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@UPSC_THOUGHT
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DISHA PUBLICATION
ALL RIGHTS RESERVED
© Copyright Publisher
No part of this publication may be reproduced in any form without
prior permission of the publisher. The author and the publisher do not
take any legal responsibility for any errors or misrepresentations that
might have crept in. We have tried and made our best efforts to
provide accurate up-to-date information in this book.
Index
ECONOMY D -1 –
D-86
1.
Micro-Macro Economics 1-8
3. Indian Economy 30 - 62
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• Agriculture Sector
@UPSC_THOUGHT
5. World Economy/Miscellaneous 70 - 86
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(a) Electricity
(b) National Defence
(c) Light House
(d) Public Parks
11. What is meant by price discrimination? [CDS-2015-II]
(a) Increase in price of a commodity over time
(b) A situation where the same product is sold to different consumers for
different prices
(c) Subsidization of a product by the Government to sell it at a lower price
(d) General decrease in price of a commodity over time
12. What is meant by ‘Public Good’? [CDS-2015-II]
@UPSC_THOUGHT
(a) Dumping
(b) Hedging
(c) Discounting
(d) Deflating
(d) Fluctuate
31. In the paralance of economy / commerce, what is ‘Gilt-edged market’?
(a) Gold and Silver market
(b) Industrial securities market
(c) Market of safe securities
(d) Market of software technology products
32. Inflation in India is measured on which of the following indexes /
indicators?
(a) Cost of Living Index (CLI)
(b) Consumer Price Index (CPI)
(c) Gross Domestic Product (GDP)
@UPSC_THOUGHT
(b) Reflation
(c) Inertial inflation
(d) Inflation hedge
49. Gilt-edged market means
(a) Market of government securities
(b) Bullion market
(c) Market dealing with metals
(d) Market dealing with exports
50. Which of the following is included in M1?
(a) gold
(b) checkable deposits
(c) stock
(d) credit cards
51. Which of the following is not seen as an advantage of the gold
standard?
(a) For a given stock of gold, a rise in real money supply can only occur if
the price level declines.
(b) Inflation is unlikely to emerge as a significant problem.
(c) No country needs to serve at the centre of this fixed exchange rate
system.
(d) The monetary mechanism has credibility.
52. A rapid increase in the rate of inflation is sometimes attributed to the
base effect. What is base effect?
(a) It is the impact of drastic deficiency in supply due to failure of crops.
(b) It is the impact of the surge in demand due to rapid economic growth.
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(c) It is the impact of the price levels of previous year on the calculation of
inflation rate.
(d) None of the statements given above is correct.
53. A ‘closed economy’ is an economy in which
(a) the money supply is fully controlled.
(b) deficit financing takes place.
(c) only exports take place.
(d) neither exports nor imports take places.
54. Many times we read a term “Free Market” in newspapers. What does it
mean?
1. It is a market where pricing is driven by the laws of supply and demand.
@UPSC_THOUGHT
following? [CDS-2008-II]
(a) Self Regulatory Organisations
(b) Small Revenue Operators
(c) Securities Roll-back Operators
(d) Securities Regulatory Organisations
58. In a perfectly competitive economy production and consumption will
both be Pareto optimal, if the economy operates at a point
where [CDS-2013-II]
(a) there is general equilibrium
(b) output levels are below equilibrium
(c) output levels are above equilibrium
(d) consumption is less than output
59. The production function of a firm will change
whenever [CDS-2013-II]
(a) input price changes
(b) the firm employs more of any input
(c) the firm increases its level of output
(d) the relevant technology changes
60. Which one among the following pairs is not correctly matched
? [CDS-2014-II]
(a) When total product : Marginal
increases at an product
increasing rate increases
(b) When total product : Marginal
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increases at a product
diminishing rate , declines
(c) When total product : Marginal product
reaches its maximum becomes zero
(d) When total product : Marginal product
begins to decline becomes positive
61. The way total output changes due to change in all inputs in same
proportion is known as law of [CDS-2014-II]
(a) Returns to scale
(b) Diminishing returns
@UPSC_THOUGHT
weightage for food is 57% in CPI items which captures the impact
of food prices better. Further, wholesale prices do not take into
account the substantial margins at the retail level, which tend to
rise when there are shortages.
8. (a) An increase in purchase by the federal Gov. causes the aggregate
demand curve to shift to the right.
9. (b) The Laffer Curve says that, if marginal tax rates fall, tax revenues
will rise, and the budget deficit will decrease.
Supply side economics is a macro economic theory that gives
economic growth can be most effectively created by investing in
capital and by lowering barriers on the production of goods and
@UPSC_THOUGHT
services.
10. (a) Electricity is not public good but it is club good including roads,
bridges, gas, sewage, wires, telecom.
11. (b) When different consumers pay different prices for the same
product, this situation is known as price discrimination.
12. (b) Public good means a commodity or service which is given
without profit to everyone in a society by government or any
organisation.
13. (a) Generally Kerosene is used as fuel by the poor, as they get
prosperity, they use little of this fuel.
14. (a) Brent Crude is a major trading classification of sweet light crude
oil that serves as a major benchmark price for purchases of oil
worldwide. Brent Crude is extracted from the North Sea and
comprises Brent Blend, Forties Blend, Oseberg and Ekofisk
crudes .The Brent Crude oil marker is also known as Brent Blend,
London Brent and Brent petroleum. The index represents the
average price of trading in the 25 day Brent Blend, Forties,
Oseberg, Ekofisk (BFOE) market in the relevant delivery month
as reported and confirmed by the industry media.
15. (a) In the short run insurance premium are fixed costs because they
are independent of the level of production.
16. (b) Inferior goods have a negative(less than 0) income elasticity of
demand meaning that demand falls as income rises.
17. (a) Total fixed costs are constant, so the average fixed cost curve
diminishes with the output. Thus, the average fixed cost curve is a
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rectangular hyperbola.
18. (a) When marginal cost is less than average cost, average cost must
be falling. When marginal cost exceeds average cost must be
rising. The marginal cost and average cost curves are related to
each other.
19. (d)
20. (d)
21. (d) The demand for a commodity at a given price is the quantity that
will be purchased at a unit of time and at a unit price. Demand has
the following features; Demand refers to the quantity at a given
price, Demand must be defined per unit time.
@UPSC_THOUGHT
22. (b) When the curve slopes downwards from left to right; higher prices
reduce the quantity demanded.
23. (b) When the price level rises, each unit of currency buys fewer
goods and services.So rise in the price of a commodity means fall
in the value of currency only.
24. (d)
25. (a) Fiscal stimulus - Government measures, normally involving
increased public spending and lower taxation are aimed at giving
a positive jolt to economic activity.
26. (b) Hedging is used in limiting or offsetting probability of loss from
fluctuations in the prices of commodities, currencies or securities.
27. (d) Inflation is increased in the prices of commodities. It is caused
due to decrease in supply and increase in demand of commodities.
So when money supply in the economy increases it means people
have more purchasing capacity and thus demand increases which
results in inflation .
Some factors affecting inflationary pressure.
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@UPSC_THOUGHT
41. (a) In India, inflation is measured by the wholesale price Index . The
wholesale prices of commodities of base year are compared with
wholesale prices of current year to compute inflation.
42. (b) Inflation redistributes wealth from creditors to debtors i.e., lenders
suffer and borrowers benefit out of inflation. Bond holders = this
person has lend money (to debtors) and received bond in return.
So he is lender, he suffers, by the way they haven’t specifically
used the word – “inflation indexed bonds”, hence we cannot say
inflation benefits the bond-holders.
43. (a) When economic development takes place, specialisation
increases. Economic development typically involves
@UPSC_THOUGHT
52. (c) The base effect relates to inflation in the corresponding period of
the previous year: If the inflation rate was too low in the
corresponding period of the previous year, even a smaller rise in
the price index will arithmetically give a high rate of inflation.
53. (d) This is an economy that does not interact with the economy of any
other country. A closed economy prohibits imports and exports
and prohibits any other country from participating in their stock
market.
54. (d)
55. (a) Investment in capital and labour will increase productivity and
production which will cause either rise in wages or creation of
@UPSC_THOUGHT
(b) 1 and 2
(c) 2 only
(d) 1, 2 and 3
10. In India, deficit financing is used for raising resources for:
1. redemption of public debt
2. adjusting the balance of payments
3. reducing the foreign debt
4. economic development
Which of the above statements is/are correct ?
(a) 4 only
(b) None of the above
@UPSC_THOUGHT
A B C D
(a) 3 1 2 4
(b) 4 3 2 1
(c) 1 3 2 4
(d) 3 1 4 2
13. Which of the following is / are the example (s) of Transfer
Payment(s)?
1. Unemployment Allowance
@UPSC_THOUGHT
2. Payment of salary
3. Social Security Payment
4. Old age Pension
Select the correct answer using the code given
below: [CDS-2016-I]
(a) 1 and 3 only
(b) 1, 2 and 3 only
(c) 1, 3 and 4 only
(d) None of the above
14. Consider the following statements about Sinking
Fund [CDS-2011-II]
1. It is a method of repayment of public debt.
2. It is created by the government out of budgetary revenues every year.
Which of the statements given above is/are contact?
(a) Oniy 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
15. Statement I: Deficit financing does not lead to inflation if adopted in
small doses.
Statement II: Deficit financing is an often used tool for financing
budgetary deficits. [CDS-2011-II]
Codes :
(a) Both the Statements are individually true and Statement II is the correct
explanation of Statement
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(b) Both the Statements are individually true, but Statement II is not the
correct explanation of Statement I
(c) Statement I is true, but Statement II is lalse
(d) Statement I is false, but Statement II is true
16. The concept which tries to ascertain the actual deficit in the revenue
account after adjusting for expenditure of capital nature is termed
as [CDS-2013-I]
(a) revenue deficit
(b) effective revenue deficit
(c) fiscal deficit
(d) primary deficit
@UPSC_THOUGHT
22. The first phase of liberalization was initiated in India under the
regime of— [UK-PSC 2016]
(a) Rajiv Gandhi
(b) P.V. Narsimha Rao
(c) Atal Bihari Vajapayee
(d) H.D. Dev Gowda
(c) 4 only
(d) 3 and 1 only
25. Which of the following is associated with fiscal policy?
(a) Inflation
(b) Taxation
(c) Consumption
(d) Money supply
26. ‘Fiscal Drag’ expresses the impact of inflation on which of the
following ?
(a) Fiscal Deficit
(b) Tax Revenue and GDP
@UPSC_THOUGHT
33. PAN card issued by the Income Tax Department can’t be used for
which of the following purpose?
(a) proof of address
(b) proof of identity
(c) proof of registered tax payer
(d) proof of date of birth
34. Which one of the following agencies assigns the Agricultural Income
Tax to states in India?
(a) Inter – State council
(b) National Development Council
(c) Agriculture Finance Corporation
@UPSC_THOUGHT
2. subsidies
3. macro-economic policies
4. grants
Select the correct answer using the codes given below
(a) 1, 2, 3 and 4
(b) 1, 2 and 4
(c) 1, 2 and 3
(d) 3 and 4
45. Which of the following are included in the category of direct tax in
India? [CDS-2013-I]
1. Corporation tax
2. Tax on income
3. Wealth tax
4. Customs duty
5. Excise duty
Select the correct answer using the codes given below
(a) 1, 2 and 3
(b) 1, 2, 4 and 5
(c) 2 and 3
(d) 1, 3, 4 and 5
46. In India, the price of petroleum products has been deregulated mainly
to [CDS-2013-II]
(a) reduce the burden of subsidies given to the oil companies
(b) discourage the exploration of oil reserves in the country
(c) discourage the demand for private vehicles
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54. With a view to redress the grievances of tax payers speedily, Income
Tax department has started a new electronic platform which is known
as— [UBI-PO 2016]
(a) e-grievances
(b) e-IT
(c) e-bharat
(d) e-nivaran
55. Consider the following taxes— [UGC-2016]
(i) Corporation tax
(ii) Income tax
(iii) Service tax
(iv) Union Excise Duties
Which of the following correclty describes their contribution, in descending
order of importance, to the Central Government’s Gross Tax Revenue?
(a) (i) (ii) (iv) (iii)
(b) (ii) (i) (iii) (iv)
(c) (iii) (ii) (i) (iv)
(d) (iv) (i) (ii) (iii)
56. If Sales tax on a commodity is raised, but the revenue earned through
its sale decrease sharply, which one of the following statements about
the nature of this commodity would be correct?
[UGC-2016]
(a) Price elasticity of demand for it is unity
(b) It must be an essential goods
(c) Price elasticity of demand for it is high
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(d) 1, 2 and 4
58. Which of the following Tax is levied by Union and collected and
appropriated by States? [BPSC 2017]
(a) Stamp Duties
(b) Passenger and Goods Tax
(c) Estate Duty
(d) Taxes on Newspapers
59. What is/are the most likely advantages of implementing ‘Goods and
Services Tax (GST)’?
1. It will replace multiple taxes collected by multiple authorities and will
thus create a single market in India.
2. It will drastically reduce the ‘Current Account Deficit’ of India and will
enable it to increase its foreign exchange reserves.
3. It will enormously increase the growth and size of economy of India
and will enable it to overtake China in the near future.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
60. With reference to the ‘Prohibition of Benami Property Transactions
Act, 1988 (PBPT Act)’, consider the following statements:
1. A property transaction is not treated as a benami transaction if the
owner of the property is not aware of the transaction.
2. Properties held benami are liable for confiscation by the Government.
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3. The Act provides for three authorities for investigations but does not
provide for any appellate mechanism.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) 1 and 3 only
(d) 2 and 3 only
61. Consider the following statements:
1. Tax revenue as a per cent of GDP of India has steadily increased in the
last decade.
2. Fiscal deficit as a per cent of GDP of India has steadily increased in the
@UPSC_THOUGHT
last 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
month?
(a) 1990
(b) 1991
(c) 1994
(d) 1999
68. The one rupee note bears the signature of the
(a) Secretary, Ministry of Finance
(b) Governor, RBI
(c) Finance Minister
(d) None of these
69. Which of the following is not true when the interest rate in the
economy goes up?
(a) Saving increases
(b) Lending decreases
(c) Cost of production increases
(d) Return on capital increases
70. High rates of interest in a low inflation region
(a) attract people to make an investment
(b) discourage people to make an investment
(c) create atmosphere for capital formation
(d) are not favourable for credit expansion
71. The banks are required to maintain a certain ratio between their cash in
hand and total assets. This is called
(a) Statutory Bank Ratio (SBR)
(b) Statutory Liquid Ratio (SLR)
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(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
77. Which of the following activities can lead to financial inclusion in
India?
(1) Issuing of general purpose credit cards.
(2) Strict know your customer’ (KYC) norms
(3) Opening of Bank branches in unbanked rural areas.
(4) Opening of no-frills account.
Select the correct answer using the codes given below :
(a) 1, 2 and 3 only
@UPSC_THOUGHT
(d) 1, 2, 3 and 4
82. Which of the following statements is/are correct in regard to ‘micro-
finance’?
(1) Micro-credit extended by banks to individual is reckoned as a part of
their priority sector lending.
(2) RBI has prescribed a particular model the banks to provide micro-
finance.
Choose the correct answer using the codes given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
83. Consider the following statements in regard to devaluation and
depreciation of a currency:
(1) Devaluation is an activity conducted by central government whereas
depreciation happens due to market forces.
(2) In both the devaluation and depreciation currency loses value against
other currencies in a floating currency exchange market.
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
84. Consider the following statements in regard to ‘Marginal Standing
Facility (MSF)’ of RBI :
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(1) It will help in reducing volatility in the overnight lending rates in the
inter-bank market.
(2) The borrowing under the MSF should be over and above the statutory
liquidity requirement.
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
85. ‘Basel III’ norms target at which of the following?
(1) Improve the banking sector’s ability to absorb shocks arising from
@UPSC_THOUGHT
(iv) Cash reserve ratio: minimum percentage of cash deposits that banks
must keep with itself to avoid liquidity issues.
(a) (i) & (ii)
(b) (ii), (iii) & (iv)
(c) (ii) & (iv)
(d) (iii) & (iv)
88. Which of the following grants/grant direct credit assistance to rural
households ?
