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Set 5: Part 7: Economics MCQ for Prelims
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Set 5: Part 7: Economics MCQ For Prelims!!

Akshay Kadam
With 5 yr UPSC coaching experience; I wl help u get conceptual clarity of topics & their Applied Understanding to score more.

U
Unacademy user
Reasoning isn't my thing but u made it easy, thanks a lot
  1. Economics Test Series For Prelims Master Economics with the help of Conceptual Objective unacademy Practice Questions, By Prof. Akshay D Kadam https://unacademy.com/user/AkshayDKadan


  2. Which of the following factors can affectConsider the following statements about the exchange rates? 1) Differentials in Inflation 2) Differentials in Interest Rates 3) Political Stability 4) Current-Account Deficits. Which among the above are correct statements? Options ) 2 3 and 4 b) 1 2 and 3 c) 1 2 and 4 d) 1 2 3 and 4 GDP and GVA measures of economic activity - 1) The GDP methodology gives picture of state of economic activity from producers' side or supply side.. 2) The GVA model gives picture from consumers' side or demand perspective. Which of the above statements are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2 0 https:/lunaca demy.com/user/AkshayDKadam


  3. Consider the following statements about )India's first Agri commodity options Reserve Tranche Position- 1) It is the primary means of financing the the following products? International Monetary Fund is througha) Onion members' quotas. 2) The difference between a member's c) Guar Seed quota and the IMF's holdings of its foreign d) Palm Oil currency kept with IMF is a country's Reserve Tranche Position (RTP). Which of the above statements are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2 contract has been launched for which of b) Pulses https://unacademy.com/userlAkshayDKadam


  4. In order to leverage private sector Which of the following contribute to investment in Green Infrastructure tax revenues of panchayats and projects in the country India has municipal bodies? jointly established "Green Growth 1) House Tax. Equity Fund" with which of the following country? a) USA b) Japan C) UK d) Germany 2) Vehicle Tax. 3) Pilgrim Tax. 4) Water Tax. Options - a) 1 2 and 3 b) 1 2 and 4 c) 2 3 and 4 d) 1 2 3 and 4 https://unacademy.com/user/AkshayDKadam


  5. Consider the following statements about Consider the following statements Special Mention Accounts (SMA)- Special Mention account is non performing Investment asset in which Principal or interest payment is wholly or partly overdue for the maximum design flexibility and more than 30 days. 2) Special Mention Accounts are classified |2) In Brownfield Investment facility the in to 3 categories at SMA1, SMA 2, and start-up costs may be greatly reduced; SMA 3; for better classification and understanding of Nonperforming Assets. can be avoided as well. Which of the above statements are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2 about Green Field and Brown Field 1) Green Field investment facility offers efficiency to meet the project's needs. also the time devoted to construction Which of the above statements are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2 https:/lunacademy.com/userlAkshayDKadam


  6. Consider the following statements about India has agreed to work together for New Development Bank promoted by cooperation in pharmaceutical sector, for BRICS countries 1)In finances projects in BRICS countries Andijan region. Andijan region is part of only for sustainable development 2) In NDB every country has been assigned only one veto and no countryb) Myanmar enjoys any veto. Which of the above statements are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2 creating a free pharmaceutical zone in which of the following country? a) Bangladesh c) Iran d) Uzbekistan https://unacademy.com/user/AkshayDKadam


  7. Consider the following statements about Which of the following organisation has Public Finance Management systemlaunched its GPI (Global Payment It is platform to monitor utilisation of Innovation) Tracker system to help funds provided to implementing agencies and state governments. It is implemented by Controller General activity? of Accounts and administered by the a) SWIFT a global financial messaging Department of Expenditure, both in Ministry of Finance. Which of the above statements are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2 banks track their global transactions at all times and keep full vigil on payment service b) Bank for International Settlements c) European Central Bank d) Federal Reserve System/Central bank of USA https://unacademy.com/user/AkshayDKadam


  8. Which of the following is/areWhich of the following is/are advantage of advantage of Fiat currency Bitcoins/Digital currency over Fiat currency? over Barter Trade? 1) It avoids double coincidence coincidence of wants over fiat currency. of wants 2) It offers Divisibility of Valueof Value over fiat currency 3) It offers Fungibility of value. 3) Bitcoins/Digital currency offers higher 4) Better storage of Value ofFungibility of value over fiat currency. labour. Options - a) 1 and 4 b) 1 2 and3 c) 1 2 and 4 d) 1 2 3 and 4 1) Bitcoins/Digital currency avoids double 2) Bitcoins/Digital currency offers more Divisibility 4) Bitcoins/Digital currency allows Deferred Payment, Future contractsover fiat currency. Options - a) 1 and 4 b) 1 2 and 3 c) 1 2 and 4 d) 2 3 and 4 https://unacademy.com/user/AkshayDKadam


