DO NOT OPEN THIS BOOKLET UNTIL YOU ARE ASKED TO DO SO

VAJIRAM & RAVI

Prelims Test Series - 2024
GS Test – 05 – Polity and Economics (IN5505)
(Time Allowed: 2 hours) (Maximum Marks: 200)

INSTRUCTIONS
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DO NOT OPEN THIS BOOKLET UNTIL YOU ARE ASKED TO DO SO

 VAJIRAM & RAVI
1. A government based on the ‘Rule of Law’ 4. The President of India can make regulations
means: for the peace, progress and good government
(a) all individuals, including government of which of the following Union Territories?
officials, are accountable under the law 1. Andaman and Nicobar Islands
2. National Capital Territory (NCT) of Delhi
(b) the law is supreme and no authority is
3. Lakshadweep
above it
4. Chandigarh
(c) a set of laws as defined by the majority of
Select the correct answer using the code
the population given below:
(d) equal application of law under all (a) 1 and 4 only
circumstances (b) 2 and 3 only
(c) 2 and 4 only
2. Consider the following statements with (d) 1 and 3 only
reference to the Fundamental Rights in India:
1. They are qualified but not absolute in 5. With reference to the Constitution of India,
nature. consider the following statements:
1. Acts included in the Ninth Schedule
2. They are guaranteed as well as protected
cannot be invalidated on the grounds of
by the Constitution.
contravention of any of the Fundamental
3. They act as limitations on actions of the
Rights.
Executive but not the Legislature. 2. A law that seeks to implement Article
How many of the above statements are 39(b) and (c) cannot be declared void for
correct? the violation of the Fundamental Rights
(a) Only one conferred by Article 14 or Article 19.
(b) Only two Which of the statements given above is/are
(c) All three not correct?
(d) None (a) 1 only
(b) 2 only
(c) Both 1 and 2
3. Consider the following functions:
(d) Neither 1 nor 2
1. Enforcement of Fundamental Rights
under Article 32 6. The 44th Constitutional Amendment Act of
2. Dispute between two or more States 1978 made changes to which of the following
3. Disputes regarding the election of the provisions of the Constitution of India?
President 1. Preamble
4. Inter-State water disputes 2. Fundamental Rights
How many of the above come under the 3. Directive Principles of State Policy
exclusive original jurisdiction of the Supreme 4. Fundamental Duties
Court? Select the correct answer using the code
given below:
(a) Only one
(a) 1 and 2 only
(b) Only two
(b) 2, 3 and 4 only
(c) Only three
(c) 2 and 3 only
(d) All four
(d) 1, 3 and 4 only
Vajiram & Ravi Prelims Test Series (2024) 1
GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
7. Consider the following rights: 10. Which of the following powers are exclusive
1. Right to information to the Parliament and are not available to the
2. Right to adequate means of livelihood for State Legislatures?
all citizens 1. Prescribing residence as the condition for
3. Right to public assistance in cases of
certain categories of employment under
unemployment
4. Right to work the State Government in a State
How many of the above are secured by the 2. Restricting the application of Fundamental
Directive Principles of State Policy of the Rights to State police forces
Constitution of India? 3. Prescribing punishment for the practice of
(a) Only one untouchability and forced labour
(b) Only two Select the correct answer using the code
(c) Only three given below:
(d) All four
(a) 1 and 2 only
(b) 2 and 3 only
8. As per the Constitution of India, which of the
following are the ‘Courts of Records’? (c) 1 and 3 only
1. Supreme Court (d) 1, 2 and 3
2. High Courts
3. District Courts 11. Consider the following:
4. Lok Adalats 1. Betting and gambling
Select the correct answer using the code 2. Space exploration
given below:
3. Cyber law
(a) 1 and 2 only
4. E-commerce
(b) 3 and 4 only
(c) 1, 2 and 3 only How many of the above matters fall under the
(d) 1, 2, 3 and 4 residuary powers of the Central Government?
(a) Only one
9. Consider the following statements with (b) Only two
reference to the legislative powers of the (c) Only three
Parliament: (d) All four
1. It has the powers to regulate the properties
of Indian citizens held in other countries.
12. With reference to the appellate jurisdiction
2. The criminal law and procedure fall under
the Union list of the Seventh Schedule of of the Supreme Court of India, consider the
the Indian Constitution. following statements:
3. A Constitutional Amendment with a special 1. A certification from a High Court is
majority with or without ratification by the required in Constitutional cases involving
States is required to transfer a subject a substantial question of law to file an
from one list to another in the Seventh appeal in the Supreme Court.
Schedule. 2. The Special Leave to Appeal provision
4. The power of Parliament to repeal an
under Article 136 of the Constitution
existing law is the same as enacting a law
under the Constitution. cannot be claimed as a matter of right.
How many of the above statements are Which of the statements given above is/are
correct? correct?
(a) Only one (a) 1 only
(b) Only two (b) 2 only
(c) Only three (c) Both 1 and 2
(d) All four (d) Neither 1 nor 2
Vajiram & Ravi Prelims Test Series (2024) 2
GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
13. Which one of the following best describes the 16. Which of the following recommendations
relationship between Rights and Duties?
(a) Duties are the result of entitlement of
rights
(b) Rights are correlatives of duties
(c) While duties are limited, rights are
absolute
(d) While a right is a liberty, duty is a
responsibility
14. Consider the following statements:
1. The Central Government can issue
directions to the State for the provision
of facilities for instruction in the mother
tongue in primary education.
2. The Central Government can delegate its
legislative powers to the States by passing
a special resolution in Parliament.
3. The President of India can entrust any
of the executive functions of the Central
Government to a State Government
without the consent of that State.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None
15. Consider the following statements with
reference to the taxation powers of States:
1. States are not permitted to impose taxes
on the consumption of electricity by
railways located within its boundaries.
2. States cannot impose any tax on water
stored for developing any inter-State river
or river valley.
3. The properties of the Central Government
are exempt from taxation by the States
and local bodies.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None
Vajiram & Ravi Prelims Test Series (2024)
GS Test No. – 05 - Polity and Economics (IN5505)
were made by the Punchhi Commission
report (2010) for Centre- State relations?
1. The Governor should be a person from
outside the State and not too intimately
connected with the local politics of the
State.
2. The Governor should be appointed for a
fixed tenure of five years and removed
from his position only through the process
of impeachment.
3. The Governor should always act on the
advice of the Council of Ministers in case
of the prosecution of a State Minister.
4. The convention of Governors acting as
Chancellors of Universities should be
done away with.
Select the correct answer using the code
given below:
(a) 1, 2 and 3 only
(b) 2, 3 and 4 only
(c) 1 and 4 only
(d) 1, 2 and 4 only
17. With reference to the office of the Governor,
consider the following statements:
1. S/he must be eligible to be elected to the
Lok Sabha.
2. The oath of office to her/him is administered
by the President of India.
3. S/he has no security of tenure.
4. During her/his term of office, s/he is
immune from both civil and criminal
proceedings.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) Only three
(d) All four
3
 VAJIRAM & RAVI
18. With reference to the State Legislative 21. With reference to changing the names of
Council, consider the following statements: districts in India, consider the following
1. A Parliamentary Act for the creation of a statements:
Council is not deemed as an Amendment 1. The approval of the State Cabinet is
under Article 368 of the Constitution of first required to change the name of any
India. district.
2. Its maximum strength is fixed at one-third 2. The proposal to change the name of the
of the total strength of the State Legislative district is sent by the Governor of the
Assembly. State to the Union Cabinet.
3. The final authority to decide upon
3. One third of its total members are
changing the name of the district is the
indirectly elected by the members of the
Union Cabinet.
State Legislative Assembly.
How many of the above statements are
How many of the above statements are
correct?
correct? (a) Only one
(a) Only one (b) Only two
(b) Only two (c) All three
(c) All three (d) None
(d) None
22. Consider the following statements with
19. The power to prosecute and punish a person reference to the Speaker of a State Legislative
for the same offence more than once violates Assembly:
which one of the following? 1. When the Speaker is presiding over the
(a) Article 14 House, s/he can only exercise a casting
(b) Article 20 vote in case of a tie.
(c) Article 21 2. The Speaker can vacate his/her office
(d) Article 22 anytime by addressing a resignation to
the Governor of the concerned State.
20. Consider the following statements with Which of the statements given above is/are
reference to the procedure for the transfer of correct?
High Court judges: (a) 1 only
(b) 2 only
1. Consent of the concerned Judge is not
(c) Both 1 and 2
required for her/his transfer from one High
(d) Neither 1 nor 2
Court to another.
2. The Chief Justice of India is required to
23. Consider the following statements with
consult the Chief Justice of the two High reference to the Supreme Court:
Courts, one from which the judge is being 1. Its power to issue writs originate from
transferred and the other receiving the Article 32 of the Constitution of India.
judge. 2. It can issue writs for the enforcement of
3. Once the President approves the transfer, both Fundamental and Constitutional
the Central Government has to issue the rights.
notification within 30 days to effect the 3. It cannot reject a writ petition under any
transfer. circumstances.
How many of the above statements are How many of the above statements are
correct? correct?
(a) Only one (a) Only one
(b) Only two (b) Only two
(c) All three (c) All three
(d) None (d) None