1. Regional Rural Banks
2. National Bank for Agriculture and Rural Development
3. Land Development Banks
@UPSC_THOUGHT
4. Currency
The correct sequence of these decreasing orders of Liquidity is:
(a) 1-4-3-2
(b) 4-3-2-1
(c) 2-3-1-4
(d) 4-1-3-2
92. In the context of Indian economy; which of the following is/are the
purpose/purposes of ‘Statutory Reserve Requirements’?
1. To enable the Central Bank to control the amount of advances the banks
can create
2. To make the people’s deposits with banks safe and liquid
@UPSC_THOUGHT
India.
1. Cooperative Banks operate on no profit no loss basis.
2. Cooperative Banks are allowed to operate only in the agriculture sector.
3. NABARD is a Cooperative Bank.
(a) 1 only
(b) 1 and 2
(c) 1 and 3
(d) All of these
99. Consider the following statements :
1. Regional Rural Banks grant direct loans and advances to marginal
farmers and rural artisans.
2. NABARD is responsible for laying down policies and to oversee the
operations of the RRBs.
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
100. In India ‘Report on Currency and Finance’ is the annual publication of
(a) SEBI
(b) RBI
(c) Finance Commission
(d) Finance Ministry
101. How many seats of Deputy Governor are there in Reserve Bank of
India?
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(a) 1 only
(b) 2 only
(c) 3 only
(d) 4 only
102. Who is the new Chairman of Life Insurance Corporation of India?
(a) S.K. Roy
(b) D.K. Malhotra
(c) Thomas Matthew
(d) V.K. Sharma
103. On which date is the establishment of State Bank of India celebrated?
(a) 1st January
@UPSC_THOUGHT
Corporation of India
(b) ICICI Prudential Life Insurance Company
(c) National Insurance Company
(d) General Insurance Corporation
123. Who appoints a banking ombudsman? [UBI-PO 2016]
(a) Lead Bank of the State
(b) Governor of respective state
(c) Reserve Bank of India
(d) President of India
124. Who decides the rate of interest on savings bank deposits?
[UBI-PO 2016]
@UPSC_THOUGHT
128. Which of the following is the first bank to tie up with Indian railways
to sell rail tickets through its web site?
[Bihar J.Service 2016]
(a) State Bank of India
(b) ICICI Bank
(c) Axis Bank Ltd.
(d) Punjab National Bank
129. Which of the following banks is the World’s largest bank by
assets? [Bihar J.Service 2016]
(a) Bank of America
(b) Industrial and Commercial Bank of China (ICBC)
@UPSC_THOUGHT
(a)
(b)
(c)
(d)
132. The banks which are implementing the Micro Finance Programme
linked with Self Help Groups (SHGs) are—
[UGC-2016]
(a) Commercial Banks and Co-operative Banks only
(b) Regional Rural Banks and Commercial Banks, only
(c) Co-operative banks and Regional Rural Banks, only
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(c) Chennai
(d) Kolkata
138. The first Indian Bank to introduce ‘Smart Vault’, a fully automated
locker facility using robotic technology to access lockers from the stafe
vault is— [BOM-PO 2016]
(a) IDBI Bank
(b) Federal Bank
(c) HDFC Bank
(d) ICICI Bank
139. According to extant RBI guidelines, ‘Payment Banks’ are not
permitted to— [BOM-PO 2016]
@UPSC_THOUGHT
(d) International
149. The ‘Mudra Bank’ is a subsidiary of— [BOM-PO 2016]
(a) ICICI
(b) RBI
(c) IFCI
(d) SIDBI
150. A central bank of a country uses Open Market Operations (OMO) as
the primary means of implementing—
[BOM-PO 2016]
(a) Tax policy
(b) Monetary policy
@UPSC_THOUGHT
(d) Deposit
155. SMERA Limited, a popular body in the financial world, is a full
service— [RBI 2016]
(a) Asset Financing Company
(b) Asset Management Company
(c) Credit Information Bureau
(d) Credit Rating Agency
156. ‘MobiKwik’ is the name of a— [RBI 2017]
(a) Mobile wallet and online payment system
(b) Online shopping portal
(c) White Label ATM entity
@UPSC_THOUGHT
Sector Undertakings.
(d) It is an important provision in ‘The Insolvency and Bankruptcy Code’
recently implemented by the Government.
171. What is the purpose of setting up of Small Finance Banks (SFBs) in
India? [IAS 2017]
1. To supply credit to small business units
2. To supply credit to small and marginal farmers
3. To encourage young entrepreneurs to set up business particularly in
rural areas.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
172. Who among the following can join the National Pension System
(NPS)? [IAS 2017]
(a) Resident Indian citizens only
(b) Persons of age from 21 to 55 only
(c) All State Government employees joining the services after the date of
notification by the respective State Governments
(d) All Central Government employees including those of Armed Forces
joining the services on or after 1st April, 2004
173. A firm sells shares worth `1000 direct to individuals. This transaction
will cause
(a) GNP to rise by `1000
(b) GDP to rise by `1000
(c) National income to rise by `1000
(d) No impact on Gross National Product
174. The volatility in the Indian share market is due to
1. inflow and outflow of foreign funds.
2. fluctuations in foreign capital markets.
3. changes in the monetary policy.
Which of the above mentioned causes are correct?
@UPSC_THOUGHT
(a) 1 and 2
(b) 1 and 3
(c) 1, 2 and 3
(d) 2 and 3
175. OTCEI is—
(a) Atomic Submarine of China
(b) Economic Policy of USA
(c) An Indian Share Market
(d) A defence research organisation
176. Debenture holders of a company are its
(a) shareholders
(b) creditors
(c) debtors
(d) directors
177. What does S&P 500 relate to
(a) Super computer.
(b) A new technique in e-business.
(c) A new technique in bridge building.
(d) An Index of stocks of large companies.
178. In the parlance of financial investment the term ‘bear’ denotes
(a) An investor who feels that the price of a particular security is going to
fall.
(b) An investor also feels that the price of a particular share is going to rise.
(c) A shareholder or a bankholder who has an interest in a company,
financial or otherwise
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17. (a) The Janta Party coalition government led by Morar Ji Desai
demonetized the currency notes of Rs. 1,000, Rs. 5,000 and Rs.
10,000 on 16 January 1978 to curb counterfeit currency and black
money. The Finance Minister was Haribhai M. Patel at the time.
18. (c) Finance Minister Vishwanath Pratap Singh’s Long Term Fiscal
Policy (LTFP) unveiled in January, 1986.
19. (d) In recommending horizontal distribution, the 14th Finance
Commission has used broad parameters of population (1971) and
changes of population since, income distance, forest cover and
area.
20. (d) Imposition of higher duty on exports is not likely to help in
@UPSC_THOUGHT
36. (d) Agricultural income tax is levied on the income from Agriculture.
At present agriculture is subjected to – two direct taxes and they
are Agricultural Income Tax and Land Tax. They are levied by the
state governments. Not all states levy agricultural income tax.
37. (b) The Government of India earns maximum revenue from Union
Excise Duty which is indirect tax levied and collected on the
goods manufactured in India and consumed within the country.
Custom Duty : It is a variation of Indirect tax and is applicable
on all goods imported and a few Goods exported out of the
country.
Corporation tax : It is a direct tax imposed by jurisdiction on the
@UPSC_THOUGHT
62. (b) The responsibility for coinage lies with central government on the
basis of the Coinage Act, 1906. The designing and minting of
coins in various denominations is decided by Central government.
Except one rupee note & coin all the currencies are minted by RBI. In
one rupee note, RIB signature of RBI Governor of currency held
in 4 places-
Hydrabad, Mumbai, Kolkata & Noida.
63. (d) Devaluation leads to a country’s exports to become less expensive
as the currency is deliberately adjusted down to other currencies,
making imports more expensive, making domestic consumers less
likely to purchase them thus the domestic companies are
@UPSC_THOUGHT
are looking for basic banking only. Along with general purpose
credit cards should be issued and bank branches should be opened
in unbanked rural areas.
78. (c) Devaluation is a deliberate downward adjustment to the value of a
country’s currency, relative to another currency, group of
currencies. Since it is relative to other currency so internal price
remains unchanged. It causes a country’s exports to become less
expensive and imports more expensive.
79. (d) A liquidity trap is a situation in which injections of cash into the
private banking system by a central bank fail to lower interest
rates and hence fail to stimulate economic growth. A liquidity trap
is caused when people hoard cash because they expect interest to
rise in future ,an adverse event such as deflation, insufficient
aggregate demand, or war.
80. (d) Currency notes and coins are called fiat money. They don’t have
intrinsic value like a gold or silver coin. The currency-deposit
ratio measures the relationship between the cash people have on
hand and what they have in their accounts.
81. (b) By buying the government securities from the banks and reducing
SLR may inject money into the system. However Raising cash
Reserve Ratio may take away liquidity from the market as the
banks will have to deposit more money with the RBI and
similarly entering the reverse repo operations may also take away
liquidity from the market.
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rate means that the global investment market determines the value
of a country’s currency.
84. (a) Marginal Standing Facility (MSF) is the rate at which scheduled
banks could borrow funds overnight from the Reserve Bank of
India (RBI) against approved government securities. Banks can
borrow funds through MSF during acute cash shortage
(considerable shortfall of liquidity). This measure has been
introduced by RBI to regulate short-term asset liability mismatch
more effectively and the borrowing is within Statutory liquidity
requirements. The Marginal Standing Facility (MSF) is pegged
100bps or 1 % above the Repo Rate.
85. (d) Basel III is basically a regulatory accord designed specifically for
the banking sector. It aims to improve the supervision, regulation
and risk management within the sector. It also targets at
strengthening the transparency of the banks.
86. (b) Financial inclusion is the delivery of financial services, at
affordable costs, to sections of disadvantaged and low income
segments of society.It includes opening educational centres,
opening wealth management centres by Citibank etc. Khan
commission had put forward its report on financial inclusion.
87. (c) Basis points: It is the increase in interest rates in percentage
terms.
— Repo rate: Repo rate is the policy rate and is part of RBI’s Liquidity
Adjustment Facility (LAF). It is the rate at which commercial
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96. (c) It was established on 12 July, 1982 in sixth five year plan by a
special act by the parliament and its main focus was to uplift rural
India by increasing the credit flow for elevation of agriculture &
rural non farm sector.
97. (a) In India, commercial banks have the highest share in the
disbursement of credit to agriculture and allied activities. The
commercial banks disburse around 60% credit followed by
cooperative banks around 30% .
98. (a) Cooperative Banks operate on no profit no loss basis, and they
operate in all sectors including agriculture sector. NABARD is not
a Cooperative Bank. National Bank for Agriculture and Rural
@UPSC_THOUGHT
108. (d) Near Money is a term used in economics to describe highly liquid
assets that can easily be converted into cash.
109. (a) A flexible exchange rate system is a kind of a monetary system
which allows the exchange rate to be regulated by supply and
demand in relation to other currencies.
110. (b) Syndicate Bank. The symbol of dog implies that Bank is
trustworthy and a friend. Its slogan is : Faithful Friendly.
111. (c) SLR used by bankers indicates the minimum percentage of
deposits that the banks have to maintain in the form of gold, cash
or other approved government securities.
112. (a) The main functioning of the banking system is to accept deposits
@UPSC_THOUGHT
and provide credit. The bank collects deposits from public. These
are savings, fixed, current and recurring deposits. The bank
advances loan to the business community and other members of
the public. The types of bank loans and advances are overdraft,
cash credits, loans and discounting of bill of exchange.
113. (d) The variation in the value of money is always accompanied by
opposite variation in the price of commodities and services. In
brief, the value of money varies inversely with the price level. It is
reciprocal of price level.
Vm =1/p (where Vm denotes value of money and p stands for price
level).
114. (b) The word ‘Actuaries’ is related to the profession of insurance. The
determination of the accidents covered by Insurance policy and of
the premium is done by actuaries.
115. (c) According to Indian Reserve Bank. Non performing assets in
commercial bank means the loans in which interest or principal
amount is not recovered.
116. (c) Bank rate is that rate at which RBI gives credit to Commercial
Banks.
117. (b) The Cash Reserve Ratio is the amount of funds that the banks are
bound to keep with Reserve bank of India as a portion of their Net
Demand and Time Liabilities (NDTL). When RBI increases the
CRR, less funds are available with banks as they have to keep
larger portions of their cash in hand with RBI. This means that
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banks will now have less money to play with. This resulted
reduction in liquidity in the economy.
118. (a) Open Market Operations refer to the purchase and sale of the
Government securities (trading of the securities) by RBI from / to
market. The objective of Open Market Operations is to adjust the
rupee liquidity conditions in the economy on a durable basis.
119. (d) A debenture is a type of debt instrument that is not secured by
physical assets or collateral. Both corporations and governments
frequently issue this type of bond to secure capital.
120. (a) The Self-Help Group-Bank Linkage Programme (SBLP), which
was started as a pilot programme in 1992 on the basis of
@UPSC_THOUGHT
127. (b) The first land development bank was started at Jhang in Punjab in
1920.
128. (b) ICICI Bank has tied up with railway’s e-ticketing
platform IRCTC to sell rail tickets through its website.
129. (b) Industrial and Commercial Bank of China is the Largest Banks in
the World with total assets of 3616.39 billion USD.
130. (d) CTS : Cheque Truncation System Cheque,
MICR : Magnetic Ink Character Recognition,
IFSC : Indian Financial System Code
FERA : Foreign Exchange Regulation Act.
131. (c) The ratio of liquid assets to net demand and time liability is called
@UPSC_THOUGHT
144. (a) There are four major types of market risk; Interest Rate Risk,
Equity Price Risk, Foreign Exchange Risk, Commodity Price
Risk.
145. (b) The maximum loan size and investment limit exposure to a single
and group obligor would be restricted to 10 per cent and 15 per
cent of its capital funds, respectively.
146. (a) Reserve Bank has established a Fund to be called the Depositor
Education and Awareness Fund (DEAF) referred to in Section
26A of the Act.
147. (a) The IFSC is an 11-character code with the first
four alphabetic characters representing the bank name, and the
last six characters (usually numeric, but can be alphabetic)
representing the branch.
148. (a) A Unified Payment Interface (UPI) is a single window mobile
payment system launched by the National Payments Corporation
of India (NPCI). The letter “I” in the abbreviation UPI stands for
interface.
149. (d) The Mudra Bank is subsidiary of Small industrial development
bank of India (SIDBI).
150. (b) A central bank uses OMO as the primary means of
implementing monetary policy.
151. (d) Bank rate is the rate charged by the central bank for lending funds
to commercial banks.
152. (b) Microfinance Institutions (MFIs) regulated by the Reserve Bank
of India (RBI).
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153. (c) SBI Life Insurance is a joint venture life insurance company
between State Bank of India (SBI), and BNP Paribas Cardif.
154. (a) The abbreviation of Net Demand and Time Liabilities is NDTL,
in which ‘D’ stands for demand.
155. (d) SMERA Ratings Limited is a full service Credit Rating Agency,
registered with SEBI, and accredited by RBI as an External Credit
Assessment Institution, for Bank Loan Ratings under BASEL-II
norms.
156. (a) MobiKwik is an Indian company founded in 2009 that provides a
mobile phone based payment system and digital wallet.
157. (d) DCB Bank, launched a “card-less and PIN-less” ATM in
@UPSC_THOUGHT
165. (a) According to the Section 2 of the Coinage Act, 2011, a “Coin”
does not include the credit card, debit card, postal order and e-
money issued by any bank, post office or financial institution.
166. (a) The Government of India has the sole right to mint coins. Coins
are minted at the four India Government Mints at Mumbai,
Alipore(Kolkata), Saifabad(Hyderabad), Cherlapally (Hyderabad)
and Noida (UP).
167. (c) NPCI is a not-for-profit company formed by various banks, with
primary objective of providing cost-effective payment solutions to
the banks. NPCi’s solutions such as IMPS, BHIM, RuPay, AEPS
etc. have indeed helped in financial inclusion. So first is correct.
@UPSC_THOUGHT
(2) Prices of primary products are lower than those of manufactured products.
(3) Investment in agriculture has been lower when compared to investment in
industry :
(a) 1, 2 and 3
(b) 1 and 2
(c) 1 and 3
(d) 2 and 3
36. Human Development Index comprises literacy rates, life expectancy at birth
and
(a) GDP per head in the US dollars.
