UPSC Prelims Test Series 2019 - Test 10(Economic And Social Development-2)

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  • 1/100 Questions

    Consider the following statements 1. In a primary market, the instruments of security are procured between the capital-raiser and the instrument purchaser 2. In a secondary market, the participants are primary instrument holders Select the correct code from the following

    • 1 is correct
    • 2 is correct
    • 1 and 2 are correct
    • 1 and 2 are incorrect
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UPSC Prelims Test Series 2019 - Test 10(Economic And Social Development-2) - Quiz

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  • 2. 

    JIMEX is a bilateral maritime exercise between India and which of the following countries?

    • Japan

    • Germany

    • Jordan

    • None of the above

    Correct Answer
    A. Japan
    Explanation
    JIMEX-18: It is a bilateral maritime exercise between India and Japan held at Visakhapatnam. It was conducted after five years. It will comprise of harbour phase (professional and social interactions between the crews of ships) and a sea phase (warfare exercises) of four days each.

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  • 3. 

    What is meant by the term Informalization of Workers in India?

    • Disappearance of jobs in traditional sectors

    • Lack of quality certified jobs abroad

    • Increase of service sector jobs

    • Contractualization of workforce and employment in informal sector.

    Correct Answer
    A. Contractualization of workforce and employment in informal sector.
  • 4. 

    Consider the following functions 1. Formulation of Foreign Direct Investment (FDI) Policy and promotion. 2. Formulation of policies relating to Intellectual Property Rights in the fields of Patents, Trademarks, Industrial Designs and Geographical Indications of Goods and administration of regulations, rules made there under. The functions above mentioned are exercised by which of the following agency in India now?

    • Reserve Bank of India

    • Department for Promotion of Industry and Internal Trade(DPIIT)

    • NITI Aayog

    • None

    Correct Answer
    A. Department for Promotion of Industry and Internal Trade(DPIIT)
    Explanation
    The role and functions of the Department of Industrial Policy and Promotion (DIPP) primarily include:
    ● Formulation and implementation of industrial policy and strategies for industrial development in conformity with the development needs and national objectives;
    ● Monitoring the industrial growth, in general, and performance of industries specifically assigned to it, in particular, including advice on all industrial and technical matters;
    ● Formulation of Foreign Direct Investment (FDI) Policy and promotion, approval and facilitation of FDI;
    ● Encouragement to foreign technology collaborations at enterprise level and formulating policy parameters for the same;
    ● Formulation of policies relating to Intellectual Property Rights in the fields of Patents, Trademarks, Industrial Designs and Geographical Indications of Goods and administration of regulations, rules made there under;
    ● Administration of Industries (Development & Regulation) Act, 1951
    DIPP has been changed as Department for Promotion of Industry and Internal Trade(DPIIT) on 27th January 2019.

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  • 5. 

    SA-21 Growler seen in news is related to:

    • Missile system

    • A chronic disease

    • Pest found in crops

    • None of the above

    Correct Answer
    A. Missile system
    Explanation
    S-400 - The Russian-built S-400 Triumf — identified by NATO as the SA-21 Growler — is the world’s most dangerous operationally deployed modern long-range surface-to-air missile system. It is considered much more effective than the Terminal High Altitude Area Defense system developed by the US.

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  • 6. 

    India can realise the potential of its demographic dividend by :

    • Skill development.

    • Rolling out Minimum income guarantee scheme.

    • Increasing health expenditure.

    • None of the above.

    Correct Answer
    A. Skill development.
  • 7. 

    Consider the following statements with reference to Fiscal Consolidation. 1. Fiscal consolidation is a policy aimed at reducing government deficits and 2. Fiscal consolidation is a policy aimed at reducing government’s debt accumulation. Which of the above statements is/are correct?

    • 1 Only

    • 2 Only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. Both 1 and 2
    Explanation
    Fiscal Consolidation refers to the policies undertaken by Governments (national and sub-national levels) to reduce their deficits and accumulation of debt stock. In order to run the country effectively, the government has to use the Finances at its disposal with due diligence, over dependence on either debt will lead to debt trap which will scare away the investors and will harm the country’s reputation. The government must be able to generate sufficient revenue to run the economy without having to resort to loans.

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  • 8. 

    Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle’ is released by?

