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 PRELIMS PYQs Content - (Economy)
Which of the statements given above is/are (c) Increase in tax rates accompanied by
correct? reduction of interest rate
(a) 1 only (b) 2 only (d) Reduction of expenditure on public
(c) Both 1 and 2 (d) Neither 1 nor 2 projects

20. The Service Area Approach was implemented 26. Which one of the following effects of creation
under the purview of: [UPSC-2019] of black money in India has been the main
(a) Integrated Rural Programme cause of worry to the Government of India?
(b) Lead Bank Scheme (a) Diversion of resources to the purchase of
real estate and investment in luxury
(c) Mahatma Gandhi National Rural
housing
Employment Guarantee Scheme
(b) Investment in unproductive activities and
(d) National Skill Development Mission
purchase of precious stones, jewellery,
gold, etc.
21. Consider the following statements: The (c) Large donations to political parties and
Reserve Bank of India’s recent directives growth of regionalism
relating to ‘Storage of Payment System Data’, (d) Loss of revenue to the State Exchequer
popularly known as data diktat, command the due to tax evasion
payment system providers that: [UPSC-2019]
1. they shall ensure that entire data relating
27. With reference to India, consider the
to payment systems operated by them
following statements: [UPSC-2021]
are stored in a system only in India
1. Retail investors through demat account
2. they shall ensure that the systems are can invest in ‘Treasury Bills’ and
owned and operated by public sector ‘Government of India Debt Bonds’ in
enterprises primary market.
3. they shall submit the consolidated system 2. The Negotiated Dealing System Order
audit report to the Comptroller and Matching’ is a government securities
Auditor General of India by the end of trading platform of the Reserve Bank of
the calendar year India.
Which of the statements given above is/are 3. The ‘Central Depository Services Ltd.’ is
correct? jointly promoted by the Reserve Bank of
(a) 1 only (b) 1 and 2 only India and the Bombay Stock Exchange.
(c) 3 only (d) 1, 2 and 3 Which of the statements given above is/are
correct?
22. If you withdraw 1,00,000 from your in cash from (a) 1 only (b) 1 and 2
your Demand Deposit Account at your bank, the (c) 3 only (d) 2 and 3
immediate effect on aggregate money supply in
the economy will be: [UPSC-2020] 28. With reference to foreign-owned e- commerce
(a) To reduce it by 1,00,000 firms operating in India, which of the
(b) To increase it by 1,00,000 following statements is/are correct? [UPSC-
(c) To increase it by more 2022]
(d) To leave it unchanged 1. They can sell their own goods in addition
to offering their platforms as market-
places.
23. Which among the following steps is most
2. The degree to which they can own big
likely to be taken at the time of an economic sellers on their platforms is limited.
recession? [UPSC-2021]
Select the correct answer using the code given
(a) Cut in tax rates accompanied by increase below:
in interest rate
(a) 1 only (b) 2 only
(b) Increase in expenditure on public projects
(c) Both 1 and 2 (d) Neither 1 nor 2

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