(b) GDP per head at real purchasing power.
(c) GNP in US dollars
@UPSC_THOUGHT
(d) Economic judgements are taken after maintaining in view the social welfare
41. In India, planned economy is based on?
(a) Gandhian system
(b) Socialist system
(c) Capitalist system
(d) Mixed economy system
42. Which one of the following states was having the highest Human Development
Index in the year 2012?
(a) Assam
(b) Kerala
(c) Uttar Pradesh
(d) Madhya Pradesh
@UPSC_THOUGHT
43. Indian economy has witnessed highest growth rate in GDP in the year
(a) 2003 – 04
(b) 2004 – 05
(c) 2005 – 06
(d) 2006 – 07
44. Which one of the following economists proposed the LPG model of economic
development in India?
(a) Y.B. Reddy
(b) K.V. Kamath
(c) Manmohan Singh
(d) None of these
45. Economic planning is in
(a) Union list
(b) State list
(c) Concurrent list
(d) Not any specified list
46. The concept of Economic Planning in India is derived from which country?
(a) USA
(b) UK
(c) Russia
(d) France
47. In which year was the 20 point economic programme was announced for the
very first time?
(a) 1975
(b) 2006
(c) 1986
(d) 1982
48. Planning was considered a prerequisite :
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(2) The third five year plan aimed to achieve self-sufficiency in foodgrains and
increase agricultural production to meet the requirements of industry and
exports.
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
50. Which of the following can aid in furthering the Government’s objective of
inclusive growth?
(1) promoting self help group
(2) promoting micro, small and medium Enterprises
(3) Implementing the Right to Education Act
Select the correct answer using the codes given below :
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
51. In the post-Independence period, economic reforms were first introduced in
India under :
(a) Janata Party Government (1977)
(b) Indira Gandhi Government (1980)
(c) Rajiv Gandhi Government (1985)
(d) P.V. Narsimha Rao Government (1990)
52. Consider the following statements :
(1) LPG model of Indian Economy was fully implemented in Eighth Five Year plan.
(2) The Eighth plan envisaged an annual average growth rate of 5.6% but real
growth rate was 6.8%.
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(1) The state sets broad parameters and goals for the economy.
(2) The targets to be achieved are broadly set by the state.
(3) The plan is made for the specific time period of about 15 years.
Which of the statements given above is/are correct about the Indicative planning?
(a) 1, 2 and 3
(b) 1 and 2
(c) 1 and 3
(d) only 1
55. Consider the following statements :
(1) In the history of Indian planning, the actual growth rate of the GDP has never
been higher than the targeted growth rate.
(2) In the first five year plan, the actual GDP growth rate was more than the targeted
growth rate.
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
56. Consider the following statements about the LPG model of economic
development process in India?
(1) Disinvestment of profit making public sector Enterprises.
(2) Permitting private sectors to establish Industrial Units without taking a licence.
(3) Chronically sick industries were referred to BIFR for the formulation of revival
or rehabilitation plan.
Which of the processes given above is/are taken after adoption of LPG model?
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 and 3
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(d) only 2
57. Which of the following is not a feature of India’s economic planning?
(a) Limited centralisation
(b) Democratic solution
(c) Planning of imperative nature
(d) Planning of indicative nature
58. Which of the following is true?
(a) Financial planning is more important than physical planning.
(b) Physical planning is more important than financial planning.
(c) Physical and financial planning are equally important.
(d) Physical and financial planning are complementary.
59. Which one of the following is not included in the Agriculture and Allied
@UPSC_THOUGHT
(d) income is taken from poor people and given to rich people
66. The reason in difference between GNP and GDP is
(a) Gross Foreign Investment
(b) Net Foreign Investment
(c) Net Exports
(d) Net Factor Income from abroad
67. The most appropriate measure of a country’s economic growth is its
(a) Gross Domestic product
(b) Net Domestic product
(c) Net National product
(d) Per capita real income
68. The term National Income represents:
(a) Gross national product at market prices minus depreciation
(b) Gross national product at market prices minus depreciation plus net factor
income from abroad.
(c) Gross national product at market prices minus depreciation and indirect taxes
plus subsidies.
(d) Gross national product at market prices minus net factor income from abroad.
69. Human Development Index (HDI) is constructed with reference to
1. Life expectancy at birth, real GDP per capita, gross enrolment ratio, adult
literacy rate.
2. Life expectancy at birth, real GDP per capita, combined gross enrolment ratio,
adult literacy rate.
3. Life expectancy, GDP per capita, infant mortality rate, literacy rate.
4. GDP per capita, infant mortality rate, literacy rate
Codes:
(a) 1 and 2
(b) 1 and 3
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(c) 3 only
(d) 1, 2 and 4
70. Consider the following statements relating to estimation of National
Income. [CDS-2011-II]
1. Foreigners working in Indian Embassies are normal residents of India.
2. Foreigners working in the office of WHO, World Bank, UNO etc, located in
India are not normal residents of India.
3. Indians working in foreign embassies in India are not normal residents of India.
Which of the statements given above is/are not correct?
(a) Only 1
(b) 1 and 3
(c) Only 3
@UPSC_THOUGHT
(3) To consider important questions of social and economic policy affecting national
development
Select the correct answer using the codes given below?
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
81. The slogan of ‘poverty abolition’ was given in which Five Year Plan?
(a) Second plan
(b) Fourth plan
(c) Fifth plan
(d) Sixth plan
@UPSC_THOUGHT
82. The government introduced an agricultural strategy which gave rise to Green
Revolution in India under the plan
(a) Third Five Year Plan
(b) Fourth Five Year Plan
(c) Fifth Five Year Plan
(d) Sixth Five Year Plan
83. The major emphasis on the first five year plan of India was
(a) agriculture
(b) employment
(c) industry
(d) export promotion
84. Which one of the following plans is also known as ‘Gadgil Yojana’?
(a) Third Five Year Plan
(b) Fourth Five Year Plan
(c) Fifth Five Year Plan
(d) Sixth Five Year Plan
85. The period of plan holiday in India was
(a) 1962 – 65
(b) 1966 – 69
(c) 1970 – 73
(d) 1973 – 76
86. Which of the following experienced the fastest expansion during the plan in
India?
(a) Agriculture
(b) Industry
(c) Services
(d) None of these
87. The final authority in India to adopt the five year plan for the country vests in :
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93. In India, the concept of minimum needs and directed anti-poverty programmes
were the innovation of :
(a) Fourth Five Year Plan
(b) Fifth Five Year Plan
(c) Sixth Five Year Plan
(d) Seventh Five Year Plan
94. Consider the following statements :
(1) In the 11th Five Year Plan, the growth rate of the agriculture sector was above
4%.
(2) In the 11th Five Year Plan, the agriculture sector contributed more than 25% in
the overall GDP of India.
Which of the statements given above is/are correct?
@UPSC_THOUGHT
(a) only 1
(b) only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
95. Consider the following statements :
(1) The Ninth Five Year Plan was launched in the 50th year of India’s independence.
(2) For the first time in the Indian economy the GDP growth rate of the Ninth Five
Year Plan was set at 7%.
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
96. Which one of the following is correct about the Twelfth Five Year Plan recently
approved by the Indian Government?
(a) 12th Five Year Plan of Indian Economy is from 2011 to 2016.
(b) 12th Five Year Plan aims to grow GDP at the rate of 10%.
(c) 12th Five Year Plan aims to sustain the inclusive growth which started in 11th
plan.
(d) Both (b) and (c) are correct about the 12th Five Year Plan.
97. Consider the following statements :
(1) In the 11th Five Year Plan, the growth rate of the export was always positive.
(2) In the middle of the 11th Five Year Plan, the import growth was negative due to
external factors.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
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wealth?
(a) 2nd five year plan
(b) 5th five year plan
(c) 4th five year plan
(d) 7th five year plan
103. Which among the following Five Year Plans of the Indian Economy adopted
the indicative planning model?
(a) Fourth Five Year Plan
(b) Sixth Five Year Plan
(c) Eight Five Year Plan
(d) Tenth Five Year Plan
104. Which one of the following Five year plans of Indian Economy was terminated
by the Janata Government?
(a) Fourth Five Year Plan
(b) Fifth Five Year Plan
(c) Seventh Five Year Plan
(d) Eighth Five Year Plan
105. During which plan was the National Bank for Agriculture and Rural
Development (NABARD) established to facilitate the rural credit and
agriculture development?
(a) Third Five Year Plan
(b) Fifth Five Year Plan
(c) Sixth Five Year Plan
(d) Eighth Five Year Plan
106. A Five Year Plan was severely affected by the immigration of huge number of
people from Bangladesh was?
(a) First Five Year Plan
(b) Third Five Year Plan
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(a) Rapid industrialization with particular emphasis on the development of basic and
heavy industries
(b) Large expansion of employment opportunities
(c) Achieve self - sufficiency in food grains and increase agricultural production to
meet the requirements of industry and exports
(d) Reduction of inequalities in income and wealth and a more even distribution of
economic power
115. Which one of the following is not a recommendation of the Fourteenth Finance
Commission? [CDS-2015-II]
(a) Share of States in Central Divisible Pool is increased from 32 per cent to 42 per
cent
(b) Area under forest cover is an important variable in distribution of States’ share
among States
(c) Fiscal discipline is dropped as a variable in distribution of States share among
States
(d) Sector specific grant is recommended as in the previous Finance Commissions
116. Match the following
List I List II
(Five Year Plan) (Emphasis)
A. First 1. Food security and women
empowerment
B. Second 2. Heavy industries
C. Fifth 3. Agriculture and community
development
D. Ninth 4. Removal of poverty
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Codes :
AB C D
(a) 1 2 4 3
(b) 1 4 2 3
(c) 3 2 4 1
(d) 3 4 2 1
117. Which of the following institutions was/were asked by the Government of India
to provide official estimates of black (unaccounted) money held by Indians,
both in India and abroad? [CDS-2013-I]
1. National Institute of Public Finance and Policy.
@UPSC_THOUGHT
122. The Second Five Year Plan that called for the establishment of Socialist pattern
of society was commonly referred to as the [NDA/NA-SP-2015-I]
(a) Harrod-Domar Plan
(b) Mahalanobis Plan
(c) Nehru Plan
(d) Peoples Plan
123. As against a target of 4 per cent, the average annual growth rate of first four
years of the 12th Five Year Plan period (2012-17) in agriculture and allied
sector was—
[NABARD 2016]
(a) 3.0%
(b) 1.6%
(c) 3.5%
(d) 2.5%
124. First Five Year Plan of India was based on the—
[BPSC 2017]
(a) Harrod Domar Model
(b) Mahalanobis Model
(c) Dadabhai Naoroji Model
(d) J.L. Nehru Model
131. According to the data studied by Planning commission in 2011–12, how much
the population of India falls under the poverty line?
(a) 14.2%
(b) 21.9%
(c) 31.2%
(d) 34.2%
132. Consider the following sectors of the Indian economy with respect to share of
employment.
1. Agriculture sector
2. Industrial sector
3. Services sector
Arrange these sectors from highest to lowest in terms of employment and select the
@UPSC_THOUGHT
3. In the long run , Phillips Curve is usually thought to be horizontal at the non
accelerating inflation rate of unemployment (NAIRU)
Select the correct answer using the code given
below: [CDS-2016-I]
(a) 1 only
(b) 2 and 3 only
(c) 1 and 2 only
(d) 1, 2 and 3
137. Poverty level in India is established on the basis of
[UP-PCS 2009]
(a) per capital income in different States.
(b) house - hold average income.
@UPSC_THOUGHT
Agriculture Sector
141. In India, agriculture income is calculated by
(a) output method
(b) input method
(c) expenditure method
(d) commodity flow method
142. The farmers are provided credit from a number of sources for their short and
long term needs. The main sources of credit to the farmers include :
1. the Primary Agricultural Co-operative Societies, Commercial Banks, RRBs and
Private money lenders.
2. the NABARD, RBI, Commercial banks and Private money lenders.
@UPSC_THOUGHT
3. the District Central Co-operative Banks (DCCB), the lead banks, IRDP and JRY
4. the Large Scale Multi-purpose programme, DCCB, IFFCO and Commercial
banks.
(a) All of the above
(b) 1 and 2 only
(c) 1 only
(d) 3 and 1 only
143. Green Revolution in India started from
(a) Kanpur
(b) Delhi
(c) Bengaluru
(d) Punjab
144. The Green Revolution in India has contributed to
(a) inter-regional inequality
(b) inter-class inequality
(c) inter-crop inequality
(d) all of the above
145. The importance of agriculture in Indian Economy is indicated by its
contribution to which of the following?
(a) National income and employment
(b) Industrial development and international trade
(c) Supply of foodgrains
(d) All of the above
146. Which one of the following Co-Operative societies is responsible for the
production of fertilizers?
(a) NAFED
(b) IFFCO
(c) NCDC
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154. During which of the following years, average growth/rate (at constant prices) of
agriculture and allied sectors negative?
(a) 2002-03
(b) 2003-04
(c) 2005-06
(d) 2006-07
155. Among the items of export of agricultural and allied products from India during
the year 2005-06, which one of the following was the highest in the value?
(a) Tea
(b) Coffee
(c) Rice
(d) Marine products
@UPSC_THOUGHT
161. Which of the following has not been a component of the agriculture strategy
that brought about the Green Revolution?
(a) Greater intensity of crops
(b) Guaranteed maximum prices
(c) New agricultural technology
(d) Package of inputs
162. Consider the following statements :
1. The Union Government fixes the statutory minimum price of sugarcane for each
sugar season.
2. Sugar and sugarcane are essential commodities under the Essential Commodities
Act. Which of these statements are correct?
(a) 1 only
@UPSC_THOUGHT
(b) 2 only
(c) Both 1 and 2
(d) Neither1 nor 2
163. What is the contribution of livestock in agricultural sector?
(a) 5%
(b) 15%
(c) 25%
(d) 10%
164. The importance of agriculture in Indian economy is indicated by its contribution
to which of the following?
(a) National Income and Employment
(b) Industrial development and international trade
(c) Supply of food-grains
(d) All the above
165. Consider the following statements :
1. Indian Government announces the minimum support price for the wheat rice and
sugarcane in a year.
2. The common paddy has higher minimum support price than the paddy Grade-A.
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
166. Consider the following statements :
1. India is meeting 85% of the urea fertilizer through indigenous production.
2. India produces surplus amount of the fertilizers containing phosphorous and
potassium.
Which of the statements given above is/are correct?
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(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
167. Consider the following reasons :
1. Lack of irrigation facilities, low productivity of land.
2. Single crop mode of cultivation.
3. Indian Agriculture gamble on the monsoon.
Which of the reasons given above is/are responsible for the migration of people from
rural to urban areas
(a) 1, 2 and 3
(b) 1 and 3
@UPSC_THOUGHT
(c) 2 and 3
(d) 2 only
168. With reference to the agriculture sector of India, consider the following
statements
1. Rural infrastructure Development Fund disperses loans to the states to complete
the minor irrigation projects.
2. Rural infrastructure Development Fund is managed by the public sector
Commercial Banks.
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
169. Which one of the following is correctly matched?
Revolution Sector
(a) Rainbow : Industry
(b) Blue : Fisheries
(c) Yellow : Agriculture and Allied Services
(d) None of the above
170. Consider the following statements :
1. Agriculture including allied activities accounted for about 55% employment in
the country according to census 2011.
2. The growth in agriculture and allied sectors is a necessary condition for
inclusive growth in India.
Which of the statements given above is/are correct?
(a) 1 only
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(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
171. Consider the following statements about the National Cooperative Marketing
Federation of India Limited (NAFED).
1. NAFED promotes the inter-state trade as well as export of certain agricultural
commodities to many foreign countries.
2. NAFED is responsible for the movement of the essential commodities from
surplus areas to scarcity areas.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
@UPSC_THOUGHT
(c) Cereals
(d) Vegetables
178. Which one of the following crops has been exceeding target since 2004-05 in
India but its growers have been committing suicide in large numbers in many
parts of the country every year?
(a) Pulse
(b) Cotton
(c) Oilseeds
(d) Wheat
179. Assertion (a) : Agriculture is the main source of livelihood of people in India.
Reason (R): Measures for agricultural development should be undertaken.