    • United Nations

    • International Monetary Fund

    • World Bank

    • None of the above

    Correct Answer
    A. World Bank
  • 9. 

    Identify the correct statements from the following. 1. Bepi Colombo Mission is a mission to Planet Mercury. 2. It is a joint mission between ESA and the Japan Aerospace Exploration Agency (JAXA). Options:

    • 1 only

    • 2 only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. Both 1 and 2
  • 10. 

    Which of the following will improve Ease of doing business rankings for India? 1. Implementation of Insolvency and Bankruptcy code. 2. GST implementation. Select the correct answer using the codes given below.

    • 1 Only

    • 2 Only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. Both 1 and 2
  • 11. 

    Asian premium seen in news is related to:

    • Asian development bank.

    • BRICS Contingent Reserve Arrangement (CRA)

    • Organisation of the Petroleum Exporting Countries (OPEC).

    • None

    Correct Answer
    A. Organisation of the Petroleum Exporting Countries (OPEC).
    Explanation
    Asian Premium is extra charge being collected by OPEC countries from Asian countries when selling oil in comparison to western countries.

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  • 12. 

    Which of the following is correct about Global Depository Receipts? 1. It is an instrument to raise money from abroad. 2. These receipts are in the form of foreign currency. Select the correct statements using the codes given below:

    • 1 Only

    • 2 Only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. Both 1 and 2
    Explanation
    A global depositary receipt or GDR is a bank certificate issued in more than one country for shares in a foreign company.It is a type of bank certificate that represents shares in a foreign company, such that a foreign branch of an international bank then holds the shares. The shares themselves trade as domestic shares, but globally, various bank branches offer the shares for sale. Private markets use GDRs to raise capital denominated in either U.S. dollars or euros. When private markets attempt to obtain euros instead of U.S. dollars we call GDRs EDRs.
    Investors trade GDRs in multiple markets, which they generally refer to as capital markets as they are considered to be negotiable certificates. Investors use capital markets to facilitate the trade of long-term debt instruments, and for the purpose of generating capital. GDR transactions in the international market tend to have lower associated costs than some other mechanisms that investors use to trade in foreign securities.

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  • 13. 

    With reference to negotiable warehousing receipts, consider the following statements: 1. Warehouse receipts were made negotiable under the Warehouse (Development and Regulation) Act, 2007. 2. The receipts allow for the transfer of ownership of a commodity stored in a warehouse without having to physically deliver the commodity. 3. These receipts can be used as collateral for loans. Which of the statements given above is/are correct?

    • 1 is correct

    • 1 and 2 are correct

    • 2 and 3 are correct

    • 1, 2, and 3 are correct

    Correct Answer
    A. 1, 2, and 3 are correct
    Explanation
    • Negotiable' refers to the fact that the receipt in question can be transferred or assigned to another party. Non-negotiable describes one that is firmly established and cannot be adjusted or amended.
    • Warehouse receipts are made negotiable under the Warehouse (Development and Regulation) Act, 2007, and regulated by the Warehousing Development and Regulatory Authority (WDRA).

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  • 14. 

    Identify the correct statements from the following. 1. Indian Institute of Toxicology Research is located in Lucknow. 2. Recently, it has developed an innovative technology for “Drinking Water Disinfection System”. Options:

    • 1 Only

    • 2 Only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. Both 1 and 2
    Explanation
    Council of Scientific and Industrial Research, Indian Institute of Toxicology Research (CSIR-IITR), Lucknow has developed an innovative technology for “Drinking Water Disinfection System” with Trade name “Oneer”.

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  • 15. 

    Ashok Dalwai Committee seen in news is related to:

    • Capital Markets

    • Banking Sector

    • Digital payments

    • Agriculture

    Correct Answer
    A. Agriculture
    Explanation
    Ashok Dalwai committee is a committee on doubling farmers income.

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  • 16. 

    Following are the statement regarding Inflation. 1. Wholesale Price Index (WPI) includes services. 2. WPI accounts for changes in general price level of goods at wholesale level. 3. WPI is the primary measure that is used by the Indian central government for ascertaining inflation Identify the correct statements:

    • 1 & 2 Only

    • 2 & 3 Only

    • 1 & 3 Only

    • 1, 2 & 3

    Correct Answer
    A. 2 & 3 Only
    Explanation
    The wholesale price index (WPI) does not includes the cost of services. Further, as WPI accounts for changes in general price level of goods at wholesale level, it fails to communicate actual burden borne by the end consumer. WPI is the primary measure that is used by the Indian central government for ascertaining inflation as WPI in contrast to CPI accounts for changes in price at an early distribution stage.