Vajiram & Ravi Prelims Test Series (2024) 4

GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
24. Consider the following statements with 27. India's stand that the ongoing Russia-
reference to curative and review petitions in Ukraine conflict should be resolved through
the Supreme Court: dialogue and diplomacy, fulfills which one of
1. They are provided under the Constitution its principles under the Constitution of India?
of India.
(a) Preamble
2. They both can be filed only for the violation
(b) Directive Principles of State Policy
of the principles of natural justice.
3. There is no time limit for their filing in the (c) Seventh Schedule
Supreme Court. (d) Fundamental Duties
How many of the above statements are
correct? 28. Which one of the following is correct with
(a) Only one reference to the "Right to freedom of religion"
(b) Only two enshrined in the Constitution of India?
(c) All three (a) A minor student can refuse to attend
(d) None
religious worship with the consent of his/
her guardian in an educational institution
25. Consider the following statements with
reference to Article 18 of the Indian recognised by the State.
Constitution: (b) A non-citizen is not entitled to profess,
1. It prohibits a citizen of India from accepting practice and propagate his/her religion.
any title from any foreign state. (c) It provides for non interference of the
2. A military or academic distinction does State in religious affairs.
not amount to ‘titles’ within the meaning (d) It prohibits the State to levy any fee for the
of Article 18. maintenance of a particular religion.
3. A foreigner holding an office of profit under
the State cannot accept any title from any
29. Consider the following statements with
foreign State without the consent of the
President of India. reference to the Directive Principles of State
Which of the statements given above are Policy (DPSPs):
correct? 1. They resemble the ‘Instrument of
(a) 1 and 2 only Instructions’ enumerated in the
(b) 2 and 3 only Government of India Act of 1935.
(c) 1 and 3 only 2. They are non-justiciable in nature.
(d) 1, 2 and 3 3. They can be used by the courts to examine
the constitutional validity of a law.
26. With reference to Article 15 of the Indian
How many of the above statements are
Constitution, consider the following
statements: correct?
1. It prohibits discrimination on grounds only (a) Only one
of religion, race, caste, sex and place of (b) Only two
birth. (c) All three
2. Its protection is not available against private (d) None
individuals under any circumstances.
3. It allows the State to make provisions for 30. Which one of the following Articles in the Indian
free education of children.
Constitution permits the State to impose
How many of the above statements are
compulsory service for public purposes?
correct?
(a) Only one (a) Article 16
(b) Only two (b) Article 19
(c) All three (c) Article 23
(d) None (d) Article 24