Codes:
(a) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
(b) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(c) (a) is correct, but (R) is incorrect.
(d) (a) is incorrect, but (R) is correct.
180. Which of the fallowing are responsible for the decrease of per capita holding of
cultivated land in India?
[CDS-2012-II]
1. Low per capita income.
2. Rapid rate of increase of population.
3. Practice of dividing land equally among the heirs.
4. Use of traditional techniques of ploughing.
Select the correct answer using the codes given below
(a) 1 and 2
(b) 2 and 3
(c) 1 and 4
(d) 2,3 and 4
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181. Which of the following statements about the Livestock sector in India is/are
correct ?
1. Livestock contributed about 25 per cent of gross value added in agriculture
2. It provides self employment to a large segment of population
3. Rapid growth of livestock sector can be egalitarian and inclusive
Select the correct answer using the code given below:
[NDA/NA-SP-2015-II]
(a) 3 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
182. Which one of the following pairs is not correctly
@UPSC_THOUGHT
186. Which of the following can be called as a part of the service sector?
(a) Textile mills
(b) Banking
(c) Coal mines
(d) Agricultural
187. Who wrote a book describing the theory of economic drain of India during
British rule?
(a) Lala Lajpat Rai
(b) Mahatma Gandhi
(c) J.L. Nehru
(d) Dadabhai Naoroji
188. As the economy develops, the share of the tertiary sector in the GDP:
@UPSC_THOUGHT
(a) Decreases
(b) Decreases then increases
(c) Increases
(d) Remains constant
189. The slack season in the Indian economy is
(a) Feb-April
(b) Mar-April
(c) Jan-June
(d) Sept-Dec
190. What is the approximate share of SSIs in gross industrial value added in the
Indian economy?
(a) 25%
(b) 30%
(c) 5%
(d) 40%
191. What are the difference between Millenium Development Goals and
Sustainable Development Goals?
1. Millenium Development Goals (MDGs) were not developed through an inter-
governmental process, while SDG were.
2. All the MDGs are applicable only to the developing countries except for MDG 8
which relates to aid and finance.
Options :
(a) 1 only
(b) 2 only
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198. When was the “Package for Promotion of Micro and Small Enterprises”
announced?
(a) August 2005
(b) February 2007
(c) March 2009
(d) November 2010
199. What is the major contribution of the Electronics industry to the country?
(a) Maximised wealth formation
(b) Reduced poverty
(c) Improved standard of living
(d) Encouraged employment
200. The number of women entrepreneurs in small scale industrial region is highest
@UPSC_THOUGHT
205. The largest source of revenue for Britishers in India was from ______?
(a) Textile and Jute Industry
(b) Gems and Stone Industry
(c) Temple Tax
(d) Land revenue
206. When was the first modern paper mill of the country set up?
(a) 1827
(b) 1812
(c) 1846
(d) 1854
207. Durgapur steel plant was set up in assistance of
(a) UK
@UPSC_THOUGHT
(b) USA
(c) rance
(d) Germany
208. Which unit of the Hindustan Copper Ltd is the first copper smelting unit in
India?
(a) Malanjkhand Copper Project (MP)
(b) Khetri Copper Complex (Rajasthan)
(c) Indian Copper Complex (Jharkhand)
(d) Tajola Copper Project (Maharashtra)
209. When was the ‘Policy Package for Setting up Credit to Small and Medium
Enterprises’ announced?
(a) August 2005
(b) February 2007
(c) March 2009
(d) November 2010
210. GCIL—an American company of chemical sector has been acquired by—
(a) Reliance group
(b) Shriram group
(c) Birla group
(d) Tata group
211. Kuwait’s biggest Mobile Telecommunication Company known as Zain has been
bought by—
(a) Bharti Airtel
(b) Reliance Communication
(c) Vodafone
(d) Aircel
212. Which of the following pairs are correctly matched?
Enterprise Industrial Group
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Industry Industrialists
Reliance Mukesh Ambani
Wipro R. Krishnamurthy
Airtel Bharati Mittal
Nano Car Ratan Tata
214. Match the given companies with their locations and select the correct answer by
using the codes given below :
Company Location
A. BALCO 1. Hirakund
B. HINDALCO 2. Korba
C. Indian Aluminium company 3. Koraput
D. NALCO 4. Renukoot
Code:
A B C D
(a) 3 1 4 2
(b) 2 4 1 3
(c) 3 4 1 2
(d) 2 1 4 3
215. Correlate the following
Industry Field
A. Basic industry 1. Fertilizer
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(b) 2 only
(c) 1 and 3
(d) 1, 2 and 3
221. Consider the following statements about Tata Steel:
1. It is Asia’s first privately own integrated iron and steel plant.
2. It is the first company outside Japan to get the Deming Application Prize in 2008
for excellence in total quality management
3. Immediately after the enactment of the Provident Fund Law in India, Tata Steel
introduced provident fund for its employees.
4. It is the first company in the world to get social accountability 8000 certification
from the social accountability international from the USA.
Which of the statements given above are correct?
(a) 2 and 3
(b) 3 and 4
(c) 1, 2 and 3
(d) 1, 2, 3 and 4
222. Consider the following statements :
1. MMTC limited is India’s largest international trading organisation.
2. Neelanchal Ispat Nigam Limited has been set up by MMTC jointly with the
government of Odisha.
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
223. Consider the following statements about the Navaratna status industries.
1. Navaratna was originally assigned to nine public sector enterprises in 1997.
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2. The number of PSEs (Public Sector Enterprises) having Navaratna status is now
more than 15 industries.
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
224. Consider the following statements :
1. The first petrochemical industry in India was started with the establishment of
National organic chemical industry limited in sixties.
2. The real thrust of petrochemical industry in India came with the establishment of
Indian Petrochemical Corporation Limited (IPCL) at Baroda.
@UPSC_THOUGHT
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
228. Consider the following statements :
1. The USSR assisted in building of Bhilai Steel Plant.
2. The British assisted in the building of the Bokaro Steel Plant.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 only
(c) Both 1 and 2
(d) Neither 1 nor 2
@UPSC_THOUGHT
229. In India, in the overall index of industrial production, the indices of eight core
industries have a combined weight of 37-90%. Which of the following are
among those eight core industries?
1. Cement
2. Fertilizers
3. Natural gas
4. Refinery products
5. Textiles
Select the correct answer using the codes given below :
(a) 1, 2, 3, 4 and 5
(b) 1, 2, 3 and 4
(c) 2, 3, 4 and 5
(d) 2, 3 and 5
230. A Labour intensive industry is one that :
(a) Requires hard manual labour
(b) Pays adequate wages to the labour
(c) Employs more hands
(d) Provides facilities to labour
231. Identify the correct sequence of the establishment of steel plant in India from
the earliest to the latest.
(a) Bokaro–Jamshedpur, Vishakhapatnam, Bhilai
(b) Jamshedpur–Bhilai, Bokaro–Vishakhapatnam
(c) Bhilai, Jamshedpur, Vishakhapatnam, Bokaro
(d) Jamshedpur, Bokaro, Bhilai, Vishakhapatnam
232. Consider the following statements :
1. The first news print plant was set up in India at Nepanagar.
2. The first modern steel plant in India was set up at Bhadrawati.
Which of the statements given above is/are correct?
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(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
233. Consider the following statements :
1. The erratic trend in the production of sugar is mainly due to monsoons.
2. The output of sugar is influenced by both cane and Gur prices.
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
@UPSC_THOUGHT
2. The petrochemical industry in India gives a big boost to the small scale
industries.
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
239. What is/are the recent policy initiative of government of India to promote the
growth of manufacturing sector?
1. Setting up of National Investment and Manufacturing Zones.
2. Providing the benefit of single window clearance.
3. Establishing the technology acquisition and development fund.
@UPSC_THOUGHT
objectives
(d) It emphasises environmentally sustainable growth in plastic sector with cluster
development approach
246. Which one of the following is correctly matched?
Industry Status
(a) SAIL Maharatna
(b) IOC Navratna
(c) Coal India Ltd. Mini-Ratna
(d) BHEL Mini-Ratna
247. Token privatisation or deficit privatisation of public sector units occurs when
the government sells
(a) 5% of shares
(b) 10% of shares
(c) 49% of shares
(d) 51% of shares
248. Which one of the following cities is identified as the hottest outsourcing
destination in the world ?
(a) Dublin, Ireland
(b) Bengaluru, India
(c) Makati city, the Philippines
(d) Tokyo, Japan
249. Which of the following statements regarding chemical industry in India is /are
correct?
1. Chemical industry is one of the oldest industries in India
2. Dyestuff sector is one of the important segments of chemical industry
3. Textile industry accounts for the largest consumption of dyestuffs
Select the correct answer using the code given below:
[CDS-2016-I]
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(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1,2 and 3
250. Which one of the following is not a part of service sector in
India? [CDS-2015-II]
(a) Transport
(b) Construction
(c) Hotels and restaurants
(d) Insurance
251. Which one of the following is not correct in the context of industrial clusters
development in India? [CDS-2015-II]
@UPSC_THOUGHT
(a) Industrial clusters play an important role for the MSME participants in their
inclusiveness, technology absorption and efficiency improvement
(b) Industrial clusters are visible in traditional handloom, handicrafts and modern
SME
(c) Industrial cluster programmes in India are administered by various ministries
(d) Industrial clusters lead to promotion of monopoly in the market
252. Which of the following statements in the context of income-environment
relationship is /are correct?
(1) Pollution trends tend to follow an inverse-U shaped relationship across different
stages of economic development.
(2) In the beginning stage, pollution increases due to urbanization and
industrialization.
(3) In the later stage, pollution declines due to structural changes towards services
sector.
Select the correct answer using the code given below.
[CDS-2015-II]
(a) 1 only
(b) 1 and 2 only
(c) 1, 2 and 3
(d) 2 and 3 only
253. Which of the following occupations are included under secondary sector as per
the national income accounts ?
[CDS-2013-I]
1. Manufacturing
2. Construction
3. Gas and water supply
4. Mining and quarrying
Select the correct answer using the codes given below
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(a) 1, 2, 3 and 4
(b) 1, 2 and 4
(c) 1, 2 and 3
(d) 3 and 4
254. Division of labour often involves
1. specialized economic activity.
2. higly distinct productive roles.
3. involving everyone in many of the same activities.
4. individuals engage in only a single activity and are dependent on others to meet
their various needs.
Select the correct answer using the code given below:
[NDA/NA-SP-2016-I]
@UPSC_THOUGHT
[Chhatis-PSC 2016]
(a) Large Industry
(b) Small Scale Industry
(c) Micro Industry
(d) Construction Industry
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1. (b) The concept of mixed economy evolved from the ideas of Keynes. The
concept of mixed economy means that both private enterprises and public
enterprises coexist. However, the condition attached is that the private
enterprises must work for serving the society rather than having only self
interest. Further the private enterprises may not be allowed in every sector
of the economy like area of national importance.
There are 3 types of economics system:-
a. Capitalism - the private ownership of the means of production (capital) and a
market economy for co-ordination. As-corporate capitalism
b. Mixed Economy Example - American school, Japanese system, Nordi model,
@UPSC_THOUGHT
socialist economy of India before 1991, which stagnated around 3.5% from
1950s to 1980s.
6. (a) GDP at factor cost is GDP at market price minus indirect taxes plus
subsidies. GDP at factor cost measure the value of output in terms of what
it really cost to produce.
Gross value of output = Value total Sales Goods & Services + Value
of changes in the inventories.
The Sum of net value added in various economic activities is known as GDP at
factor cost.
7. (a) Per capita income is obtained by dividing national income by total
population of the country per capita income, also known as income per
@UPSC_THOUGHT
production uses up the fixed assets or there is some wear and tear or fixed
assets by process of depreciation. In order to arrive at NNP we deduct
depreciation from GNP.
12. (b) National Income is based on the production of goods and services. A
variety of measures of national income and output are used in economics
to estimate total economic activity in a country or region, including gross
domestic product (GDP), gross national product (GNP), net national
income (NNI), and adjusted national income (NNI* adjusted for natural
resource depletion).
13. (a) Rate of GDP growth is a major indication of the state of the economy of a
country. Economic growth is the increase in the market value of the goods
and services produced by an economy over time. It is conventionally
@UPSC_THOUGHT
32. (c) Real Gross Domestic Product (real GDP) is a macroeconomic measure of
the value of economic output adjusted for price changes (i.e., inflation or
deflation). Nominal gross domestic product is defined as the market value
of all final goods produced in a geographical region.
33. (c) Higher growth in GDP and population can occur together. Per capita
income always decreases with high population growth as income per
person decreases with rise in population.
34. (b) GDP deflator is an economic metric that accounts for inflation by
converting output measured at current prices into constant-dollar GDP. The
GDP deflator shows how much a change in the base year’s GDP relies
upon changes in the price level.
35. (a) In India a large number of farmers are illiterate and know little about
@UPSC_THOUGHT
planning.
58. (d) Physical planning refers to the allocation of resources in terms of men,
materials and machinery. In physical planning, an overall assessment is
made of the available real resources such as raw materials, manpower, etc.,
and how they have to be obtained so that bottlenecks may be eliminated
during the plan. Physical planning requires the fixation of physical targets
with regard to agricultural and industrial production, socio-cultural and
transportation services, consumption levels and in respect of employment,
income and investment levels of the economy. Physical planning has to be
viewed as an overall long-term planning rather than a short-term piecemeal
planning.
Financial planning refers to the technique of planning in which resources are
allocated in terms of money. Financial planning is essential in order to
remove maladjustments between supplies and demand and for calculating
costs and benefits of the various projects. Thus, Financial planning is
thought to secure a balance between demands and supplies, avoid inflation
and bring about economic stability.
59. (d) Agriculture (crops) and allied sectors are like forestry, logging and fishing.
Food processing is not included in the Agriculture and allied services of
Indian Economy.
60. (d) Agriculture is the pillar of the Indian economy because of its high share in
employment and livelihood creation.
Agriculture and allied activities are largest contributor to GDP accounting for
27% of the total economy.
61. (c) Agriculture and Allied sectors contribute less than 20% around 17% of
Gross Domestic product of India. Around 60% of net sown agricultural
area of India is depended on rainfall.
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62. (b) Per capita income, also known as income per person, is the mean income
of the people in an economic unit such as a country. Per capita income is
often used to measure a country’s standard of living.
Poverty Ratio : Ratio of number of people whose income falls below
poverty sine, taken as half the medium house hold income of total
population.
National Income : Total amount of money earned within a country.
Unemploye rate : It is defined most basically as the percentage of total
labour force that is unemployed but actively seeking employment and
willing to work.
63. (a) The Atkinson index is a measure of income inequality developed by
British economist Anthony Barnes Atkinson. The measure is useful in
@UPSC_THOUGHT
NIFA = GNP-GDP
NIFA : refers to the net flow of property income to and from the rest of world
plus the net flow of compensation of employer.
67. (d) The most appropriate measure of the country’s economic growth is its “per
capita real income” which is also denoted as NNP at factor cost
population.
68. (c)
69. (a) HDI is the geometric mean of (i) Life Expectancy Index (LEI), Education
Index (EI) and Income Index (II).
(where 20 and 82.3 are the minimum and maximum values of expectancy of life
at birth in years).
(100 and 107721 are the minimum and maximum values of Per Capita Gross
National Income in US $).
70. (b) Statement 2 is correct as it comes under the perview of non-
resident/International resident.
@UPSC_THOUGHT
71. (a) Negative Inflation is decrease in price level and economic growth is
defined as GDP rise. A decrease in inflation means the prices has fallen.
So, there is increase in purchasing power of money. It is increased
consumption therefore GDP increases.
72. (d) National Income ignores sale of land.
73. (a) Typically, higher inflation is caused by strong economic growth. If
Aggregate demand in an economy expanded faster than aggregate supply,
we would expect to see a higher inflation rate. If demand is rising faster
than supply, then this suggests that economic growth is higher than the
long run sustainable rate of growth.
74. (b) The effect of a government surplus upon the equilibrium level of NNP
(Net National Product) is substantially the same as an increase in
consumption.
75. (c) Share of food in total consumption expenditure has been coming down as
per capita income grew over time in last sixty years because growth in
food per capita income expenditure has been lower than growth in other.
