Target Prelims 2021

Indian Economy based Current Affairs: 1

Q1. Consider the following statements:

1. The household savings have consistently increased in the last five years.
2. The gross domestic savings have consistently increased in the last five years.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false

Q2. Consider the following statements regarding GDP:

1. India’s GDP in nominal terms is higher than its GDP in terms of PPP.
2. China holds the first position when GDP is measured in terms of PPP.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false
Q3. Consider the following statements:
1. Pent up demand is generally observed post recession or depression.
2. Pent up demand is seen in case of fast moving consumer goods.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false

Q4. Consider the following statements regarding K-shaped recovery:

1. The sectors/sections recover at same rates.
2. It deepens the inequality in the economy.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false

Q5. Consider the following statements regarding V-shaped recovery:

1. It is characterized by a quick decline and slow pace of recovery.
2. In this scenario the jobs are permanently lost.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false
Q6. Consider the following statements:
1. Marginal Propensity to save (MPS) remains constant at all the income levels.
2. Poor have a higher marginal propensity to consume than the rich.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false
Q7. Consider the following statements regarding the GDP growth for FY21:
1. India registered a recession in the first two quarters.
2. Agriculture sector was the only sector to register a positive growth for full financial
year.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false
Q8. Consider the following statements:
1. GDP growth rate for FY21 has been the sharpest contraction since independence.
2. Indian economy has registered a negative growth rate just three times in its history.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false
Q9. Consider the following statements:
1. India’s PCI for financial year 20-21 is over $2200.
2. India’s PCI for FY21 is lower than that of Bangladesh.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false

Q10. Which of the following are examples of derived demand:

1. Demand for li-ion batteries.
2. Demand for oil palm seeds.
3. Demand for consumer goods.
4. Demand for labour.
Choose the correct option:
a) 1 and 2
b) 1, 2 and 4
c) 1, 3 and 4
d) 1, 2, 3 and 4

Q11. Which of the following are likely outcomes of higher inflation rate in the domestic
market:
1. Higher real rate of returns.
2. Higher yields on bonds.
3. Increasing competitiveness of exports.
4. Depreciation in rupee.
Choose the correct option:
a) 1, 2 and 3
b) 2 and 4
c) 1, 3 and 4
d) 1, 2, 3, 4
Q12. Which of the following may cause inflation in India:
1. Higher commodity prices in the global market.
2. Increasing government borrowing.
3. Production cuts announced by OPEC.
4. RBI selling G-securities in the market.
5. Depreciation of rupee.
Choose the correct option:
a) 1, 2 and 3
b) 1, 3 and 5
c) 1, 2, 3 and 5
d) 1, 2, 3, 4 and 5

Q13.Consider the following statements:

1. Core inflation has a wider basket coverage than headline inflation.
2. In the last five years, the monthly WPI rate has never entered into a negative
territory.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false
Q14. Which of the following statement/s is/are true:
1. To establish the MPC, the RBI Act 1934 was amended.
2. MPC has to meet at least 4 times in a year.
3. CPI is taken as nominal anchor for decision making in the MPC.
Choose the correct option:
a) Only 1
b) Only 1 and 2
c) Only 1 and 3
d) 1, 2 and 3

Q15. Consider the following statements:

1. Base effect refers to an event in the past which will cause inflation in the coming
months.
2. One of the causes of the Inflation rates in the recent months is base effect.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false

Q16. Consider the following statements:

1. WPI was launched in 1974.
2. For the calculation of WPI, the price data for a total 697 items involving goods and
services are considered.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false
Q17. Which of the following committees are associated with rebasing of the WPI:
1. Saumitra Chaudhuri Committee
2. Ramesh Chand Committee
3. Abhijit Sen Committee
Choose the correct option:
a) Only 2
b) 1 and 2 only
c) 2 and 3 only
d) 1, 2 and 3

Q18. Which of the following are released by the labour bureau:

1. CPI-IW
2. CPI-RL
3. CPI-AL
4. CPI-UNME
Choose the correct option:
a) 1 and 2
b) 2 and 3
c) 1, 2 and 3
d) 1, 2, 3 and 4

Q19.Consider the following statements:

1. CPI-AL is used to revise Dearness Allowance (DA) of the central government
employees.
2. CPI-IW is used to revise the MGNREGA wages.
Which of the statements given above is/are correct?
a) Only 1
b) Only 2
c) Both 1 and 2
d) Neither 1 nor 2
Q20. Consider the following statements regarding CPI-IW:
1. The base year has been revised to 2011-12.
2. The number of items covered under this is 463.
3. After rebasing the weightage for food and beverages has been reduced to approx
39%
Which of the statements given above is/are correct?
a) Only 1 and 2
b) Only 2
c) Only 2 and 3
d) 1, 2 and 3

Q21. Consider the following statements:

1. The current dearness allowance given to central government employees is 28%
2. DA is announced in the beginning of financial year.
Which of the statements given above is/are correct?
a) Only 1
b) Only 2
c) Both 1 and 2
d) Neither 1 nor 2
Q22. The term cost push inflation often appears in the newspaper. Which of the following
are the causes for this:
1. Increasing cost of commodities in the international market.
2. Government reducing the income tax rates.
3. Government borrowing heavily from the market.
Choose the correct option:
a) Only 1
b) Only 1 and 2
c) Only 1 and 3
d) 1, 2 and 3

Q23. Consider the following statements regarding electric vehicles

1. The Govt. has been providing incentives on the domestically manufactured and
imported electric vehicles to boost their consumption.
2. The luxury vehicles imported attract a uniform import duty of 100%.

Which of the statements given above is/are correct?

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2

Q24. Consider the following statements regarding FAME II:

1. It aims to create demand for electric vehicles in two wheeler and four wheeler
segment only
2. It will be implemented for a period of three years.
Which of the statements given above is/are correct?
a) Only 1
b) Only 2
c) Both 1 and 2
d) Neither 1 nor 2
Q25. Consider the following statements regarding the global minimum corporate tax
proposal:
1. Countries have agreed for minimum effective tax rate of 15%
2. It has two pillars.
3. These two pillars are applicable for all the MNEs with a global turnover of over 750
million euros.
Which of the statements given above is/are correct?
a) Only 1
b) Only 1 and 2
c) Both 1 and 3
d) 1, 2 and 3

Q26. Consider the following statements regarding exempted supplies:

1. In such cases the whole supply chain is tax exempt.
2. Even if the inputs attract a tax, there is no bar in availing the input tax credit.
Which of the statements given above is/are correct?
a) Only 1
b) Only 2
c) Both
d) Neither
Q27. Which of the following is correctly matched:
1. Oxygen concentrators - 5% GST rate.
2. Covid Vaccines - 5% GST rate.
3. Black fungus medicine - 5% GST rate.
Choose the correct option:
a) Only 1
b) 1 and 2
c) 2 and 3
d) 1, 2 and 3

Q28. The term “Tax Inspectors without borders’ often appearing in news is related to:
1. Joint initiative of UNDP and OECD.
2. This will be helpful in strengthening the tax administration.
Choose the correct option:
a) Only 1
b) Only 2
c) Both
d) Neither

Q29. Consider the following regarding GST compensation:

1. This is being provided for a duration of five years i.e. from FY18 to FY22.
2. Levy of compensation cess has been extended for a period of five years.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false

Q30. Which of the following attract the GST compensation cess:

1. Cigarettes
2. Coal
3. Pan masala
4. Tobacco products
5. Aerated waters
Choose the correct option:
a) 1 and 2
b) 1, 2, 3 and 4
c) 1, 3, 4 and 5
d) 1, 2, 3, 4 and 5

Q31. Consider the following regarding e-invoicing:

1. The portal has been developed by C-DAC
2. It is compulsory for all the businesses with a sales of over ₹ 100 Cr.
Choose the correct option:
a) Only 1 is true
b) Only 2 is true
c) Both are true
d) Both are false