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  • 17. 

    Longitude 82°30′E passes through which of the following states in India: 1. Uttarakhand 2. Uttar Pradesh 3. Madhya Pradesh 4. Chhattisgarh 5. Odisha 6. Tamil Nadu

    • 1,2,3,4,5,6 Only

    • 2,3,4,5,6 Only

    • 2,3,4,5 Only

    • 1,2,6 Only

    Correct Answer
    A. 2,3,4,5 Only
    Explanation
    India observes a single time zone based on the longitude passing through 82°30′E. This longitude passes through Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Odisha and Andhra Pradesh.

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  • 18. 

    Which of the following sectors have been conferred with the status of Priority Sector in order to ensure adequate institutional credit? 1. Renewable Energy 2. Export Credit 3. Social Infrastructure 4. Micro, Small and Medium Enterprises Select the correct answer using the codes given below.

    • 2 and 4 only

    • 1, 2 and 3 only

    • 2, 3 and 4 only

    • 1,2,3,4

    Correct Answer
    A. 1,2,3,4
    Explanation
    Priority Sector includes the following categories:
    (i) Agriculture
    (ii) Micro, Small and Medium Enterprises
    (iii) Export Credit
    (iv) Education
    (v) Housing
    (vi) Social Infrastructure
    (vii) Renewable Energy
    (viii) Others

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  • 19. 

    “X is usually an HNI (high net worth individual) who provides financial backing for startups and entrepreneurs. Usually, X seeks to invest in the early stages of startups. Which of the following term is used for X?

    • Venture Capitalists

    • Angel Investors

    • Crowd Funding Influencers.

    • None of the above

    Correct Answer
    A. Angel Investors
    Explanation
    • Angel investors provide more favorable terms compared to other lenders since they usually invest in the entrepreneur starting the business rather than the viability of the business.
    • Angel investors are focused on helping startups take their first steps, rather than the possible profit they may get from the business. Essentially, angel investors are the opposite of venture capitalists.

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  • 20. 

    Which one of the following groups of items is included in India’s foreign exchange reserves?

    • Foreign currency assets, gold holdings of the RBI and loans from the World Bank.

    • Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries.

    • Foreign-currency assets, loans from the World Bank and SDRs.

    • Foreign-currency assets, gold holdings of the RBI and SDRs.

    Correct Answer
    A. Foreign-currency assets, gold holdings of the RBI and SDRs.
    Explanation
    Forex reserves are foreign currency assets held by the central banks of countries.
    These assets include foreign marketable securities, monetary gold, special drawing rights (SDRs) and reserve position in the IMF. The main purpose of holding foreign exchange reserves is to make international payments and hedge against exchange rate risks.

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  • 21. 

    Which of the following is the reason for jobless growth in India?

    • Reforms were mainly confined to the formal sector.

    • People were not willing to do jobs.

    • The informal sector opposed the reforms and new industries could not be opened

    • None of the above.

    Correct Answer
    A. Reforms were mainly confined to the formal sector.
    Explanation
    In India, growth is attributed to service sector, whereby both employment and wages have seen a rise. But as figures say, the biggest employing sector in India is the Agriculture sector, employing 45% of the population but contributing 15% to the GDP, whereas Service sector is the biggest contributor to the GDP but employs less than 30%. IT and Financial services are drivers of service sector growth in last 2 decades however both of these sectors are not employment intensive. Thus contributing to jobless growth in India.

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  • 22. 

    Consider the following statements regarding Insolvency and Bankruptcy Code (IBC). 1. The Debt Recovery Tribunal act as adjudicating authorities for individuals and unlimited partnership firms under IBC, and National Company Law Tribunal would deal with companies and limited liability entities. 2. Insolvency and Bankruptcy Board of India will be the overall regulator for insolvency in India. Which of the statements given above is/are correct?