76. (a) The sum of a nation’s gross domestic product (GDP) plus net income
received from overseas. Gross national income (GNI) is defined as the sum
of value added by all producers who are residents in a nation, plus any
product taxes (minus subsidies) not included in output, plus income
received from abroad such as employee compensation and property
income.
77. (a) National product at factor cost is equal to net domestic product at factor
cost+ Net factor Income from Abroad.
78. (b) The first person to adopt a scientific procedure in estimating the national
income was Dr. V.K.R.V Rao in 1931.
79. (a) During first Five Year Plan (1951–56) the price level in Indian economy
showed a decline because of rapid agricultural development and measures
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it was implemented during the Fifth Five Year Plan 1974–79. Gandhi
promised to reduce poverty by targeting the consumption levels of the poor
and enact wide ranging social and economic reforms.
nd
2 plan - ‘Socialist pattern & life’
4th plan - ‘Garibi Hatao’
6th plan - ‘‘Rolling plan’ taken from Japan coined by Gunnar Myrdal.
82. (a) Under the Third Five Year Plan, the government introduced an agricultural
strategy which gave rise to green revolution in India. Under the Third Plan
the goal was to establish self reliance and self generating economy.
83. (a) The major emphasis in the First Five Year plan was on the agriculture
sector. At the time of first plan (1951–56), India faced severe food shortage
and inflation. Accordingly the first plan emphasized on rapid agricultural
development so as to achieve food self sufficiency and control inflation.
Target Growth rate was 201% annual GDP Achieved growth Rate was 3.6% &
the Net domestic product went up by 15%.
84. (b) The Fourth Five-Year Plan is also called “Gadgil Yojana”. The aim of this
plan was to make the economy independent and to reach self active take
off position. It was named after the then deputy chairman of the Planning
Commission Dr. D R Gadgil.
85. (b) Due to miserable failure of 3rd plan, the govt was forced to declare plan
holidays (from 1966-67, 1967-68, 1968-69), the target growth rate was
5.6%, but the actual was 2.4%.
86. (c) The service sector experienced the fastest expansion during the plan in
India which was predominantly an agricultural economy at the time of
independence. It includes: telecommunication, hospitality
industry/tourism, mass media, healthcare/hospitals, information
technology, banking, insurance, investment management, accountancy,
legal services, consulting, retail sales, real estate, education. currently
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97. (b) Regarding the 11th Five Year Plan, in the middle of the plan, the import
growth was negative due to external factors and the growth rate of the
export was negative during certain periods.
98. (c) First plan – agriculture, Irrigation and power projects
Third Plan – self reliance and generating economy
Fifth Plan – growth with social justice
Twelfth plan – sustainable inclusive growth
99. (c) Jawahar Rozgar Yojna was launched on April 1, 1989 by merging National
Rural Employment Program (NREP) and Rural Landless Employment
Guarantee Programme (RLEGP). In Seventh Five Year Plan the small-
scale and food processing industries were given new impetus as the plan
laid stress on improving the productivity level of industries by upgrading
technology.
100. (b) Despite big investments during the first three Plans the living standards of
the poor could not be raised and poverty and inequity in distribution of
state resources remained stark. Consequently, the period between 1966 and
1969 marked the shift from a ‘growth approach’ to a ‘distribution from
growth approach’. Looking at the failures and pitfalls the planners
suspended the impending Fourth Plan, which was due in 1966, until 1969
for a revision of objectives and targets. This was called as the ‘Plan
Holiday’ extending from 1 April 1966 to 31 March 1969.
101. (d) The Fourth Five Plan was formed for the years 1969 to 1974. It was the
first plan that the government of Ms Indira Gandhi launched. The plan was
put forward when the country was under the pressure of inflationary
recession and devaluation. The plan aimed for a 5.5 percent growth but
ended up achieving a mere 3.3 percent growth.
102. (a)
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103. (c) During the Eighth Five Year Plan, the Indian Economy adopted the
indicative planning model. Indicative planning is a form of economic
planning implemented by a state in an effort to solve the problem of
imperfect information in market and mixed economies in order to increase
economic performance. When utilizing indicative planning, the state
employs “influence, subsidies, grants, and taxes.
104. (b) Fifth FYP was launched and planned for the period 1974-79 but Janata
Government came in power in 1978 and terminated the plan prematurely
in 1978. The Janata government launched sixth FYP for period 1978-1983.
Congress government when came in power in 1980 abandoned the sixth
FYP and launched a new sixth FYP for period 1980-1985.
105. (c) National Bank for Agriculture and Rural Development (NABARD) is an
@UPSC_THOUGHT
112. (c) According to the Second Five Year Plan the priorities were given in the
production of iron and steel and heavy engineering and also to strengthen
the oil exploration and coal.
113. (b) The Fifth Five Year Plan (1974-79) had a high priority to bring inflation
under control and to achieve stability in the economic situation.
114. (c) The third five year plan (1961-1966) had objective to increase wheat
production and other agricultural products.
115. (c) The Fourteenth Finance Commission wants the states to share a larger
fiscal responsibility for the implementation of the scheme.
116. (c) A. First Five Year Plan (1951-56)- Agriculture and community
development
B. Second Five Year Plan (1956-61)- Heavy Industry
@UPSC_THOUGHT
was also accepted by the panel under the leadership of Arvind Panagariya,
Constituted by the Govt. in September 2016. However This Panel
suggested the Govt. to constitute another panel to define poverty.
138. (b) According to Prof. Nurkse, Vicious Circle of Poverty implies circular
constellation of forces tending to act and react one another in such a way
as to keep a poor country in a state of poverty.
139. (d) Planning commission is the nodal agency for estimation of poverty at the
national and state levels and the surveys are normally conducted on
quinquennial basis.
140. (c) Dr. V. M. Dandekar and Mr. Nilkantha Rath, B.S. Minhas and Dr. P. K.
Bardhan studied about poverty in India.
141. (a) In India, agriculture, forestry and logging, fishing, mining and quarrying,
registered manufacturing and construction units are included in category
A. The output method is applied to category A. The value added by this
category is found by subtracting the value of raw materials and other
inputs from the aggregate of commodity-wise output.
Expenditure Method-This method measure National income sum total of
final expenditure incurred by household, business firm, Govt. &
Foreigners.
Commodity flow method - This method is used to estimate purchase of
commodity by intermediate or final users. This method generally begins
with an estimate of the total supply of a commodity available for domestic
users.
142. (c) Statement 1 lists all the main and primary sources of agricultural credit
institutions exclusively for farmers.
143. (d) The Green Revolution in India was a period where Agriculture in India
increased its yield due to improved agronomic technology, the main
development was higher yielding varieties of wheat.
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144. (d) The Green Revolution in India has contributed to inter-regional, inter-class
and inter-crop inequality as certain regions like UP and Punjab which used
HYVs performed much better than others and become more advanced than
other states.
145. (d) The importance of agriculture in Indian Economy is indicated by its
contribution to national income, industrial development and supply of
foodgrains. It contributes around 13.7% to GDP, supplies raw material for
development of industries along with supplying food grains for livelihood.
Agriculture plays a vital role in the Indian economy over 70% of the rural
households depend upon Agricultural. Agriculture in an important sector
of Indian economy as it contributes about 17% to the total GDP and
provide employment to over 60% of population.
@UPSC_THOUGHT
146. (b) Indian Farmers Fertilizer cooperative Ltd (IFFCO) is the co-operative
society responsible for the production of fertilizers. IFFCO was registered
on November 3, 1967 as a Multi-unit Co-operative Society.
NCDC : National Co-operative Development Co-operation was
established by the Act of parliament in 1963 as a statutory co-operation
under the ministry of Agriculture.
147. (d) The introduction of high-yielding varieties of seeds and the increased use
of chemical fertilizers and irrigation are known collectively as the Green
Revolution. The impact of the Green Revolution was felt most in the
production of wheat. India saw annual wheat production rise from 10
million tons in the 1960s to 73 million in 2006.
148. (a) The Blue Revolution is similar to the green revolution as it deals with
aquaculture, fish and water preservation for human use.
Blue Revolution Fish Production
Green Revolution - Food grains
White Revolution - Milk production
Yellow Revolution - Oil seed production
149. (b) Guranteed maximum prices have not been a component of the agriculture
strategy that brought about the Green Revolution. The strategy aimed at
increasing the yield of crops using fertilizer, pesticides and high yielding
varities in agriculture.
150. (d) The term ‘Green Revolution’ has been used to indicate higher production
through enhanced agricultural productivity per hectare.
New agricultural techniques were introduced as a package programme to include
high yielding variety seeds, fertilizers and pesticides.
151. (d) Agriculture, dairy, horticulture and related occupations alone employ 52
percent of labour in India.
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152. (d) The Commission for Agricultural Costs & Prices (CACP) came into
existence in January 1965. Minimum Support Price (MSP) is a form of
market intervention by the Government of India to insure agricultural
producers against any sharp fall in farm prices. The minimum support
prices are announced by the Government of India at the beginning of the
sowing season for certain crops on the basis of the recommendations of the
Commission for Agricultural Costs and Prices (CACP).
153. (d) Yellow revolution refers to the production of oil seeds.
154. (a) During 2002-03, average growth rate of agriculture and allied sectors
negative.
155. (d) Marine Product was the highest in value among export items of
agricultural and allied products from India during the year 2005-06.
@UPSC_THOUGHT
156. (a) Green revolution’s main focus was on the production of only 2 cereals
wheat and rice.
157. (a) Pink revolution - Onions/prawn.
158. (d) Gray revolution - Fertilizers.
159. (a) The union government has constituted a national rain fed area authority on
3rd Nov, 2006 to give focused attention to the problems of rain fed area of
country, It’s manadate is water than mere water conservation and covers all
the aspects of sustainable and holistic development of rainfed areas,
including appropriate farming and livelihood system approach.
160. (d) On January 21, 2004 the Department of Agriculture, Cooperation and
Farmer’s welfare, Ministry of Agriculture, Govt. of India established Kisan
Call Centers across the country to deliver extension services to the farming
community. The aim is to respond in the local language to the problems
faced by farmers.
A farmer from any part of the sale can contact the kisan call center counter by
dialing toll free no. 1551 or 1800-180-1551 and present their problems
related to farming.
161. (b) The Directorate of Marketing and Inspection (DMI) headed by the
Agricultural Marketing Advisor, Department of Agriculture & Co-
operation (DAC) implements agricultural marketing policies and
programmes of the Government of India. It undertakes: Standardisation,
Grading and Quality Control of Agricultural and Allied produce, Market
Research and Surveys along with other functions.
162. (c) The union government fixes the statutory minimum price of sugarcane for
each sugar season. Sugar and sugarcane are essential commodities under
the essential commodities Act. So both statements are correct.
163. (c) Livestock contributes 25 per cent of gross value added in the agriculture
sector and provides self-employment to about 21 million people. Growth
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of livestock output averaged 4.8 per cent per annum during the Eleventh
Plan recovering from an average of 3.6 per cent in the Ninth and theTenth
Plans.
164. (d) The importance of agriculture in Indian Economy is indicated by its
contribution to national income, industrial development and supply of
foodgrains. It contributes around 13.7% to GDP, supplies raw material for
development of industries along with supplying foodgrains for livelihood.
165. (d) Regarding to minimum support price neither of the statements given above
is correct. In order to help the farmers in getting remunerative prices for
their produce with a view to encourage higher investment and also to
increase production and productivity of a commodity, Government of India
declares Minimum Support Price (MSPs) for 25 notified agricultural
@UPSC_THOUGHT
commodities for each Kharif and Rabi crop. Moreover, the common paddy
does not has higher minimum support price than the paddy Grade-A.
166. (a) In the given statements, India is meeting 85% of the urea fertilizer through
indigenous production is correct. However, we are deficient in phosphatic
and potassic resources and around 90% is imported.
167. (a)
168. (a) Rural Infrastructure Development Fund (RIDF) was instituted in
NABARD with an announcement in the Union Budget 1995-96 with the
sole objective of giving low cost fund support to State governments and
state owned corporations for quick completion of ongoing projects relating
to medium and minor irrigation, soil conservation, watershed management
and other forms of rural infrastructure.
169. (b) The Blue Revolution is similar to the Green Revolution only that it deals
with aquaculture, fish and water preservation for human use.
170. (c) The growth in Agriculture and Allied sectors is a necessary condition for
inclusive growth in India.Agriculture including Allied activities accounted
for about 55% employment in the country according to census 2011.
171. (c) National Cooperation Marketing Federation of India Limited (NAFED)
promotes cooperative marketing, promotes the inter-state trade as well as
export of certain agricultural commodities to many foreign countries. It is
responsible in stabilizing prices of commodities and thus responsible for
the movement of the essential commodities from surplus areas to scarcity
areas.
172. (a)
173. (c) The area under foodgrains has declined in the last two decades and the
average farm size in the country is very small and declining over the years.
174. (c) The Indian dairy sector has acquired substantial growth momentum from
the Ninth Five-Year Plan onwards, as a result of which the country now
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ranks first among the world’s milk producing nations. The per capita
availability of the milk has reached a level of 337g per day in the year
2017, which is more than the world average of 229g per day.
175. (a) The Commission of Agricultural Costs & Prices (CACP since 1985, earlier
named as Agricultural Prices Commission) came into existence in January
1965. It is mandated to recommend minimum support prices (MSPs) to
incentivize the cultivators to adopt modern technology, and raise
productivity and overall grain production in line with the emerging
demand patterns in the country.
176. (c) These exports have marked a growth of 0.8 in the year 2012-13. Recently
India has diversified its export basket for these products.
177. (a) Milk and milk products, exhibited high rates of inflation recently. Pulses,
@UPSC_THOUGHT
MFE, and milk and milk products which together constituted around 30
per cent of the total food expenditure in 2009-10 (2004-05=100, as per the
66th NSSO Round) were responsible for around 42 per cent of food
inflation during the latter period. This signifies that protein sources of
food, both plant and animal, have emerged an important driver of food
inflation in recent period.
178. (b) A study conducted in 2014 found that there are three specific
characteristics associated with high risk farmers: “those that grow cash
crops such as coffee and cotton; those with ‘marginal’ farms of less than
one hectare; and those with debts of 300 Rupees or more.” The study also
found that the Indian states in which these three characteristics are most
common had the highest suicide rates and also accounted for “almost 75%
of the variability in state-level suicides.
179. (b)
180. (b) Rapid rate of increase of population and practice of dividing land equally
among the heirs are responsible for the decrease of per capita holding of
cultivated land in India.
181. (d) Livestock sector employs 8% of the total labour force of India. It includes
many small and marginal families, women and landless agricultural
workers. Out of the total agricultural GDP, livestock sector contributed
about 27% during financial year 2012-13.
182. (b) Bharat Nirman is an Indian business plan for creating and augmenting
basic rural infrastructure. It comprises projects on irrigation, roads
(Pradhan Mantri Gram Sadak Yojana), housing (Indira Awaas Yojana),
water supply (National Rural Driniking Water Programme), electrification
[Rajiv Gandhi Grameen Vidyutikaran Yojana and telecommunication
connectivity.
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183. (d) Buffalo meat was the single largest item exported during the period (Up to
Feb. 2015) with the value of US $ 4410103663.
184. (c) During last decade, tertiary sector has shown remarkable expansion. In the
last decade India has expanded maximum in providing services like IT,
Telecommunication, Healthcare, Tourism which is contributing around
60% to GDP.
Primary Sectors - Primary activities are those which are based on natural
resource. It is called Agriculture sector.
Examples - Types of crops, live stock rearing dairy farming, fishing,?
Secondary Sectors - Secondary sector follows primary activities in which
the natural products are changed to manufacture. It is called Industrial
sector.
@UPSC_THOUGHT
191. (c) The Millenium Development Goals focus on developing countries. There
is one exception : MDG number 8 on developing a global partnership for
development, which includes commitments for developed countries to help
developing countries. An important difference is that the sustainable
Development Goals are meant to apply to all countries, including
developed countries.
Another difference is that the sustainable Development Goals are explicitly
meant to include the three dimensions of sustainable development
economic, social and environmental.
192. (d) Quaternary sector is characterized by the intellectual persons or individuals
or group of individual. It includes the research and development activities.
