Daily 10 MCQs for Indian Economy for UPSC CSE 2018 By Jatin Verma 20th January, 2018 . Highlights: Emphasis on Concept-building Useful for revising Indian economy part of DN Coverage of Economy related Current Affairs
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INSTRUCTIONS Watch the lessons on 'The Hindu Daily News Analysis and Editorial Analysis' video before or after attempting the question. As soon as the question appears, pause the video, answer the question and resume it. .100% of the time, without fail, calculate your score and write it in the comments section (Compete Correct Conclusion 1-3 Very low chance of selection Can do better, need to grind more 4-5 6-7 Going good, almost there 8 or more Very high chance of selection
unacademy About course course curriculum FAQs Upcoming Indian Economy For UPSC CSE By Jatin Verma In this course, Jatin Verma will cover all the important aspects of Indian Economy and related Current Affairs relevant to the UPSC Civil Services Exam, other Exams conducted by UPSC and the State PSC exams. This course will also be relevant for Economy section of SSC, Banking and other Govt exams Starts on 27th Jan, 2018 43 SESSIONS Live sessions of 1 hour duration each which will comprehensively cover Upcoming Indian Economy LIFETIME ACCESS Get access to recordings of all the live sessions, downloadable notes, study material and other learning APPLY FOR COURSE
Q1: If RBl reduces the CRR requirements, which of the following are most likely to happen? 1) Inflation could rise because of increased money supply 2) Interest rates will increase because of decrease in the money supply. 3) Interest rates on consumer loans may come down Which of the above statements is/are correct? A) 1 and 2 only B) 2 and 3 only C) 1 and 3 only D) All of the above 2
Solution: C (1 and 3) Explanation . Cash Reserve Ratio is a Quantitative tool used by RBI to impact the money supply in the economy. If RBl cuts the CRR, it means that the banks will have to maintain lesser amount as Cash reserve. Now the additional money can be lend out as loans, thus increasing the money supply in the economy. . As this result in more money in hands of people, this could lead to inflation. . Increased money supply could reduce the loan demand, hence banks will have to reduce interest rates on loan 2
Q2: Consider the following statements regarding Monetary Policy Committee (MPC) of the RBI 1) It has total 6 members 2) The members appointed to the committee by central government will have a tenure of 4 years. 3) The members appointed to the committee by central government are eligible for re-appointment. Which of the statements given above is/are correct? A) 1 and 2 only. B) 2 and 3 only. C) 1 and 3 only. D) 1, 2 and 3 2
Solution: A (1 and 2 only) Explanation: . MPC has 6 members . 3 from the RBI - RBI governor, the deputy governor in charge of monetary policy and one official nominated by the central bank. 3 appointed by central government through an external selection committee. . This search committee will be headed by cabinet secretary and comprise of the Secretary (Department of Economic Affairs), the RBl governor and three experts in the field of economics or banking as nominated by the central government. 2 . The government appointed member will have tenure of 4 years, not eligible for re-appointment.
Q3: Consider the following statements regarding National Infrastructure Investment Fund (NIIF) 1) NIIF will invest only in greenfield infrastructure projects 2) NIIF has a totoal corpus of Rs 20,000 crore Which of the statements given above is/are not correct? A) 1 only. B) 2 only. C) Both D) None 2
Solution: C (Both) Explanation It is a Rs 40,000 crore fund. Rs 20,000 crore from Govt, rest from investors. NIIF will invest in greenfield and brownfield projects. NIF will have a dual role of equity capital infusion in projects as well as getting the due diligence done for investment in infrastructure projects and have investors available for them. 2
Q4: Consider the following statements regarding Clean Energy Cess 1) It is an example of Pigouvian Tax 2) t is currently subsumed by GST Which of the statements given above is/are correct? A) 1 only. B) 2 only C) Both D) None 2
Solution: C (Both) Explanation: . Pigouvian Tax is a tax on any market activity that generates negative . The Clean Energy Cess, introduced in 2010, is a carbon tax on the externalities production and importation of coal, lignite and peat, operating on the "polluter pays" principle. . The coal cess or Clean Energy Cess thus had the dual objective of 2 penalising production and import of coal and its variants to encourage a shift towards renewable sources of energy while garnering funds to support research and innovation in clean energy alternatives . It is now subsumed by GST.
Solution: A Explanation: CACP recommends the fair and remunerative prices based on inter- crop price parity, inflation considerations, fair return to farmers and a host of other factors. It is the cabinet Committee on Economic affairs that finally approves it 2
Q7: The Pradhan mantri Jan Dhan Yojna is managed by which Department in Finance ministry: A) Department of Economic Affairs B) Department of Expenditure C) Department of Revenue D) Department of Financial Services 2
Q8: Consider the following products/services 1) Cheque Truncation System 2) Aadhaar Enabled Payment System (AEPS) 3) National Finance Switch 4) RuPay payment gateway Which of the above is/are developed by National Payment Corp of India (NPCI)? A) 1, 2 and 4 only. B) 2, 3 and 4 only. C) 1, 2 and 3 only. D) 1, 2, 3 and 4 2
Solution: D Explanation Cheque Truncation System (CTS) Aadhaar Enabled Payment System (AEPS) National Finance Switch Unified Payments Interface RuPay BHIM App Immediate Payment Service 2 The above are products/services developed by NPCI
Q9: Consider the following: 1) Currency with the public 2) Demand deposits with banks 3) Time deposits with banks Which of these are included in Broad Money (M3) in India? A) 1 and 2 B) 2 and 3. C) 1 and 3 only. D) 1, 2 and 3. 2
Solution: D Explanation MO-Reserve Money= Currency in circulation + Bankers' deposits with RBI M1 = Currency (notes plus coins) held by the public + DD is net demand deposits held by commercial banks. M2 = M1 + Savings deposits with Post Office savings banks M3 = M1 + Net time deposits of commercial banks M4 = M3 + Total deposits with Post Office savings organisations (excluding National Savings Certificates)
Have appeared in UPSC CSE thrice. Have been taking Unacademy Plus courses Academics- Polity, Economics & Current Affairs.