    • 1 Only

    • 2 Only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. Both 1 and 2
    Explanation
    Debt Recovery Tribunal and National Company Law Tribunal to act as Adjudicating Authority and deal with the cases related to insolvency, liquidation and bankruptcy process in respect of individuals and unlimited partnership firms and in respect of companies and limited liabilities entities respectively.
    Establishment of an Insolvency and Bankruptcy Board of India to exercise regulatory oversight over insolvency professionals, insolvency professional agencies and information utilities.

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  • 23. 

    Money market where debt and stocks are traded and the maturity period is more than a year is classified as

    • Shorter-term markets

    • Capital markets

    • Counter markets

    • Long-term markets

    Correct Answer
    A. Capital markets
  • 24. 

    Consider the following statements regarding Public Finance Management System (PFMS): 1. It will help to borrow loans from foreign countries on behalf of the Union Government 2. It will help to monitor the flow of funds to beneficiaries of different government welfare schemes. Which of the statements given above is/are correct?

    • 1 Only

    • 2 Only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. 2 Only
    Explanation
    Public Finance Management System (PFMS) will help monitor the flow of funds to beneficiaries of different government welfare schemes. With the capability of providing real time information, the web-based software app PFMS has tremendous potential to improve programme/financial management, reduce the float in the financial systems by enabling "just in time" releases and also the government borrowings with direct impact on interest cost.

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  • 25. 

    Logistics performance index is released by:

    • World Trade Organisation.

    • United Nations Conference on Trade and Development.

    • World Bank

    • World Economic Forum.

    Correct Answer
    A. World Bank
  • 26. 

    If there is Current Account Deficit (CAD) and fiscal deficit in an economy, then ideally

    • Investment in the economy should be equal to domestic savings.

    • Savings will naturally be much greater than investment in the economy.

    • Savings will be lesser than gross investment in the economy.

    • Investment will be equal to the total amount of capital goods and infrastructure created in the economy.

    Correct Answer
    A. Savings will be lesser than gross investment in the economy.
    Explanation
    A current account deficit occurs when more money is being paid out than brought into a country. As a result saving will be lesser.

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  • 27. 

    Consider the following statements regarding Sovereign Gold Bond ( SGB) scheme 1. The limit for individuals has been recently increased to 5 kilograms. 2. The SGBs are issued by RBI on behalf of Government of India. 3. SGBs are not exempt under capital gains tax 4. Investments in such bonds by banks will be counted in the calculation of Statutory Liquidity Ratio. Which of the following statements given above is/are correct?

    • 1 and 4

    • 2 and 4

    • 1,2 and 3

    • All the above

    Correct Answer
    A. 2 and 4
    Explanation
    • The Government announced a few changes in its Sovereign Gold Bond (SGB) Scheme recently.
    • It increased the limit from 0.5 kgs to 4 kgs for individuals and for trusts and HUF to 20 kgs. Thus, Statement 1 is wrong.
    • Statement 2 is correct as RBI issues SGB on behalf of GoI.
    • Statement 3 is incorrect as SGB are exempt under CGT on redemption. In this sense, they are different from Gold ETF.
    • Statement 4 is correct as the investment will be considered in the calculation of SLR.

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  • 28. 

    Which among the following are the transactions under the current account of Balance of Payments (BoP)? 1. Goods 2. Services 3. Assets Select the correct answer using the codes given below.

    • 1,2 and 3

    • 1 only

    • 3 only

    • 1 and 2 only

    Correct Answer
    A. 1 and 2 only
    Explanation
    The Balance of Payments record the transaction in goods, services and assets between the residents of the country and the rest of the world. The BoP has two components-- the current account and the capital account.
    The current account records transactions in the goods and services and transfer payments. Trade in services is recorded as invisible trade and includes both factor income components and non-factor income components. Trade in goods is recorded as the balance of the exports and imports that is the trade balance. Transfer payments are receipts which the residents of the country receive for free in the form of remittances, gifts and grants. The capital account records the sale and purchase of assets.

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  • 29. 

    Which of the following policies aims to reduce the Current Account Deficit (CAD)? 1. Reducing import duties 2. Currency devaluation 3. Providing export subsidies 4. Tightening of fiscal and monetary policy Select the correct answer using the codes given below.