Vajiram & Ravi Prelims Test Series (2024) 5

GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
31. Consider the following laws: 34. Consider the following:
1. Prevention of Insults to National Honour
Act (1971)
2. Protection of Civil Rights Act (1955)
3. Income Tax Act (1961)
4. Wildlife (Protection) Act (1972)
How many of the above laws have been
enacted for the implementation of the
Fundamental Duties in India?
(a) Only one
(b) Only two
(c) Only three
(d) All four
32. Consider the following statements:
1. In Champakam Dorairajan case (1951), 35. With reference to the appointment of the
the Supreme Court accepted the
supremacy of the Fundamental Rights
(FRs) over the Directive Principles of
State Policy (DPSPs).
2. In Golaknath case (1967), the Supreme
Court upheld that the FRs can be amended
for the implementation of the DPSPs.
3. In Minerva Mills case (1980), the Supreme
Court held that the balance between the
DPSPs and FRs is an essential feature of
the basic structure of the Constitution.
Which of the statements given above are
correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
33. With reference to the contempt of court, 36. Consider the following statements:
consider the following statements:
1. A High Court has jurisdiction over
contempt of subordinate courts in the
State.
2. A Nyaya Panchayat can impose a penalty
for its contempt.
3. Contempt proceedings cannot be initiated
by any court after one year from the date
of alleged occurrence of the contempt.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None
Vajiram & Ravi Prelims Test Series (2024)
GS Test No. – 05 - Polity and Economics (IN5505)
1. Vesting of sovereign power in matters of
local importance with the States
2. Equal representation of the States in the
Rajya Sabha
3. Written Constitution
4. Appointment of All-India Service officers
in State Government cadres
How many of the above are the federal
features of the Indian Constitution?
(a) Only two
(b) Only three
(c) All four
(d) None
judges of the Supreme Court, consider the
following statements:
1. The recommendation by the Chief Justice
of India (CJI) in the matters of appointment
of the judges is binding on the President
of India and he cannot send it to CJI for
his reconsideration.
2. After receiving the final recommendation
from the Union Ministry of Law and
Justice, the Prime Minister advises the
President in the matter of appointment of
the judges.
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
When Legislatures of two or more States
pass a resolution requesting the Parliament
to enact a law on a matter in the State List,
then such a law enacted by the Parliament:
1. applies only to those States which have
passed the resolution
2. can be amended by the concerned
State Legislatures with the assent of the
President of India
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
6
 VAJIRAM & RAVI
37. Which one of the following has the power to 40. Consider the following statements:
enlarge the jurisdiction of the Supreme Court
of India?
(a) Parliament
(b) President
(c) Supreme Court Collegium
(d) Chief Justice of India
38. Consider the following:
1. Renaming the definition of ‘agricultural
income’ with reference to income tax
2. Imposition of surcharges on any existing
taxes of the Central Government
3. Creation of new State of the Indian Union
4. Addition of language in the Eighth
Schedule of the Indian Constitution
How many of the above Bills are introduced in
the Parliament only on the recommendation
of the President?
(a) Only one
(b) Only two
(c) Only three
(d) All four
39. Consider the following statements with
reference to the removal of a judge of the
Supreme Court from the office:
42. With reference to the designation of Senior
1. A removal motion can be introduced in
either House of the Parliament.
2. The presiding officer may refuse to admit
the removal motion.
3. Till now, the Parliament has never passed
a motion to remove a judge of the Supreme
Court.
Which of the statements given above are
correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Vajiram & Ravi Prelims Test Series (2024)
GS Test No. – 05 - Polity and Economics (IN5505)
In India, the power of judicial review can be
exercised in cases where:
1. the authority has no right to perform a
particular act
2. the power is used for the purpose for
which it is not alloted
3. the authority exercises decisions on
irrational considerations
4. the administrative authority follows unfair
procedure in its action
Which of the statements given above are
correct?
(a) 1, 2 and 3 only
(b) 2, 3 and 4 only
(c) 1 and 4 only
(d) 1, 2, 3 and 4
41. Consider the following:
1. Broadcasting fees
2. Disinvestments proceedings
3. Banking services
4. Public Health receipts
How many of the above come under the
sources of non-tax revenue for the Central
Government?
(a) Only two
(b) Only three
(c) All four
(d) None
Advocates by the Supreme Court of India,
consider the following statements:
1. There is no minimum age requirement to
be designated as a ‘Senior Advocate’.
2. A person to be designated as a Senior
Advocat should have ten years of practice
and service as a judicial officer.
3. The Committee for Designation of Senior
Advocates is headed by the Attorney
General of India.
Which of the statements given above is/are
correct?
(a) 1 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
7
 VAJIRAM & RAVI
43. Consider the following statements:
1. Unlike the President, a Governor cannot
return a Money Bill for the reconsideration
of the State Legislature.
2. The Governor of a State may reserve the
Money Bill for the consideration of the
President.
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
44. Consider the following statements:
Statement-I: Final judgements and orders
of criminal courts in a State are capable of
execution anywhere within India.
Statement-II: The Constitution of India
states that full faith and credit is to be given
throughout the territory of India to judicial
proceedings of every State.
Which one of the following is correct in respect
of the above statements?
(a) Both Statement-I and Statement – II are
correct and Statement- II is the correct
explanation for Statement- I
(b) Both Statement I and Statement II are
correct but Statement-II is not the correct
explanation for Statement-I
(c) Statement- I is correct but Statement-II is
incorrect
(d) Statement-I incorrect but Statement-II is
correct
Vajiram & Ravi Prelims Test Series (2024)
GS Test No. – 05 - Polity and Economics (IN5505)
45. The Seventh Schedule essentially highlights
which one of the following features of the
Constitution of India?
(a) Official languages
(b) Special provisions to States
(c) Division of powers
(d) Separation of powers
46. Consider the following statements with
reference to the High Courts in India:
1. The Constitution of India does not specify