Mining and quarrying and fishing are concerned with primary sector
@UPSC_THOUGHT
activities.
193. (c) The growth of wire line telephone connections in the last five years are
decreasing every year due to increase in mobile connections. Moreover, the
share of private operations in the wireless telephone is more than 85%. So,
the both statements are correct.
194. (c) “Udyog Bandhu” is an organization of the State Government of Uttar
Pradesh. It assists industrial units in solving time bound establishment and
investment related problems relating to existing and up-coming industries
as well.
195. (d) ASSOCHAM
Head Quarter : New Delhi, President : Sunil Kanoria
R. Shivakumar has been appointed as the chairman of ASSOCHAM.
Chanda Kochar : MD & CEO of ICICI Bank.
196. (c) NASSCOM is the organisation of companies of Information technology.
NASSCOM : It is a trade association of Indian Information Technology and
Business process outsourcing Industry.
197. (a) Software major Infosys Technologies is included in the coveted Nasdaq-
100 Index. This is the first time that an Indian company has found a place
in a stock index outside the country.
198. (b) In February 2007, a “Package for Promotion of Micro and Small
Enterprises” was announced. This includes measures addressing concerns
of credit, fiscal support, cluster-based development, infrastructure,
technology, and marketing. Capacity building of MSME Associations and
support to women entrepreneurs are the other important attributes of this
package.
199. (d) The Electronic industry is responsible for generation of employment.
Bangalore is the hub of electronic industry in the country and is called the
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206. (b) Paper and Paper Board is a forest-based industry. In 1812 the first modern
paper mill of the country was set up at Serampore in West Bengal.
207. (a) Durgapur Steel Plant, SAIL, was set up with the British collaboration in
the late fifties with an initial capacity of one million tonnes of crude steel
per annum.
208. (a) Malanjkhand Copper Project was established in 1982. Initial project has
been set up by Hindustan Copper Ltd to exploit the copper ore through an
open pit mine.
Khetari Copper complex (1967): It is developed & mainted by Hindustan copper
ltd.
Indian copper complex (1930): Process plant to produce 19000 TPA of referred
copper.
@UPSC_THOUGHT
Tajola copper project (1989): Plant to produce 60,000 TPA of continuous cast
wire rod.
209. (a) On August 10, 2005, a ‘Policy Package for Setting up Credit to Small and
Medium Enterprises’ was announced with the objective to double the
credit flow to the sector within a period of five years.
210. (d) GCIL—an American company of chemical sector has been acquired by
Tata Group.
211. (a) Bharti Airtel has acquired Zain Telecom’s African assets in a $10.7 billion
deal. The acquisition of Zain assets will give the Indian mobile market
leader a footprint in 15 African countries.
212. (d) The correctly matched pairs are : Mundra SEZ — Adani Group, CMC Ltd.
— Tata Group
IPCL — Reliance Group. However, Bharti is associated with Airtel.
213. (b) Reliance-Mukesh Ambani, Wipro-Azim Premji, Airtel- Sunil Bharati
Mittal and Nano Car-Ratan Tata. Wipro was established by Mohamed
Hasham Premji in 1945 as a vegetable manufacturer in Amalner,
Maharashtra.
214. (b) The correct locations of the given companies are :
BALCO — Korba
HINDALCO — Renukoot
Indian Aluminium Company — Hirakund
NALCO — Koraput
215. (d) The correct correlation of industries and their fields are :
Basic industry — petroleum
Strategic industry — Arms and Ammunition
Critical industry — Automobile
Goods based industry — Fertilizer
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216. (b) In public sector of India there are basic and heavy industries. Employees
and their jobs are secured in public sector industries. However, all the
public sector companies are not profit-oriented. Some of them have been
established keeping in mind no profit no loss basis for the welfare of the
society.
217. (b) The National Renewal Fund (NRF), was set up in February 1992. It aims
to provide a social safety net to protect the workers in industrial enterprises
from possible adverse consequences of the new economic policy.
218. (d) The first notable attempt in steel industry in India was made in 1874 when
the Bengal Iron Works (BIW) came into being at Kulti, near Asansol in
West Bengal. The Bhilai Steel Plant, located in Bhilai, in the Indian state
of Chhattisgarh was set up with the help of the USSR in 1955. SAIL
@UPSC_THOUGHT
226. (c) Packaging machinery industry, like other industrial machinery is allowed
for 100%. FDI under automatic approval i.e., without prior approval either
of the government or the Reserve Bank of India.
Food processing machinery can be classified under the general category of
industrial machinery which is de-licensed under the current industrial
policy and qualifies for 100% FDI under automatic approval.
227. (a) Miniratna public sector enterprises can be a joint venture, set subsidiary
company or overseas office but with certain conditions i.e., Miniratna-I is
up to Rs. 500 crore or equal to their net worth, whichever is lower.
Miniratna-II: is up to ` 300 crore or up to 50% of their net worth,
whichever is lower. Till now there are more than 50 public sector
enterprises which have been given Miniratna status by the Indian
government.
228. (a) The Bhilai Steel Plant, located in Bhilai, in the Indian state of
Chhattisgarh, was set up with the help of the USSR in 1955. Bokaro Steel
Plant is located in the Bokaro district of Jharkhand. It is the fourth
integrated public sector steel plant in India built with Soviet help in 1972 .
229. (b) In India, in the overall index of industrial production, the indices of eight
core industries have a combined weight of 37-90%. Among those eight
core industries are cement, Fertilizers, Natural gas and Refinery products.
230. (c) A labour intensive industry, as the name suggests, refers to an industry
requiring a huge amount of human labour to produce industrial goods. In
such industries, the proportion of labour used is comparatively higher than
the proportion of capital.
231. (b) TISCO was founded in 1907 by Dorabji Tata. The Bhilai Steel Plant,
located in Bhilai, in the Indian state of Chhattisgarh, was set up with the
help of the USSR in 1955. Bokaro Steel Plant is located in the Bokaro
district of Jharkhand. It is the fourth integrated public sector steel plant in
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India built with Soviet help in 1972. Visakhapatnam Steel Plant, popularly
known as Vizag Steel, is the most advanced steel producer in India with
the help of German and soviet technology founded in 1974.
232. (a) The first newsprint plant was set up in India at Nepanagar in 1948.
233. (c) The erratic trend in production of sugar is mainly due to monsoons and the
output of sugar is influenced by both cane and gur prizes.
234. (d) All the above industrial clusters and the related locations are correctly
matched. Tirupur is famous for textiles, Kishangarh is famous for marbles,
Surat is famous for Gems and Jewellery.
235. (c) In order to give impetus to hydro power growth in the country and to have
a balanced portfolio of power generation, NTPC entered hydro power
business with the 800 MW Koldam hydro project in Himachal Pradesh.
@UPSC_THOUGHT
during the last three years against ` 25,000 crore prescribed earlier.
Further, the criteria on average annual net worth has been relaxed to `
10,000 crore from the earlier limit of 15,000 crore.
242. (d) Industrial sickness can be identified by the following symptoms. These
symptoms act as leading indicators of sickness, and if immediate remedial
actions are not taken, the sickness will grow to the extent that the
organization will find its natural death. Continuous reduction in turnover,
Piling up of inventory, Continuous reduction of net profit to sales ratio,
Short term borrowings at high interest rate, Continuous cash losses leading
to erosion of tangible net worth etc. However, decline of market share is
not an immediate indicator.
243. (b) The LLP will be a separate legal entity, liable to the full extent of its assets,
@UPSC_THOUGHT
with the liability of the partners being limited to their agreed contribution
in the LLP which may be of tangible or intangible nature or both tangible
and intangible in nature. No partner would be liable on account of the
independent or un-authorized actions of other partners or their misconduct.
The liabilities of the LLP and partners who are found to have acted with
intent to defraud creditors or for any fraudulent purpose shall be unlimited
for all or any of the debts or other liabilities of the LLP.
244. (c) Tiruppur is the “knitwear capital” of India. It has spurred up the textile
industry in India for the past three decades. It contributes to a huge amount
of foreign exchange in India. The city exports ` 120 billion worth of
goods. Netaji Apparel Park has 53 companies manufacturing knitwear for
exports. Each unit will be a model to answer the requirements of
international standards in all aspects. In addition to investment of 920
million on infrastructure and factory buildings about 3 billion is being
invested on machinery. The NAP presently provides employment to 15,000
people and generates export revenue of ` 15 billion from the apparels
produced in it. There are about 3000 sewing units, 1326 knitting units, 730
dyeing units and other ancillary units. Some of the world’s largest retailers
including C&A, Switcher SA, Walmart, Primark, Oviesse, Switcher, Polo
Ralph Lauren, Diesel, Tommy Hilfiger, M&S, FILA, H&M, Reebok
import textiles and clothing from Tirupur.
245. (b) The plastic park scheme envisages clusters of plastic industry operations
including small and medium-sized enterprises and recycling operations.
These parks will provide raw materials, power and land for plastic
companies. These parks are expected to generate huge direct and indirect
employment.
246. (a) All comes under the category of Maharatna.
247. (a) The government disinvests to meet the deficit in the budget.
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Token privitisation or deficet privitisation of public sector units occurs when the
Govt. sells 5% of shares.
248. (b) Bengaluru or Bangalore is identified as the hottest outsourcing destination
in the world. Bangalore continues to rule as India’s software hub, with its
availability of skilled resources. The pleasant climate of Bangalore has also
been a factor in Bangalore’s popularity.
249. (d) Dyestuff sector is one of the important segments of chemical industry.
Chemical industry is one of the oldest industries in India. The maximum
consumption of dyestuffs is in Textile industry.
250. (b) Construction falls in infrastructure sector Infra structure sector includes–
roads, railways, ports, airports, electricity, telecommunications, irrigation
and pipelines etc.
@UPSC_THOUGHT
260. (d) Eight Core sectors in India include Coal, Crude Oil, Natural Gas, Refinery
Products, Fertilizers, Steel, Cement and Electricity. Chemical is not
included in this Sector.
261. (d) Construction Industry is not included in Manufacturing Sector.
@UPSC_THOUGHT
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basis of
(a) employment condition
(b) nature of economic activities
(c) ownership of enterprises
(d) use of raw materials
2. Economic liberalisation in India started with
(a) substantial changes in industrial licensing policy
(b) the convertibility of Indian rupee
(c) doing away with procedural formalities for foreign direct investment
(d) significant reduction in tax rates
3. Which of the following areas has been excluded, by the Ministry of
Corporate Affairs, from the ambit of Corporate Social Responsibility
(CSR) activities?
(a) livelihood enhancement and rural development projects.
(b) contributions made ‘directly or indirectly’ to any political party.
(c) promoting preventive health care and sanitation.
(d) making safe drinking water available would be considered as CSR
activities.
4. Which of the following commissions / companies of Indian origin
signed a pact for obtaining oil-blocks in Libya?
(a) Reliance petroleum
(b) Oil India Ltd.
(c) ONGC
(d) BPCL
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5. Which company, adopted the Taj Mahal through the ‘Clean India
Campaign’ of tourism ministry?
(a) Indian oil
(b) BPCL
(c) HPCL
(d) ONGC
6. Classification of an enterprise into public or private sector is based
on [CDS- 2014-I]
(a) number of employees in the enterprise
(b) ownership of assets of the enterprise
(c) employment conditions for workers in the enterprise
@UPSC_THOUGHT
(b) Only II
(c) Both I and II
(d) Neither I nor II
10. During the episode of sustained fall in crude oil prices during the year
2015, which among the following best describes the pricing strategy of
the OPEC countries?
[UGC-2016]
(a) Transfer pricing
(b) Predatory pricing
(c) Defensive pricing
(d) Profit maximising prices
@UPSC_THOUGHT
3. Adopting suitable policies which attract greater FDI and more funds
from FIIs.
Which of the above action/actions can help in reducing the current account
deficit?
(a) 1 and 2
(b) 2 and 3
(c) 3 only
(d) 1 and 3
25. Which one of the following statements with regard to India’s economy
between 1814 to 1860 is not
correct? [CDS-2015-II]
(a) Between 1814 and 1850, four commodities dominated India’s exports-
raw silk, opium, cotton and indigo.
(b) Between 1814 and 1860, five commodities dominated India’s exports-
raw silk, opium, cotton, indigo and jute.
(c) Indigo and raw silk required processing techniques.
(d) Indigo and raw silk were financed by foreign capital.
26. Which among the following will constitute Foreign Direct Investment
(FDI)? [UGC-2016]
(a) Buying a company in the target country
(b) Expanding operations of an existing business in that country
(c) Investing in the shares and stocks of companies in the capital market
(d) Both (a) and (b)
27. Which of the areas given below is/are mainly funded by the
International Development Agency in the developing
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countries? [UGC-2016]
I. Infrastructure
II. Education
III. Environment friendly projects
IV. Health care
Select the correct answer using the codes given below—
Codes :
(a) I, II and IV
(b) I, II and III
(c) I, II and IV
(d) All of these
@UPSC_THOUGHT
[UP-PCS 2012]
(a) Reserve Bank of India
(b) State Bank of India
(c) Ministry of Finance Government of India
(d) Export - Import Bank of India
34. Which among the following is/are true for Real Effective Exchange
Rate of the currency of a country? [UGC-2016]
(a) It is weighted average of the value of rate traded currencies
(b) It is adjusted for inflation rate of prices
(c) It is not adjusted for inflation of prices
(d) Both (a) and (b) are true
35. In the context of the Indian economy, which of the following options
correctly describe the composition of the foreign exchange
resources? [UGC-2016]
(a) Foreign currency + loans from the World Bank + SDRs + Gold
holdings of R.B.I.
(b) Foreign Currency Assets + Gold holdings of R.B.I. + F.D.I.
(c) SDRs + Gold holdings of the R.B.I. + Foreign Currency Assets
(d) Remittances of NRIs + Exports earnings in a year + loans from the
IMF
42. The policy of Special Economic Zone (SEZ) in India was implemented
with effect from
(a) Nov. 1998
(b) Dec. 1999
(c) Nov. 2000
(d) Feb. 2002
43. India’s first port-based Special Economic Zone named International
Container Trans-shipment Terminal (ICTI) is being set-up at?
(a) Kandla
(b) Kochi
(c) Goa
@UPSC_THOUGHT
(d) Tuticorin
44. The SEZ Act 2005 which came into effect in February 2006 has certain
objectives? In this context consider the following :
1. Development of infrastructure facilities
2. Promotion of investment from foreign sources.
3. Promotion of export of services only.
Which of the above is/are objective of this Act?
(a) 1 and 2
(b) 2 only
(c) 2 and 3
(d) 1, 2 and 3
45. In which one of the following places was the Asia’s first Export
Processing Zone (EPZ) set-up?
(a) Santa Cruz
(b) Kandla
(c) Cochin
(d) Surat
46. Which of the following sectors of the Indian Economy is prohibited
from Foreign Direct Investments (FDIs) ?
(a) Retail Trading
(b) Lottery Business
(c) Gambling and Betting
(d) All of the above
47. A great deal of Foreign Direct Investment (FDI) to India comes from
Mauritius comparing with many major and mature economies like UK
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(a) FII helps bring better management skills and technology, while FDI
only brings in capital.
(b) FII helps in increasing capital availability in general, while FDI only
targets specific sectors.
(c) FDI flows only into the secondary market, while FII targets primary
market.
(d) FII is considered to be more stable than FDI.
49. Areas which are engines for economic growth supported by quality
infrastructure and complemented by an attractive fiscal package are
known as
[NDA/NA-SP-2016-I]
(a) Export Processing Zones
(b) Duty Free Tariff Zones
(c) Special Economic Zones
(d) Technology Parks
50. Which of the following is/are not FDI policy change(s) after 2010?
1. Permission of 100 percent FDI in automotive sector.
2. Permitting foreign airlines to make FDI up to 49 percent
3. Permission of up to 51 percent FDI under the government approval
route in multi-brand retailing, subject to specified conditions
4. Amendment of policy on FDI in single-brand product retail trading for
aligning with global practices
Select the correct answer using the code given
below: [NDA/NA-SP-2016-I]
(a) 1 only
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1. (c) In an economy, the sectors are classified into private and public
on the basis of ownership.
Public Ownership - Majority or controlling share (51%) of a firm
by Government.