    • 1 and 4 only

    • 2 and 3 only

    • 1, 2 and 3 only

    • 1, 2, 3 and 4

    Correct Answer
    A. 2 and 3 only
    Explanation
    Reducing import duties will facilitate more imports widening the Current Account Deficit. Hence, policy (1) will not be able to address concerns of current account deficit. A current account surplus indicates that the value of a country's net foreign assets (i.e. assets less liabilities) grew over the period in question, and a current account deficit indicates that it shrank. Both government and private payments are included in the calculation. It is called the current account because goods and services are generally consumed in the current period.

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  • 30. 

    Which of the following is/are measures to address the deficit in Balance of Trade (BoT) of India? 1. Licensing imports 2. Income Tax concessions given to exporters 3. Setting up of export processing zones 4. Devaluation of rupee Select the correct answer using the code given below.

    • 1, 3 and 4 only

    • 3 and 4 only

    • 1 and 2 only

    • 1, 2, 3 and 4

    Correct Answer
    A. 1, 2, 3 and 4
    Explanation
    All are among the measures suggested to address the deficit in Balance of Trade (BoT) of India.

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  • 31. 

    Which of the following are instruments of the money market? 1. Call Money 2. Notice Money 3. Bills Rediscounting Select the correct answer

    • 1 only

    • 1 and 2 only

    • 2 and 3 only

    • 1, 2 and 3 are correct.

    Correct Answer
    A. 1, 2 and 3 are correct.
    Explanation
    • Money market instruments are usually below one year.
    • Call money, notice money, Certificate deposits, Commercial Papers, Interest rate swaps etc., are part of money market instruments.

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  • 32. 

    When a government spends more than it collects by way of revenue, it incurs a budget deficit. Consider the following statements in this regard: 1. A fiscal deficit occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings. 2. The Revenue deficit refers to the financial position wherein the government’s revenue expenditure exceeds its total revenue receipts. 3. Primary deficit refers to difference between fiscal deficit of the current year and interest payments on the previous borrowings. Which of the statement is/are correct?

    • 1 and 2 only

    • 1 and 3 only

    • 2 and 3 only

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Self Explanatory.

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  • 33. 

    Which among the following statement is true?

    • The Financial Action Task Force(FATF) is an initiative of the G-20 established in 2008.

    • The FATF Headquarters is located in Vienna, Austria.

    • The FATF maintains two different lists of countries called Grey and Blacklists.

    • None of the above.

    Correct Answer
    A. The FATF maintains two different lists of countries called Grey and Blacklists.
    Explanation
    • The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 on the initiative of the G7. The FATF Secretariat is housed at the OECD headquarters in Paris.
    • FATF maintains two different lists of countries: those that have deficiencies in their AML/CTF regimes, but they commit to an action plan to address these loopholes and those that do not end up doing enough. The former is commonly known as grey list and latter as the blacklist.

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  • 34. 

    Which of the following are Non- tariff barrier(s)? 1. Quotas 2. Embargoes 3. Sanctions 4. Levies Select the correct answer using the code given below.

    • 1 and 2 only

    • 3 only

    • 1 and 3 only

    • 1, 2, 3 and 4

    Correct Answer
    A. 1, 2, 3 and 4
    Explanation
    A nontariff barrier is a way to restrict trade using trade barriers in a form other than a tariff. Nontariff barriers include quotas, embargoes, sanctions, and levies. As part of their political or economic strategy, large developed countries frequently use nontariff barriers to control the amount of trade they conduct with other countries.

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  • 35. 

    Living Planet Report, 2018 is released by?

    • IUCN

    • WWF

    • UNFCCC

    • None of the above.

    Correct Answer
    A. WWF
  • 36. 

    The price of any currency in international market is decided by: 1. Demand for goods/services provided by the country concerned. 2. Stability of the government of the concerned country. 3. World Bank 4. Economic potential of the country in question. Select the correct answer using the codes given below:

    • 1, 2 and 3 only

    • 3 and 4 only

    • 1 and 2 only

    • 1, 2, 3 and 4

    Correct Answer
    A. 1 and 2 only
    Explanation
    World Bank provides financial help for development projects. It has nothing to do with the price of any currency. Economic potential of the country in question is a long-term factor that may affect the flow of capital but it will not affect price of the currency which is a short-term Phenomenon.