the strength of a High Court and leaves it
to the discretion of the Parliament.
2. The Governor shall reserve a Bill passed by
the State Legislature for the consideration
of the President if it derogates the powers
of the High Court.
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
47. With reference to tribunal system in India,
consider the following statements:
1. The Income Tax Appellate Tribunal was
established in 1941 as the first Tribunal in
India.
2. Swaran Singh Committee recommended
that the decisions of the tribunals should
be subject to scrutiny by the High courts.
3. The appeals from Securities Appellate
Tribunal on a question of law lie directly
with the Supreme Court of India.
Which of the statements given above is/are
correct?
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 2 and 3 only
8
 VAJIRAM & RAVI
48. Which of the following provisions is/are
correct with reference to functioning of Lok
Adalats?
1. District Legal Services Authority is the
only body empowered to organize Lok
Adalats in India.
2. Lok Adalat cannot deal with the cases
pending before a court or the disputes
which are at pre-litigation stage.
3. The Lok Adalat possesses the same
powers as are vested in a Civil Court
under the Code of Civil Procedure.
4. The award made by a Lok Adalat is
binding on all the parties with no provision
to appeal in any court.
Select the correct answer using the code
given below:
(a) 1 only
(b) 2 and 3 only
(c) 3 and 4 only
(d) 1, 2 and 4 only
49. With reference to the State Council of
Ministers in India, consider the following
statements:
1. As per the Indian Constitution, there is no
minimum requirement for the number of
Ministers in the Council of Ministers of a
State.
2. It is a constitutional obligation for all the
States of India to have a tribal welfare
Minister in their Council of Ministers.
3. Any member of the State Legislature who
is disqualified on the ground of defection is
disqualified to be appointed as a Minister.
Which of the statements given above is/are
correct?
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 3 only
Vajiram & Ravi Prelims Test Series (2024)
GS Test No. – 05 - Polity and Economics (IN5505)
50. With reference to State Legislatures in India,
consider the following statements:
1. There is no provision of joint sitting in the
State Legislature to resolve a deadlock in
the passage of a bill.
2. There are no Department-Related
Standing Committees in States as there
are in Parliament.
3. There is no real power in the State
Legislative Council to reject a money bill.
Which of the statements given above is/are
correct?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
51. Which one of the following is correct with
reference to tax burden, when supply of the
goods is more elastic than its demand?
(a) Consumer of the goods bears majority of
tax burden
(b) Consumers and producers equally share
the tax burden
(c) Producers of the goods bear majority of
the tax burden
(d) Government bears the additional tax
burden to prevent increase in market
prices
52. Consider the following:
1. Depreciation of Indian Rupee
2. Capital outflow from India
3. Decrease in the rate of inflation
4. Increase in debt accumulation
How many of the above are the most likely
effects of an increase in the Current Account
Deficit (CAD) of India?
(a) Only one
(b) Only two
(c) Only three
(d) All four
9
 VAJIRAM & RAVI
53. According to the ‘Impossible Trinity’ theory, 56. With reference to the Commodity Transaction
which of the following is impossible to
maintain by an economy at the same time?
(a) Independent monetary policy, Fixed
exchange rate and Free flow of capital
(b) Flexible exchange rate, Fiscal discipline
and Free flow of capital
(c) Fiscal discipline, Income equality and
High growth rate
(d) Income equality, Independent monetary
policy and Free flow of capital
54. Consider the following statements with
reference to trade related rules of the World
Trade Organisation (WTO):
1. Direct income support to farmers is 57. In the context of Indian economy, ‘tax
considered permissible.
2. Government-provided agricultural
research or training is part of the amber
box subsidy.
3. Government buying agricultural crops at
market price support falls into non-trade-
distorting support.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None
55. With reference to Off-Budget Borrowings,
consider the following statements:
1. They are the loans taken indirectly by
the Central Government through public
institutions.
2. They are not included in the calculation of
the fiscal deficit in a given financial year.
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
Vajiram & Ravi Prelims Test Series (2024)
GS Test No. – 05 - Polity and Economics (IN5505)
Tax (CTT), consider the following statements:
1. It is applicable to both agricultural and
non-agricultural commodities.
2. Unlike Securities Transaction Tax (STT), it
is applicable only to sellers of commodity
derivatives.
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
expenditure’ refers to:
(a) spending of government tax revenue on
public welfare programs and infrastructure
projects
(b) expenditure incurred by the government
in tax collection
(c) expenditure incurred for the creation of
physical or financial assets
(d) revenue lost due to tax exemptions and
concessions provided to taxpayers
58. With reference to Global Depository Receipts
(GDRs), consider the following statements:
1. It is allocated to non-resident investors
against the issue of Foreign Currency
Convertible Bonds (FCCBs).
2. Only listed companies in India can issue
GDRs in overseas marketplaces.
3. Issuance of GDRs requires prior approval
from the Union Ministry of Finance.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None
10
 VAJIRAM & RAVI
59. Which one of the following statements best 62. Consider the following statements with
describes the term ‘anti-dumping duty’?
(a) It is a protectionist tariff that a domestic 1. It is tax payable by unlisted companies on
government imposes on foreign imports
when they are priced below fair market
value.
(b) It is a duty imposed by a country on
imported goods to counteract the negative
effects of subsidies provided by foreign
governments to their domestic industries.
(c) It is a tariff imposed by a country to
protect a domestic industry that would
face intense competitive pressure from
the import of a particular good.
(d) It is the duty that is levied by the
government on import and export of
goods to raise its revenues.
reference to the Angel Tax in India:
the issue of shares at a rate higher than
the fair market value.
2. It is a form of direct tax and levied under
the Income Tax Act, 1961.
3. It is applicable for investments received
from resident investors only.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None