  9. Which of the following Consider the different types of disequilibrium in Balance Of are primary functions of Payments and mark the correct pairs money? 1) As a medium of exchange 1) Structural Diseguilibrium - Changes in tastes, fashions, income etc Or Newer and Cheaper substitutes available abroad. 2) Cyclical Disequilibrium - Inelastic imports and increased imports in boom times. 2) As a measure of3 ShoitRun Disequilibrium- Technological improvements in 4 value 3) As a store of value population 4) As a basis of credit 4) Long Run I Secular Disequilibrium - Unexpected contingencies Which of the above are like failure of rains or favorable monsoons, strikes, industrial peace incorrect options? Options a) 1 and 2 b) 1 3 and 4 c) 2 3 and 4 d) 3 and 4 importing countries; Persistent Inflation in economy; or increase in 8 or unrest etc. Which of the above are incorrect pairs? Options a) 1 and 2 b) 1 3 and4 c) 2 3 and4 d) 3 and 4 https://unacademy.com/userlAkshayDKadam


  10. Union government has set up Subhash Garg Committee', with GeM 3.0 which of the following mandate? 1) It is third version of Government e- a) Regulation of Fintech sector in Marketplace; launched by Ministry of India b) Addressing technological loopholes in banking sector c) Addressing aftereffects of demonetization and gst to revive Government growth d) To bring more stringent laws on a) 1 Only banking frauds. Consider the following statements about Commerce and Industry. 2) GeM is an Online Market platform to facilitate procurement of goods and services by various Ministries and agencies of the Which of the above statements are correct? b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2 https://unacademy.com/user/AkshayDKadam


  11. According to recent report published by No money can be withdrawn without World Steel Association (WSA); which prior parliamentary approval from of the following is correct order of top 1) Consolidated fund of India. three largest crude steel producer of the 2) Contingency Fund of India. world? a) CHINA JAPAN INDIA b) USA> JAPAN INDIA c) USA>CHINA>INDIA d) CHINA> USA INDIA 3) Public Account Of India Options - a) Only 1 b) Only 1 and 2 c) Only 3 d) 1 2 and3 https://unacademy.com/user/AkshayDKadam


  12. The Finance commission through system of tax devolution and grants in 1) The expenditure that does not result in to aid addresses which of the following creation of assets for government of India is factors? 1) Horizontal imbalance among states 2) Vertical imbalance between Centre is treated as revenue receipt. and states. 3) Inter State inequality. 4) Intra State inequality. Which among the above are correct statements? statements? a) Only 1 and 3 b) Only 1 and 4 c) Only 1 2 and 3 d) Only 3 and 4 Consider the following statements about treated as revenue expenditure. 2) The receipt that does not result in to creation of liabilities for government of India 3) All grants given to State and UT's are treated as revenue expenditure. Which among the above are correct a) Only 1 and 3 b) Only 2 and 3 c) Only 1 and 2 d) 1 2 and 3


  13. Consider the following statements about Consider the following Assertion A: Falling of Dependency ratio; Gini coefficient and its relation with decreases saving and investment Reason R: In case of increasing dependency ratio Government may increase tax rates to account for increased spending on social sector related with Gini coefficient. schemes like pensions leading to reduction in disposable income.. Select correct answer using codes given with Gini Coefficient. below: a) Both A and R are correct and R is a correct? correct explanation of A. b) Both A and R are correct but R is not b) 1 and 3 only a correct explanation of A. c) A is correct, R is incorrect. d) A is incorrect, R is correct. 2 different factors 1) Gini coefficient varies inversely with median age of population. 2) High GDP growth rate is negatively 2 3) Percentage of population in Agriculture sector is negatively related 0 Which of the above statements is/are a) 1 and 2 only c) 2 and 3 only d) 1 2 and 3 only