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  • 37. 

    Which of the following is a correct statement regarding Serious Fraud Investigation Office?

    • It is a body under the jurisdiction of Department of Economic affairs

    • It is a body under the jurisdiction of Department of Revenue

    • It is a body under the jurisdiction of Ministry of Commerce

    • It is a body under the jurisdiction of Ministry of Corporate affairs

    Correct Answer
    A. It is a body under the jurisdiction of Ministry of Corporate affairs
    Explanation
    The SFIO is a fraud investigating agency in India, under the jurisdiction of the Ministry of Corporate Affairs. The SFIO is involved in major fraud probes and is the coordinating agency with the Income Tax Department and the Central Bureau of Investigation (CBI). It is headquartered in New Delhi.

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  • 38. 

    With reference to the affairs of World Trade Organization, the Most Favoured Nation (MFN) status implies: 1. Granting a higher status to one country with respect to the other trading partners. 2. Lowering the custom duties for that country as a special privilege. 3. Non-discriminatory treatment by one country towards the other country with regard to trade in goods and services. Select the correct answer using the codes given below.

    • 1 only

    • 2 and 3 only

    • 3 only

    • 1, 2 and 3

    Correct Answer
    A. 3 only
    Explanation
    Most favoured nation: The term means the country which is the recipient of this treatment must, normally, receive equal advantages as the ‘most favoured nation’ by the country granting such treatment. In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.

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  • 39. 

    A situation where high inflation and high unemployment co-exist is called as

    • Recession

    • Stagflation

    • Depression

    • Hyperinflation

    Correct Answer
    A. Stagflation
    Explanation
    A stagflation is a situation where high inflation and high unemployment rates co-exist. This is contrary to the Phillips law which says that higher inflation will lead to low unemployment rates.

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  • 40. 

    Financial Stability Report is released by:

    • Financial Stability Board.

    • International Monetary Fund.

    • World Bank

    • Reserve Bank of India.

    Correct Answer
    A. Reserve Bank of India.
  • 41. 

    Which of the following are incorrect regarding the Indian National Army (INA)?

    • INA had a women’s regiment.

    • The idea of INA was first conceived by Subhash Chandra Bose.

    • Jawaharlal Nehru, defended the INA soldiers during the INA trials.

    • Historians termed INA unrest as "the last nail in the coffin" of the British Empire.

    Correct Answer
    A. The idea of INA was first conceived by Subhash Chandra Bose.
    Explanation
    The idea of INA was first conceived in Malaya by Mohan Singh.

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  • 42. 

    Which of the following is the characteristic of ‘Round Tripping’?

    • It is an arrangement where a property is transferred to a person located overseas without compliance with tax regime.

    • It is a practice whereby a company deliberately incorporates a business unit in a tax haven to reinvest in the parent country.

    • When a property which has purchased in the name of some person other than the person who has financed it and subsequently transfer to a third person.

    • None of the above.

    Correct Answer
    A. It is a practice whereby a company deliberately incorporates a business unit in a tax haven to reinvest in the parent country.
    Explanation
    • The term ‘round-tripping’ is self-explanatory. It denotes a trip where a person or thing returns to the place from where the journey began. In the context of black money, it leaves the country through various channels such as inflated invoices, payments to shell companies overseas, the hawala route and so on. This money returns in a freshly laundered form; thus completing a round-trip.
    • Those indulging in this make the money flow through multiple layers consisting of many entities and companies. How does the money return to India? It could be invested in offshore funds that in turn invest in Indian assets. The Global Depository Receipts (GDR) and Participatory Notes (P-Notes) are some of the other routes that have been used in the past.

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  • 43. 

    Which of the following can be beneficial to the problems faced by the Indian farmer?

    • Trading in cryptocurrencies

    • Utilizing commodity futures

    • Banks moving to credit default swaps

    • None of the above

    Correct Answer
    A. Utilizing commodity futures
    Explanation
    • Commodity futures serve a great purpose in any economy. In agriculture one of the main risks is the large degree of fluctuation in prices.
    • By using Commodity futures, the price fluctuation can be decreased and the farmers and other players would be able to decrease their risk and hedge against vagaries of the market.

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  • 44. 