63. With reference to trademarks, consider the

60. Arrange the following countries in descending
following statements:
order of their share in Foreign Direct
Investment in India in Financial Year 2022- 1. The process of trademarks registration in
23: India is followed in accordance with the
1. United States of America Patents Act, 1970.
2. Mauritius 2. Unlike the Geographical Indication
3. Netherlands (GI) tag, trademarks can be licensed to
4. Japan anyone, anywhere in the world.
5. Singapore 3. The decision of the registrar of trademarks
Select the correct answer using the code
is final and cannot be challenged.
given below:
Which of the statements given above is/are
(a) 3-1-2-5-4
correct?
(b) 1-3-4-5-2
(c) 4-1-3-2-5 (a) 1 only
(d) 2-5-1-3-4 (b) 2 only
(c) 2 and 3 only
61. Which one of the following will necessarily (d) 1 and 3 only
lead to the appreciation of the Indian Rupee?
(a) Increase in the flow of remittances from
India
(b) Increase in the investment by Indians in
London based properties
(c) Increase in the spending by Indian tourists
outside India
(d) Increase in the sale of Masala Bonds
outside India
Vajiram & Ravi Prelims Test Series (2024) 11
GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
64. Consider the following pairs with reference to 67. Consider the following statements with
imports of India in last five years: reference to the Harmonised Coding System:
Sl. Commodity Top Supplier to 1. It is developed by the World Trade
No. India Organisation for the harmonisation of
1. Rough : South Africa customs procedures.
Diamond
2. It is a 10 digit identification code with first
2. Active : United States of
Pharmaceutical America two digits denoting the product’s place of
Ingredients origin.
(API)
3. It is used by the countries to identify the
3. Finished Steel : South Korea
rate of tax applicable to a specific product.
4. Palm Oil : Vietnam
Which of the statements given above is/are
How many of the above pairs are correctly
correct?
matched?
(a) Only one pair (a) 1 only
(b) Only two pairs (b) 3 only
(c) Only three pairs (c) 2 and 3 only
(d) All four pairs (d) 1 and 3 only

65. Which one of the following statements best
describes the term ‘effective revenue deficit’?
(a) The difference between revenue deficit
and grants for the creation of capital
assets.
(b) The excess of total revenue expenditure
of the government over its total revenue
receipts.
(c) The gap between government’s
expenditure and revenue not taking into
account interest payments.
(d) The excess of the total government
expenditure over its total revenue
excluding borrowings.
66. Consider the following statements:
Statement-I: Fiscal drag acts as an automatic 69. Consider the following statements:
stabiliser in the economy.
Statement-II: Fiscal drag leads to decline
in aggregate demand when income of the
consumer increases.
Which one of the following is correct in respect
of the above statements?
(a) Both the Statement-I and Statement-II
are correct and Statement-II is the correct
explanation for statement I
(b) Both Statement-I and Statement-II are
correct but Statement-II is not the correct
explanation for Statement-I
(c) Statement-I is correct but Statement-II is
incorrect
(d) Statement-I is incorrect but Statement-II
is correct
Vajiram & Ravi Prelims Test Series (2024)
GS Test No. – 05 - Polity and Economics (IN5505)
68. Consider the following statements with
reference to the monetised deficit in India:
1. It results in the increase in net holdings
of treasury bills by the Reserve Bank of
India (RBI).
2. It can lead to increase in inflation and
decline in the value of Indian Rupee.
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
An imposition of progressive taxation will
likely result in:
1. increase in the tax liability of the consumer
with increase in income
2. lower tax collection than flat tax rates as
tax revenue varies with income
3. increase in government tax revenue
without any increase in taxes
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None
12
 VAJIRAM & RAVI
70. Consider the following statements with 73. Which of the following statements is correct
reference to Global Minimum Corporate Tax: with reference to the ‘currency swap’?
1. It is levied at a uniform rate of 15% on (a) It refers to the trading of goods and
foreign profits of multinational corporations services in mutually agreed third currency.
to reduce profit shifting and tax base (b) It is the use of third-party intermediaries
erosions. to circumvent restrictions in foreign
investments.
2. A country is free to fix corporate tax rates
(c) It is the act of buying shares of a
above the determined level.
multinational company in a local currency
3. It will not be levied on the income base
at mutually agreed prices.
of multinational corporations operating in (d) It is an exchange of a loan between two
India. parties in one currency for another at a
Which of the statements given above are specified date and exchange rate.
correct?
(a) 1 and 2 only 74. Consider the following statements with
(b) 2 and 3 only reference to the Special Rupee Vostro
(c) 1 and 3 only Account (SRVA):
(d) 1, 2 and 3 1. It is an account that domestic banks hold
for foreign banks in the former’s domestic
71. Consider the following statements: currency.
1. Member countries of the World Trade 2. An Indian branch of foreign bank is not
Organisation (WTO) are free to declare eligible to open SRVA in any foreign
country.
themselves as the ‘developing’ country.
3. Balance of one SRVA can be transferred
2. Developing country status at WTO
to the SRVA of another bank of the same
automatically gives benefits of the
country.
Generalised System of Preferences How many of the above statements are
(GSP) to members. correct?
Which of the statements given above is/are (a) Only one
correct? (b) Only two
(a) 1 only (c) All three
(b) 2 only (d) None
(c) Both 1 and 2
(d) Neither 1 nor 2 75. With reference to the external debt position of
India, consider the following statements:
72. Which of the following countries are members 1. Short-term debt with maturity of upto
of MERCOSUR trading bloc? one year constituted the majority of the
1. Argentina external debt.
2. External Commercial Borrowings alone
2. Brazil
accounted for almost 90% of the total
3. Colombia
external debt.
4. Venezuela
3. U.S. dollar denominated debt is the largest
5. Uruguay component of the total external debt.
Select the correct answer using the code How many of the above statements are
given below: correct?
(a) 1, 2 and 4 only (a) Only one
(b) 3 and 5 only (b) Only two
(c) 1, 2, 4 and 5 only (c) All three
(d) 2, 3 and 5 only (d) None