Private Ownership - Being owned by a private individual or
organization rather then by the state or public.
2. (a) Economic liberalisation in India started with substantial changes
in industrial licensing policy. The LPG Model (Liberalisation,
Privatisation & Globalisation) was introduced by Dr Manmohan
@UPSC_THOUGHT
29. (b) ECGC Ltd. (Export Credit Guarantee Corporation of India Ltd.),
wholly owned by Government of India, was set up in 1957 with
the objective of promoting exports from the country by providing
Credit Risk Insurance and related services for exports.
30. (b) A Rupee Denominated Bond or Masala Bonds are the bonds
issued by an Indian entity in foreign markets and the interest
payments and principal reimbursements are denominated
(expressed) in rupees.
31. (d) The main Ingredients of Globalization of Indian Economy are
Privatization of the public sector, Disbanding of Controls and
Regulations and Deregulation of Trade and Finance.
@UPSC_THOUGHT
41. (d) The balance of payments (BOP) is the method countries use to
monitor all international monetary transactions at a specific
period. BOP includes all external visible and non-visible
transactions, deficit or a surplus of a country.
42. (c) In Nov. 2000, the policy of Special Economic Zone (SEZ) in India
was implemented with a view to overcome the shortcomings
experienced on account of the multiplicity of controls and
clearances; absence of world-class infrastructure, and with a view
to attract larger foreign investment in India.
43. (b) The Kochi International Container Transhipment Terminal
(ICTT), locally known as the Vallarpadam Terminal, is a container
@UPSC_THOUGHT
49. (c)
50. (a)
51. (c) The Special Economic Zones Act, 2005, was passed by
Parliament in May, 2005 which received Presidential assent on the
23rd of June, 2005 and it came into effect on 10th February, 2006.
@UPSC_THOUGHT
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1. Which one among the following countries has the lowest GDP per capita?
(a) China
(b) India
(c) Indonesia
@UPSC_THOUGHT
(a) Davos-Klosters
(b) Nepal
(c) England
(d) Kochi America
9. What is CRISIL ?
(a) Bank
(b) Insurance Company
(c) Depository
(d) Credit Rating Agency
10. Where is the Headquarters of WTO located?
(a) Rome
(b) Geneva
(c) Washington
(d) New York
11. Which country became a member of European Union on 1st July 2013?
(a) Bulgaria
(b) Romania
(c) Croatia
(d) Serbia
12. POSCO, the steel company is associated with the country?
(a) South Korea
(b) Japan
(c) France
(d) Germany
13. Which country started privatisation of state-owned enterprises as a major
state policy?
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(b) Uruguay
(c) Tokyo
(d) Marrakesh
16. World Investment Report is published by which of the following ?
(a) WEF
(b) WTO
(c) GATT
(d) UNCTAD
17. Which of the following group of countries has formed the NAMA-11 of
World Trade Organization ?
(a) Developed countries
(b) Least developing countries
(c) Developing countries
(d) None of the above
18. Which of the following agencies is not the rating agency of an economy ?
(a) Fitch Group
(b) CRISIL
(c) Moody’s Investor Service
(d) Samuel’s Investor Group
19. Which one of the following organisations is related with Doha Development
Agenda ?
(a) IMF
(b) WTO
(c) World Bank
(d) UNO
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20. Which of the following credit rating agencies is the ‘Big Three Credit rating
agencies’ of the world ?
(a) Fitch Group
(b) Moody’s Corporation
(c) Standard and Poor’s
(d) All of the above
21. Which one of the following International institutions has offered the
concessional loans and grants to the world’s poorest developing countries ?
(a) IFC
(b) IDA
(c) IMF
(d) WB
@UPSC_THOUGHT
22. Which one of the following major markets has the highest share of
composition of exports of ores and minerals in the world ?
(a) United States
(b) India
(c) Brazil
(d) China
23. The capital of IMF is generated by contribution of the
(a) Credit
(b) Deficit financing
(c) Member nations
(d) Borrowings
24. Which one of the following countries is the first borrower of fund from the
International Monetary Fund ?
(a) United States
(b) France
(c) Spain
(d) India
25. Which one of the following institutions is related with the Green / Blue Box
subsidies ?
(a) United Nations
(b) World Bank
(c) World Tourism Organization
(d) World Trade Organization
26. Which one of the following is the final session of the General Agreement on
Tariff- and Trade (GATT) ?
(a) Singapore session
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(d) UNCTAD
33. What does S & P 500 relate to ?
(a) Super computer
(b) A new technique in e-business
(c) A new technique in bridge building
(d) An index of stocks of large companies
34. Which one of the following is the proposed currency of the Gulf
Cooperation Council (GCC) ?
(a) Khaleeji
(b) Sucre
(c) Dinar
(d) None of these
@UPSC_THOUGHT
35. Which one of the following is the correct sequence of the countries having
Foreign Exchange Reserve from high to low?
(a) China – Russia – India – France
(b) China – France – India – Russia
(c) France – China – Russia – India
(d) France – China – India – Russia
36. Which one of the following is correctly matched?
(a) Kospi Index: South Korea
(b) TSEC Weighted Index: Thailand
(c) SET Index: China
(d) All of the above
37. Which one of the following is the recognised lender of the External
Commercial Borrowings in the international Capital Market ?
(a) Export Credit Agencies
(b) Asian Development Bank
(c) IFC
(d) All of the above
38. Special Drawing Rights (SDRs) is available at
(a) IBRD
(b) IMF
(c) IDA
(d) OECD
39. Which sister organisation of the World Bank helps private activity in
developing countries by financing projects with long-term capital in the
form of equity and loans?
(a) Asian Development Bank
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(b) IMF
(c) International Finance Corporation
(d) International Development Association
40. As regards the use of international food safety standards as reference point
for the dispute settlements, which one of the following does WTO
collaborate with?
(a) International Organization for Standardization.
(b) International Federation of Standards Users.
(c) Codex Alimentarius Commission.
(d) World Standards Cooperation.
41. Which of the following is an example of “Portfolio Investment”?
(a) An American places funds in a savings account in Canada
@UPSC_THOUGHT
(b) Tokyo Bank of Japan buys Union Bank of the United States
(c) Saturn Corp. (owned by General Motors) builds a new factory in Tennessee
(d) An American puts $10,000 into a money market fund
42. In which one of these countries do more than 80% say national economic
conditions are good?
(a) Argentina
(b) China
(c) Kenya
(d) Philippines
43. According to the monetarists, in the long-run, the Phillips Curve is:
(a) vertical
(b) horizontal
(c) downward sloping
(d) upward sloping
44. What is happening with the import of Chinese toys in India?
(a) Indian toys are selling more
(b) Indian consumers are buying less
(c) Indian consumers are getting more choice at cheaper rates
(d) Chinese consumers are falling short of choice
45. Special drawing rights are not
(a) a credit line allocated by the IMF to member countries according to each
country’s quota
(b) backed by US dollars.
(c) the IMF’s unit of account.
(d) a basket of five currencies.
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46. MILA is a stock exchange not involving which of the following countries’
stock exchanges?
(a) Chile
(b) Peru
(c) Colombia
(d) Cuba
47. In which of the following countries was a National Exchange Control
Administration (CADIVI) set up to approve all legal purchases of foreign
currency?
(a) Brazil
(b) Spain
(c) Venezuela
@UPSC_THOUGHT
(d) Mexico
48. Multilateral Investment Guarantee Agency (MIGA) is a part of the—
(a) United Nations
(b) World Economic Forum
(c) World Trade Organisation
(d) World Bank
49. The functions of the International Monetary Fund include all of the
following except…
(a) to provide emergency loans to countries facing balance of payments
problems.
(b) to monitor macroeconomic developments continuously in member countries.
(c) to serve as the world central bank.
(d) to provide a line of credit for each member country.
50. What percentage of currency devaluation was allowed by the IMF in the
Bretton Woods Agreement?
(a) 10 %
(b) 7%
(c) 20 %
(d) 15 %
51. In which year was the new currency Euro introduced?
(a) 1983
(b) 2001
(c) 1999
(d) 1995
52. Which of the following constitutes the world bank?
1. International Bank for Reconstruction and Development.
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4. Promotion of trade between the former East Block countries and the western
world.
Select the correct answer using the codes given below :
(a) 1, 2, 3 and 4
(b) 1 and 2
(c) 2 and 3
(d) 1 and 4
54. Match List I with List II and select the correct answer using the codes given
below the lists :
List I List II
A. WTO 1. Provides loans to address short term
balance of payments.
B. IDA 2. Multi-lateral trade negotiation body
C. IMF 3. Sanction of soft loans
D. IBRD 4. Facilitating lending and borrowing
for reconstruction and development
A B C D
(a) 2 3 4 1
(b) 2 3 1 4
(c) 3 2 4 1
(d) 3 2 1 4
55. A country is said to be in a debt trap if :
(a) it has to abide by the conditionalities imposed by the International Monetary
Fund.
(b) it has to borrow to make interest payments on outstanding loans.
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2. Mexico
3. South Africa
According to UNCTAD, Which of the above is/are categorized as “Emerging
Economies”
(a) 1 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3.
61. Stiglitz commission established by the President of the United Nations
General Assembly was in the international news. The commission was
supposed to deal with:
(a) The challenges posed by the impending global climate change and prepare a
@UPSC_THOUGHT
road map.
(b) The working of the global financial systems and to explore ways and means
to secure a more sustainable global order.
(c) Global terrorism and prepare a global action plan for the mitigation of
terrorism.
(d) Expansion of the United Nations Security Council in the present global
scenario.
62. In the context of bilateral trade negotiations between India and European
Union, what is the difference between European commission and European
Council?
1. European Commission represents the EU in trade negotiations whereas
European Council participates in the legislation of matter pertaining to
economic policies of the European union.
2. European commission comprises the heads of state or government of
member countries whereas the European council comprises the persons
nominated by European parliament.
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
63. Karl Marx explained the process of class struggle with the help of which
one of the following theories?
(a) Empirical Liberalism
(b) Existentialism
(c) Darwin’s Theory of Evolution
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(d) 1, 2 and 3.
65. Regarding the International Monetary Fund, which one of the following
statements is correct?
(a) It can grant loans to any country.
(b) It can grant loans to only developed countries.
(c) It can grant loans to only member countries.
(d) It can grant loans to the central bank of a country.
66. IMF was established to meet which of the following objectives?
1. Promoting international monetary co-operation.
2. Expanding international trade.
3. Lessening the disequilibrium in balance of trade.
4. Avoiding competitive exchange depreciations.
Codes :
(a) 1, 2 and 3
(b) 1, 3 and 4
(c) 2 and 4
(d) 1, 2, 3 and 4
67. World Bank helps countries with loans for the purpose of :
(a) Reconstruction and development
(b) Stimulating private investment
(c) Tackling foreign exchange crises
(d) Meeting deficits in government budget.
68. ‘The Doing Business Report’ is prepared by which of the following
organisations every year ?
(a) World Bank
(b) International Monetary Fund (IMF)
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1. Domestic Support
2. Market access
3. Export Subsidies
Which of the following pillars given above is/are included in Agreement on
Agriculture of the WTO?
(a) Only 2
(b) 1 and 3
(c) 2 and 3
(d) All of these
78. The unbalanced growth model was propounded first by
1. Albert O. Hirschman
2. H. S. Singer and Raul Prebisch
@UPSC_THOUGHT
(c) 1 and 4
(d) 3 and 4
81. Most important theory of increasing public expenditure is associated with
1. Adolph Wagner’s hypothesis
2. Critical limit hypothesis
3. Administrative efficiency hypothesis
4. Stability of income hypothesis
Codes:
(a) 1 and 2
(b) 1 and 3
(c) 1 only
(d) 3 and 4
@UPSC_THOUGHT
Directions : Read the following questions and select the right combination of
Assertion (a) and Reason (R) from the codes given below.
82. Assertion (a): There is a natural tendency to collude under oligopoly.
Reason (R): Inter-dependence of firms in oligopolistic markets.
Codes:
(a) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
(b) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(c) (a) is correct, but (R) is incorrect.
(d) (a) is incorrect, but (R) is correct.
83. Assertion (a) : In short run, the marginal cost of output is the cost of
additional labour and materials used in production.
Reason (R): Materials and labour used in production alone vary in short run.
Codes:
(a) (a) is correct, but (R) is incorrect.
(b) (a) is incorrect, but (R) is correct.
(c) Both (a) and (R) are correct, but (R) is the correct explanation of (a).
(d) Both (a) and (R) are incorrect.
84. Assertion (a): Post reform liberal trade policies have stimulated India’s
growth.
Reason (R): Private enterprise got opportunities to contribute to growth of Indian
manufacturing industries.
Codes:
(a) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
(b) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(c) Both (a) and (R) are incorrect.
(d) (a) is incorrect, but (R) is correct.
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85. Assertion (a): Use of goods and services from which one can be excluded
are pure private goods.
Reason (R): Such goods and services are not provided free by the State.
Codes:
(a) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
(b) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(c) (a) is correct, but (R) is incorrect.
(d) (a) is incorrect, but (R) is correct.
86. Assertion (a): ‘A country is poor because it is poor’.
Reason (R): Income of a poor country is low, so its savings and investment are
low. Low investment limits its productive capacity which leads to low
output and income.
@UPSC_THOUGHT
Codes:
(a) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(b) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
(c) (a) is correct, but (R) is incorrect.
(d) (a) is incorrect, but (R) is correct.
87. Assertion (a): All historical events are the result of a continuous economic
struggle between different classes and groups in a society.
Reason (R): This struggle is because of the conflict between the mode of
production and the value attached to the roles of different agents of
production.
Codes:
(a) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(b) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
(c) (a) is correct, but (R) is incorrect.
(d) (a) is incorrect, but (R) is correct.
Directions : Read the questions and select the correct sequence from the codes
given below.
88. Identify the order of chronological development of the theory of demand.
1. Marshall’s theory of demand
2. Indifference curves
3. Revealed preference theory
4. Weak Preference ordering theory of demand.
Codes:
(a) 1, 3, 4, 2
(b) 4, 2, 1, 3
(c) 1, 3, 2, 4
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(d) 1, 2, 3, 4
89. Identify the correct chronological order of the following theories.
1. Cambridge version of quantity theory of money.
2. Fisher’s version of quantity theory of money.
3. Tobin’s theory of demand for money.
4. Baumol’s theory of demand for inventory.
Codes:
(a) 3, 4, 1, 2
(b) 2, 1, 4, 3
(c) 4, 1, 2, 3
(d) 1, 2, 3, 4
90. Identify the correct chronological order of the following.
@UPSC_THOUGHT
(a) 4, 3, 2, 1
(b) 3, 2, 1, 4
(c) 2, 1, 4, 3
(d) 1, 4, 3, 2
93. Arrange the structure of balance of payments accounts in which these items
appear.
1. Capital account
2. Errors and omissions
3. Current account
4. Official settlements account
Codes:
(a) 1, 2, 3, 4
@UPSC_THOUGHT
(b) 3, 1, 4, 2
(c) 4, 3, 2, 1
(d) 3, 4, 1, 2
94. Determine the order in which the following were developed.
1. Fisher’s F test of significance of difference between the means of more than
two samples.
2. Gosset’s t-test of difference between the means of two samples.
3. Pearson’s correlation coefficient.
4. Spearman’s rank correlation coefficient.
Codes:
(a) 1, 2, 3, 4
(b) 2, 1, 3, 4
(c) 3, 2, 1, 4
(d) 4, 1, 2, 3
Directions (Qs. 95-102) : Read the following questions and match the correct
pair from List-I and List-II. Use the codes given below for answering-
95.
List - I List - II
A. Kinked demand 1. William Baumol curve hypothesis
B. Sales maximization 2. Paul Sweezy model of oligopoly
C. Social Welfare Function 3. Adam Smith
D. Law of Invisible hand 4. Bergson
Codes:
A B C D
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(a) 4 3 1 2
(b) 2 1 4 3
(c) 2 3 1 4
(d) 1 4 3 2
96.
List - I List - II
A. Psychological 1. Irving Fisher Law of
Consumption
B. Time preference 2. J. M. Keynes theory of
interest
@UPSC_THOUGHT
98.