    With reference to the recent panel setup by RBI on the economic capital framework, consider the following statements 1. The panel is to be headed by Parthasarathi Shome 2. The panel would look into the RBI reserves i.e., whether RBI is holding reserves in surplus of required levels. Which of the following statements given above is/are correct?

    • 1 only

    • 2 only

    • Both 1 and 2

    • Neither 1 nor 2

    Correct Answer
    A. 2 only
    Explanation
    • The panel will be headed by former RBI governor, Bimal Jalan and not Shome. So statement 1 is wrong.
    • Terms of Reference of the Panel
    • The panel will decide whether RBI is holding provisions, reserves, and buffers in the surplus of the required levels.
    • It would propose a suitable profits distribution policy taking into account all the likely situations of the RBI, including the situations of holding more provisions than required and the RBI holding fewer provisions than required.
    • The ECF committee will also suggest an adequate level of risk provisioning that the RBI needs to maintain. That apart, any other related matter, including treatment of surplus reserves created out of realized gains, will also come within the ambit of this committee.

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  • 45. 

    Identify the correct statements from the following 1. India’s first international exchange India INX is located in International Financial Services Centre in Bengaluru , Karnataka. 2. The Cabinet has recently approved the establishment of a Unified Authority for regulating all financial services in IFSCs through International Financial Services Centres Authority Bill, 2019. Select the correct code from the following

    • 1 is correct

    • 2 is correct

    • 1 and 2 are correct

    • 1 and 2 are incorrect

    Correct Answer
    A. 2 is correct
    Explanation
    • India’s first International exchange is located in GIFT Gandhinagar Gujarat, not in Bengaluru.
    • The Union Cabinet has approved the establishment of a unified authority for regulating all financial services in International Financial Services Centres (IFSCs) in India through International Financial Services Centres Authority Bill, 2019.

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  • 46. 

    Which of the following is/are instruments in secondary capital market? 1. Bonds 2. Debentures 3. Initial Public Offering Select the correct answer using the code given below

    • 1 only

    • 1 and 2 only

    • 2 and 3 only

    • 1, 2, and 3.

    Correct Answer
    A. 1 and 2 only
    Explanation
    • Secondary Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange.
    • Majority of the trading is done in the secondary market.
    • Secondary market comprises of equity and debt markets.
    • IPO on the other hand is an offering of the primary market where a private company decides to sell stocks to the public for the first time.

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  • 47. 

    Which of the following constitute Capital Account? (2013) 1. Foreign Loans 2. Foreign Direct Investment 3. Private Remittances 4. Portfolio Investment Select the correct answer using the codes given below.

    • 1, 2 and 3

    • 1, 2 and 4

    • 2, 3 and 4

    • 1, 3 and 4

    Correct Answer
    A. 1, 2 and 4
    Explanation
    • Private remittances are a part of current account.
    • Foreign Loans, FDI , FII , FPI are part of capital account.

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  • 48. 

    Mohamed Bouazizi is associated with which of the following events?

    • Iranian revolution.

    • Arab Spring.

    • Lebanese civil war.

    • Syrian Civil war.

    Correct Answer
    A. Arab Spring.
    Explanation
    Mohamed Bouazizi was a Tunisian street vendor who set himself on fire on 17 December 2010, which became a catalyst for the Tunisian Revolution and the wider Arab Spring against autocratic regimes.

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  • 49. 

    Identify correct statements from the following. 1. Revenue Receipts are the receipts that neither create liabilities nor reduce assets to the government. 2. All capital receipts are exempt from tax, unless there is a specific provision for taxing them. Codes:

    • 1 Only

    • 2 Only

    • Both 1 & 2

    • Neither 1 nor 2

    Correct Answer
    A. Both 1 & 2
    Explanation
    Government receipts which neither (i) create liabilities nor (ii) reduce assets are called revenue receipts. These are proceeds of taxes, interest and dividend on government investment, cess and other receipts for services rendered by the government. These are current income receipts of the government from all sources. Government revenue is the means for government expenditure. In the same way as production is means for consumption. The general rule under the Income-tax Law is that all revenue receipts are taxable, unless they are specifically granted exemption from tax and all capital receipts are exempt from tax, unless there is a specific provision for taxing them.

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  • Mar 14, 2022
    Quiz Edited by
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  • Mar 30, 2019
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