Vajiram & Ravi Prelims Test Series (2024) 13

GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
76. With reference to the exchange rate, consider 79. Which of the following is/are an example(s)
the following statements:
1. A fall in the value of the Nominal Effective
Exchange Rate (NEER) makes imports
more expensive.
2. The divergence in the values of the
NEER and Real Effective Exchange Rate
(REER) indicates high inflation rate in
India.
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
77. With reference to the ‘Equalisation Levy,’
consider the following statements:
1. It is a type of direct tax that is levied on the
amount paid to non-residents who own or
manage an e-commerce facility.
2. Online advertisements are covered under
the ambit of equalisation levy.
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
78. In the context of economy, a ‘Black Swan
event’ refers to a/an:
(a) manipulative scheme to boost the price of
a security through fake recommendations 81. Which one of the following transactions is
based on misleading statements
(b) highly improbable and unexpected
event that has a severe and widespread
economic impact
(c) illegal practice of trading that takes
place outside the purview of the stock
exchanges
(d) sudden spike in stock prices caused by
market manipulation and insider trading
of Overseas Direct Investment by an Indian
individual/company?
1. An Indian company engaged in the
smartphone manufacturing business sets
up an overseas company to expand its
operations
2. A citizen of India invests in an overseas
company engaged in the manufacturing
of shoes
3. An Indian company acquires the shares
of a foreign company through market
purchase
Select the correct answer using the code
given below:
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
80. In the context of international trade, which of
the following is the correct sequence of the
order of economic integration?
1. Free Trade
2. Common Market
3. Customs Union
4. Economic Union
Select the correct answer using the code
given below:
(a) 1-3-2-4
(b) 2-4-3-1
(c) 2-3-4-1
(d) 4-3-2-1
most likely to attract a ‘windfall tax’ in India?
(a) A sudden increase in revenue due to use
of digital marketing of products
(b) Purchase of large amount of assets for
business expansion
(c) An unanticipated rise in earnings due to
trade restrictions on competitors
(d) Acceptance of a large sale order for
capital goods by a firm

Vajiram & Ravi Prelims Test Series (2024) 14

GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
82. Consider the following:
1. Sale of shares of an Indian company to a
Chinese customer
2. Amount raised by Indian firm through
External Commercial Borrowings
3. Private remittances or transfers
How many of the above are included in the
capital account of the Balance of Payments
(BoP)?
(a) Only one
(b) Only two
(c) All three
(d) None
83. Consider the following statements:
1. Most consumer goods are procyclic in
nature as their value increases when the
economy is expanding.
2. The Countercyclical Capital Buffer
ensures decrease in credit supply by
banks during economic boom.
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. Which of the following statements is/are
correct with reference to India’s foreign trade?
1. China has been the top export destination
for India for the last 5 years.
2. Petroleum products were the most
exported commodity from India in 2022.
3. Software and business services together
constitute more than 50 percent of India’s
total services exports in 2022-23.
Select the correct answer using the code
given below:
(a) 1 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
85. RoDTEP scheme, recently seen in the news,
aims to:
(a) facilitate bank loans for setting up of
greenfield enterprises
(b) provide old age protection and social
security to unorganised workers
(c) facilitate improved access to financial
services to small and marginal farmers
(d) neutralise the taxes and duties on
exported goods
86. Which of the following are most likely the
impacts of tapering by the United States
Federal Reserve on the Indian economy?
1. Increase in the forex reserves of India
2. Decline in stock prices in India
3. Increase in investment by Foreign
Institutional Investors (FIIs) in India
Select the correct answer using the code
given below:
(a) 1 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
87. Consider the following statements:
1. Tax buoyancy indicates increase in tax
revenue without any increase in the tax
rate in the economy.
2. Tax elasticity measures the changes in
government's tax revenue with respect
to the changes in its Gross Domestic
Product (GDP).
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