List - I List - II
A. Organic Composition 1. Albert O. Hirschman
of Capital
B. Doctrine of Natural, Law 2. Schumpeter
C. Innovation 3. Karl Marx
D. Doctrine of Unbalanced 4. Adam Smith Growth
Codes:
@UPSC_THOUGHT
A B C D
(a) 3 4 2 1
(b) 4 3 1 2
(c) 2 1 3 4
(d) 1 2 4 3
99.
List - I List - II
A. Low Income 1. Karl Marx
Equilibrium Trap
B. Poverty Measurement 2. Adam Smith
C. Laissez faire 3. Richard R. Nelson
D. Industrial Reserve Army 4. Suresh Tendulkar
Codes:
A B C D
(a) 1 2 4 3
(b) 3 4 2 1
(c) 4 3 1 2
(d) 2 1 3 4
100.
List - I List - II
A. Law of Absolute 1. Haberler Cost Advantage
B. Doctrine of 2. Heckscher-Ohlin Comparative
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Cost Advantage
C. Modern Theory of 3. Adam Smith International
Trade
D. Opportunity Cost 4. Ricardo Principle
Codes:
A B C D
(a) 4 2 1 3
(b) 3 4 2 1
(c) 2 3 4 1
@UPSC_THOUGHT
(d) 1 4 3 2
101.
List - I List - II
A. Monetarism 1. R. F. Kahn
B. Employment 2. T. Haavelmo multiplier
C. Multiplier effect 3. John Muth of balanced budget
D. Rational 4. Milton Friedman expectation
hypothesis
Codes:
A B C D
(a) 2 4 3 1
(b) 4 1 2 3
(c) 1 3 4 2
(d) 3 2 1 4
102.
List - I List - II
A. Theory of Probability 1. Single value to represent
distribution
B. Mean events 2. Uncertain
C. Normal Distribution 3. Mini replica of population
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(c) Fisher
(d) Marshall-Edgeworth
110. According to Milton Friedman, Quantity Theory of Money deals with
(a) Prices
(b) Income
(c) Supply of Money
(d) Demand for Money
111. European Union decided to enforce European Stability Mechanism (ESM).
ESM is a system to achieve / safeguard–
(a) financial stability
(b) political stability
(c) free access to oil reserves in UAE and Kuwait
(d) free access to uranium reserves in Libya
(e) interests of all the members in case of attack by Iran or any other country
112. Match the following
List I List II
(Phase of Industrial (Features)
Revolution)
A. First Phase 1. Rise of steel, chemical,
electricity industries
B. Third Phase 2. Rise of cotton mill
C. Second Phase 3. Rise of steam engine
D. Fourth Phase 4. Rise of petrochemicals,
jet aircraft, computers
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[CDS-2011-II]
Codes :
A B C D
(a) 2 3 1 4
(b) 2 1 3 4
(c) 4 1 3 2
(d) 4 3 1 2
113. Which of the following statements are correct?
[CDS-2011-II]
1. The global economy relied on oil for much of the 20th century as a portable
and indispensable fuel.
@UPSC_THOUGHT
[UP-PCS 2015]
(a) Proper utilization of resources
(b) Increase in Productivity
(c) Development of skill
(d) All of the above
129. Which one of the following is not an adverse effect of population growth
in an economy? [UP-PCS 2015]
(a) Increase in the size of working population.
(b) Reduced size of holdings.
(c) Increasing unemployment.
(d) Reduced percapita availability of food grains.
130. Which one of the following is the primary sector of India’s
@UPSC_THOUGHT
(c) R. Nurkse
(d) C.N. Vakil and P.R. Brahmanand
135. The ‘IRS’ is a liquid financial derivative instrument which can be used to
hedge against or speculate on changes in—
[BOM-PO 2016]
(a) Stock market indices
(b) Exchange rates
(c) Commodity prices
(d) Interest rates
136. The ‘Ease of Doing Business Index’ is prepared and published by
— [BPSC 2017]
(a) World Trade Organization
(b) World Bank Group
(c) United Nations
(d) European Union
137. In India, other than ensuring that public funds are used efficiently and for
intended purpose, what is the importance of the office of the Comptroller
and Auditor General (CAG)?
1. CAG exercises exchequer control on behalf of the Parliament when the
President of India declares national emergency/financial emergency.
2. CAG reports on the execution of projects or programmes by the ministries
are discussed by the Public Accounts Committee.
3. Information from CAG reports can be used by investigating agencies to
press charges against those who have violated the law while
managing public finances.
4. While dealing with the audit and accounting of government companies,
CAG has certain judicial powers for prosecuting those who violate
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the law.
Which of the statements given above is/are correct?
(a) 1, 3 and 4 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
138. The ‘GDR’ represents ownership of an underlying number of shares of a
foreign company and is used to invest in companies from developing
markets by investors in developed markets. The alphabet ‘G’ in the
abbreviation ‘GDR’ stands for— [IDBI 2016- 2017]
(a) Global
(b) Group
@UPSC_THOUGHT
(c) Guaranteed
(d) General
139. The number of times a unit money exchanges hands during a unit period of
time is known as—
[IDBI 2016- 2017]
(a) Velocity of circulation of money
(b) Face of circulation of money
(c) Transactions velocity of money
(d) Income velocity of money
140. ‘TRIMs’ stands for— [UK-PSC 2016]
(a) Trade Related Income Measures
(b) Trade Related Investment Measures
(c) Trade Related Innovative Measures
(d) Trade Related Incentive Measures
141. Human Development Index is a composite index of which of the
following? [UK-PSC 2016]
(a) Nutritional status, quality of life and per capita GDP
(b) Poverty, life expectancy and educational attainment
(c) Life expectancy, educational attainment and per capita income
(d) Inflation, Unemployment and per capita GDP
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1. (b) India, among the countries has the lowest GDP per capita.
2. (a) Sustainable development is that development that meets the needs of
the present without compromising the ability of future generations to
meet their own needs. Sustainable development is a case of inter-
generational sensibility in respect of use of natural resources.
Sustainable development - Economic development that is conducted without
depletion of natural resources.
3. (c) Sustainable development is a case of intergenerational equity in respect
of use of natural resources.
Sustainable development is defined as a process of meeting human
@UPSC_THOUGHT
Headquarters (Mumbai).
10. (b) The World Trade Organization (WTO) is an organization that
supervises and liberalizes international trade. It officially commenced
on 1 January 1995 under the Marrakech Agreement, replacing the
General Agreement on Tariffs and Trade (GATT) The headquarters of
World Trade Organization (WTO) is located in Geneva.
11. (c) Croatia applied for EU membership in 2003 and was in negotiations
from 2005 until 2011.On 9 December 2011 leaders from the EU and
Croatia signed the accession treaty. The country became the 28th EU
member country on 1 July 2013.
European Union : Political & Economic union of 28 member states that are
located primarly in Europe.
12. (a) POSCO is a multinational steel making company headquartered in
Pohang, South Korea. It is the world’s fourth largest steelmaker.
13. (a) The United Kingdom, under Margaret Thatcher started privatisation of
state-owned enterprises as a major state policy. The Ridley report
devised for the Thatcher shadow cabinet, recommended a policy of
breaking up the public sector and dismembering unions.
State owned enterprise: It is a legal entity that undertakes commercial
activities on behalf of the state.
14. (a) The International Development Association (IDA) is an international
financial institution which offers concessional loans and grants to the
world’s poorest developing countries. The IDA is a member of the
World Bank Group and is headquartered in Washington DC. It is
administered by the International Bank for Reconstruction and
Development (IBRD).
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Standard & Poor’s having approximately 40% each, and Fitch around
15%.
21. (b) International Development Association has offered the concessional
loans and grants to the world’s poorest developing countries. The IDA
is a member of the World Bank Group and is administered by the
International Bank for Reconstruction and Development(IBRD).
22. (d) Major share of ore and mineral exports comes from the export of iron
ore from China.
23. (c) The capital of IMF is generated by contribution of the member nations.
Each member of the IMF is assigned a quota, based broadly on its
relative size in the world economy, which determines its maximum
contribution to the IMF’s financial resources. On joining the IMF, a
country normally pays up to one-quarter of its quota in the form of
widely accepted foreign currencies (such as the U.S. dollar, euro, yen,
or pound sterling) or Special Drawing Rights (SDRs). The remaining
three-quarters are paid in the country’s own currency.
Deficit financing : Govt funding of spending by borrowings.
24. (b) France is the first borrower of fund from the International Monetary
Fund. It borrowed funds from IMF on 8th May 1947.
From March 1st, 1947 IMF begins operation and May 8, 1947 first drawing
from IMF (France).
25. (d) In order to qualify for the “green box”, a subsidy must not distort trade,
or at most cause minimal distortion. These subsidies have to be
government-funded (not by charging consumers higher prices) and
must not involve price support. The blue box is an exemption from the
general rule that all subsidies linked to production must be reduced or
kept within defined minimal (“de minimis”) levels. It covers payments
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26. (d) Uruguay session is the final session of the General Agreement on
Tariffs and Trade (GATT).The Uruguay Round lasted from 1986–94. It
was the most ambitious round to date, hoping to expand the
competence of the GATT to important new areas such as services,
capital, intellectual property, textiles, and agriculture. One of the most
significant changes in the Uruguay round was the creation of the World
Trade Organization (WTO).
27. (d) China has the highest share in the world export among the Asian
countries.It exports 27% of GDP as goods and services. However, India
exports 24% of its GDP .
28. (a) If a company exports a product at a price lower than the price it
normally charges on its own home market, it is said to be “dumping”
the product .India is the top user of the anti-dumping measures in the
world in the last decade.
29. (a) Sri Lanka is the first country to sign CEPA with India. India and Sri
Lanka signed the bilateral Comprehensive Economic Partnership
Agreement (CEPA) on August 1, 2008 on the sidelines of the SAARC
Summit.
30. (d) The Global Competitiveness Report (GCR) is a yearly report published
by the World Economic Forum. Since 2004, the Global
Competitiveness Report has ranked countries based on the Global
Competitiveness Index.
31. (c) The Agreement on Trade Related Aspects of Intellectual Property
Rights (TRIPS) is an international agreement administered by the
World Trade Organization (WTO). It sets down minimum standards for
many forms of intellectual property (IP) . It was negotiated at the end
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Agreement, the IMF was to be the keeper of the rules and the main
instrument of public international management. The Fund commenced
its financial operations on 1 March 1947. IMF approval was necessary
for any change in exchange rates in excess of 10%.
51. (c) The euro was introduced to world financial markets as an accounting
currency on 1 January 1999, replacing the former European Currency
Unit (ECU) at a ratio of 1:1 (US$1.1743).
52. (a) World Bank and International Monetary Fund (IMF) were established
in Dec, 1944 on the recommendation of Bretton Wood Conference.
Five constituents of the world bank are :
IBRD, IFC, IDA, MIGA and ICSID.
53. (a) All the given statements are correct regarding the World Trade
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three approaches. The first of the three approaches was to renew the
political contacts and understanding with the member states of the
ASEAN. The second was to achieve economic interactions such as
science aand technology, investment and trade etc. with these countries
and the third was to strengthen the links of defense and strategy with
them.
65. (c) The IMF is an intergovernmental organization that oversees the global
financial system by taking part in the macroeconomic policies of its
established members, in particular those with an impact on exchange
rate and the balance of payments.
66. (a) The three main objectives of the IMF include the elimination of any
existing exchange controls, the establishment of currency convertibility
and maintenance of stable exchange rates, along with an extension of
payments and multi-lateral trade. The IMF also functions as a credit
institution in foreign exchange and provides machinery for
international consultations.
67. (a)
68. (a) Doing business report is a series of annual reports measuring the
regulations that enhance business activity and those that constrain it. It
is published by World Bank Group.
69. (a)
70. (d)
71. (a)
72. (b) Regarding WTO membership, over 75% of WTO members are from
developing countries, and the membership allows them access to
develop markets at lower tariff.
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73. (c) The objectives of the Bretton Woods system is to maintain the
exchange rate by trying its currency to the US dollar and to bridge
temporary imbalances of payments.
74. (d) Non-Agricultural Market Access (NAMA) negotiations of WTO covers
manufacturing products, fuel and mining products, fish and fish
products and forestry products.
75. (b)
76. (b)
77. (d) Agreement on Agriculture (AoA) constitutes of domestic support,
market access and export subsidies.
78. (a)
79. (c)
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80. (c)
81. (c)
82. (a)
83. (c)
84. (a)
85. (a) A private good is defined in economics as a good that exhibits these
properties (1) Excludable – the owners in possession of the good can
exercise private property rights, preventing a class of consumers (e.g.,
those who have not paid for it) from using the good or consuming its
benefits (2) Rivalrous – consumptions by one consumer prevents
simultaneous consumption by other consumers. Private goods satisfy
an individual want while public goods satisfy a collective want of the
society.
86. (b)
87. (b)
88. (d) Marshall’s cardinal utility analysis is the oldest theory of demand
propounded in 1920. Indifference curve technique was first of all
invented by Edge-worth and then Hicks and Allen (1936) put forward
the indifference curve approach based on the notion of ordinal utility.
Then Samuelson (1938) propounded Revealed Preference theory and
finally Hicks in 1956 gave Weak Preference ordering theory of
demand.
89. (b) Quantity theory of money was developed by Simon New-comb, Alfred
de Foville, Irving Fisher and Ludwig Von Mises in the latter 19th and
early 20th century, Alfred Marshall, A.C. Pigou and J. M. Keynes
(before he developed his own, eponymous school of thought)
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93. (b) The current account : The current account is used to mark the inflow
and outflow of goods and services into a country. Earnings on
investments, both public and private, are also put into the current
account.
The capital account : The capital account is where all international capital
transfers are recorded. This refers to the acquisition or disposal of non-
financial assets (for example, a physical asset such as land) and non-
produced assets, which are needed for production but have not been
produced, like a mine used for the extraction of diamonds.
The Official Settlement Account of The Financial Account : In the financial
account, international monetary flows related to investment in business,
real estate, bonds and stocks are documented. Aslo included are
government-owned assets such as foreign reserves, gold, Special
drawing rights (SDRs) held with the International Monetary Fund,
private assets held abroad, and direct foreign investment. Assets owned
by foreigners, private and official, are also recorded in the financial
account.
Errors and Omissions : The errors may be due to statistical discrepancies and
omissions may be due to certain transactions that may not be recorded.
94. (c)
95. (b)
96. (c)
97. (b)
98. (a)
99. (b)
100. (b)
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101. (b)
102. (c)
103. (a) Functional Finance is a heterodox macroeconomic theory developed by
Abba Lerner during World War II that seeks to eliminate economic
insecurity (i.e., the business cycle) through government intervention in
the economy. Functional finance emphasizes the end result of
interventionist policies on the economy and is based on three major
beliefs:
1. It is the role of government to stave off inflation and unemployment by
controlling consumer spending through the raising and lowering of
taxes.
2. The purpose of government borrowing and lending is to control interest
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were only rough tracks; and the sea, never far from any parts of Britain,
makes transport of heavy goods easy between coastal cities.
115. (b) The WBG came into formal existence on 27 December 1945 following
international ratification of the Bretton Woods Agreements. The
Group’s headquarters are in Washington, D.C. It was created in 1944 to
help Europe rebuild after World War II. Its mission is defined by two
goals - to end extreme poverty by 2030 and to boost prosperity among
the poorest 40 percent in low- and middle-income countries. The World
Bank comprises of five institutions. They are :
(1) International Bank for Reconstruction and Development(IBRD),
(2) The International Development Association (IDA),
(3) The International Finance Corporation (IFC),
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of “Cash Balance Approach” was given by Alfred and Karl Marx gave
the idea of “Organic Composition of Capital”
134. (d) The major contributions of C.N. Vakil to Economics are; Planning,
Wage-Goods Model, Role of Technological Progress, Consumption
Multiplier, Poverty, Deficit Financing and Public Expenditure,
International Trade, Extension Work and Inflation.
135. (d) An interest rate swap (IRS) is a liquid financial derivative instrument in
which two parties agree to exchange interest rate cash flows.
136. (b) The Ease of Doing Business Index is prepared by World Bank Group.
137. (c) The CAG report is kept before the Parliament and is examined by the
Public Accounts Committee of Parliament, which brings to the notice
of Parliament any discrepancies found by it.
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