Vajiram & Ravi Prelims Test Series (2024) 15

GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
88. Which of the following is/are the most likely 91. Consider the following statements with
impacts if the international trade settlement is reference to the Voluntary Retention Route:
conducted in Indian rupees?
1. Mitigation of currency volatility for Indian
businesses
2. Lower transaction costs in cross-border
trade
3. Reduction in holding of foreign reserves
by the Reserve Bank of India (RBI)
Select the correct answer using the code
given below:
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
89. Which one of the following statements is
correct with reference to the ‘anti-profiteering’?
(a) It is the practice of increasing profits
whereby traders manipulate prices of
goods in their account books.
(b) It is an illegal practice whereby a business
does not pass the benefits of the Goods
and Service Tax (GST) rate to the
consumer.
(c) It is the provisioning made by firms who
suppress profits by setting aside money
for unforeseeable expenses.
(d) It is the practice whereby firms reduce
93. Consider the following statements with
their actual profits by transferring assets
to subsidiary firms without accepting any
payment.
90. Consider the following statements with
reference to the tax multiplier:
1. The value of the tax multiplier is always
negative.
2. It is smaller in value compared to the
government spending multiplier.
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
1. It enables the Foreign Portfolio Investors
(FPIs) to invest in debt markets in India.
2. Any FPI registered with the Security
Exchange Board of India (SEBI) is eligible
to participate through this route.
3. The minimum retention period for
investment under this route is 3 years.
How many of the above statements are
correct?
(a) Only one
(b) Only two
(c) All three
(d) None
92. It is a form of tax evasion whereby capital of
India goes out to a tax haven country to be
invested in shell companies. The money is
then reinvested in the form of Foreign Direct
Investment (FDI) in India.
This is the most likely description of:
(a) Round Tripping
(b) Treaty Shopping
(c) Transfer Mispricing
(d) Base Erosion and Profit Shifting
reference to the Foreign Reserves in India:
1. The Foreign Currency Assets (FCA)
includes investments in US Treasury
bonds and deposits with foreign Central
Banks.
2. The Reserve Tranche Position with the
International Monetary Fund (IMF) must
include 25% of the total quota in the form
of foreign currency or gold.
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

Vajiram & Ravi Prelims Test Series (2024) 16

GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
94. Consider the following statements with 97. Consider the following pairs:
reference to the composition levy in India: Sl. Report Released by
1. It allows small taxpayers, with annual No.
turnover less than Rs 50 lakh, to pay 1. Global : World Economic
Economic Forum (WEF)
taxes every quarter. Prospect (GEP)
Report
2. It cannot be opted by non-resident
2. Global Risk : World Bank
taxpayers. Report
Which of the statements given above is/are 3. World : United Nations
Investment Conference
correct? Report on Trade and
(a) 1 only Development
(UNCTAD)
(b) 2 only
(c) Both 1 and 2 How many of the above pairs are correctly
(d) Neither 1 nor 2 matched?
(a) Only one pair
95. With reference to the Indian economy, ‘input (b) Only two pairs
tax credit’ refers to: (c) All three pairs
(a) tax exemptions granted by government to (d) None
small enterprises on purchase of inputs
for first five years or till it makes profit, 98. With reference to ‘Social Bonds’, consider the
whichever is earlier
following statements:
(b) tax paid by the seller/manufacturer when
1. They can only be issued by sovereign
importing raw-materials and inputs
governments to maximise their
(c) tax paid by the seller on the purchase of
investments in green projects.
goods, that can be used to reduce the tax
2. They carry zero default risk in comparison
liability at the time of sale
(d) a mechanism whereby businesses pass to corporate bonds.
on the burden of increase in tax on the Which of the statements given above is/are
consumers by increasing prices correct?
(a) 1 only
96. Which one of the following statements is (b) 2 only
correct with reference to the 'Dutch Disease'? (c) Both 1 and 2
(a) It refers to a severe recession that results (d) Neither 1 nor 2
from a sudden collapse of the banking
system
(b) It is an significant appreciation of the
national currency due to resource exports
(c) It is the economic loss borne by
individuals not directly involved in the
market transactions that creates negative
externality.
(d) It is an uneven growth across sectors due
to the discovery of natural resources

Vajiram & Ravi Prelims Test Series (2024) 17

GS Test No. – 05 - Polity and Economics (IN5505)
 VAJIRAM & RAVI
99. Consider the following pairs:

Sl. Type of Description

No. Currency
1. Hot currency : Currency that
quickly moves
between financial
markets of different
countries
2. Heated : Currency whose
currency value has
appreciated by
large margin in
short period
3. Dear currency : Currency that
is obtained at
abnormally high
interest rates

How many of the above pairs are correctly

matched?
(a) Only one pair
(b) Only two pairs
(c) All three pairs
(d) None

100. Which one of the following statements best

describes the practice of ‘friendshoring’?
(a) It is a practice of relocating business
operations to a neighbouring country with
a shared border.
(b) It occurs when a business transfers its
operations from a foreign country to its
home country.
(c) It involves rerouting of supply chains
to economically safe countries to avoid
disruption to the flow of business.
(d) It is an agreement between two countries
to give preferential right of entry to certain
products facilitated by reducing duties.

Vajiram & Ravi Prelims Test Series (2024) 18

GS Test No. – 05 - Polity and Economics (IN5505)