  14. Consider the following statements about State Bank of India (SBI) along with FTSE Masala Bonds 1) Masala bonds are bonds issued outside India but denominated in Indian Exchange (LSE). Bond Index aims to- Rupees 2) Currently, masala bonds are reckoned investors in international markets to analyse both under combined corporate debt limit India's government bond market (CCDL) for FPl (Foreign Portfolio Investments) and external commercial investors in international markets to analyse borrowings (ECBs) Which of the above statements are correct? a) Only 1 b) Only 2 c) Both are correct d) None of the above Russell, global index and data provider launched FTSE SBI Bond Index series at London Stock 1) transparent and reliable benchmark for 2) transparent and reliable benchmark for India's Corporate bond market. Which of the above statements are correct? a) Only 1 b) Only 2 c) Both are correct d) None of the above https://unacademy.com/userlAkshayDKadam


  15. Which of the following organisation has developed a Composite Water Management Index as a useful tool to 1) Gross Command Area is area which is fit for assess and further improve the performance in cultivating crops; and can be physically efficient management of water resources? a) NITI Aayog b) Ministry of Water Resources | c) Ministry of Drinking Water and Sanitationuncultivable area. d) Ministry of Environment & Forests (MoEF) Options Consider the following statements about Gross Command Area and Cultural command area irrigated by canal irrigation scheme. 2) Cultural command area is a area that includes both cultivable area as well as Which of the above statements are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct https://unacademy.com/user/AkshayDKadam


  16. The buying and selling of shares throughWhich of the following are debt stock exchanges is part of which of the instruments? following market? a) Follow on public offer b) Primary Market c) Secondary Market d) Buyback Offer 1) Bonds 2) Treasury Bills 3) Debenture 4) Shares Options - a) 1 2 and 3 only b) 1 2 and 4 Only c) 2 3 and 4 Only d) 1 2 3 and 4 Only https://unacademy.com/userlAkshayDKadam


  17. Which of the following is a Consider the following statements of comparison about Hybrid Instrument that is Preference Share holders and Equity share holders - combination of loan and 1) Preference shares represent partial ownership in a ownership instrument? company, although preferred stock shareholders do not a) Non Convertible debentures b) Bond Holders c) Preference Share holders d) Equity Share holders Options enjoy any of the voting rights like Equity share holders. 2) Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before Equity share holders Which of the above statements are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct https://unacademy.com/userlAkshayDKadam


  18. Consider the following statements Consider the following statements about about Small Finance Banks Payments banks 1) There is restriction in the area 1) Payments bank are required to invest f operations of small finance minimum 75 per cent of its "demand deposit banks that is they have to operate balances" in Statutory Liquidity Ratio (SLR) in specific areas allocated to them. eligible Government securities/treasury bills with 2) At least 50 per cent of its loan maturity up to one year. portfolio should constitute loans 2) Payments bank are required tohold maximum and advances of upto Rs. 10 lakh. |25 per cent in current and time/fixed deposits Which of the above statements with other scheduled commercial banks for are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct operational purposes and liquidity management. Which of the above statements are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct https:/lunacademy.com/user/AkshayDKadam


  19. Consider the following statements Consider the following statements about Cess about Payments banks 1) The payments bank cannot undertake lending activities. 2) Payments bank are not allowed to states. issue ATM/debit cards and credit 2) Both Surcharge and Cess goes to cards. Which of the above statements are only for the specific purposes. incorrect? a) 1 Only b2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct and Surcharge? 1) A common feature of both surcharge and cess is that the centre need not share it with Consolidated Fund of India but can be spend Which of the above statements are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct https://unacademy.com/userlAkshayDKadam


  20. Aadhaar is a 12-digit unique identity number |The Union Finance Ministry has issued to all Indian residents based on their launched second exchange-traded biometric and demographic data. The data is fund (ETF), named Bharat 22. What is collected by the Unique Identification Authority of India (UIDAI), a statutory authority established iby the government of a) It is aimed at speeding up India, under which of the following ministry/Organisations? a) Ministry of Home affairs. b) Ministry of Electronics and Information reviving sick PSU's. Technology c) Unique Identification Authority of India sector banks. (UIDAI) is an autonomous independent statutory authority; and does not function investments in Indian infrastructure under any ministry or organisation. d) Finance Ministry the objective behind launching Bharat 22? governments disinvestment programme b) It is aimed at raising funds for c) It is aimed at capitalising public d) It is aimed at increasing foreign fund. ttps:/lunacademy.com/user/AkshayDKadam


  21. Which of the following falls under Which of the following steps are Export and Import of Services under taken in case o BOP Current Account of India? 1) Money spent on travel by Tourists. 1) Monetary expansion. 2) Tuition paid to Universities by 2) Devaluation of currency. International Students. 3) Banking Insurance and consulting 4) Depreciation of currency. services in Foreign Land. 4) Interest received on international a) 1 and 2 investments. Options - a) 1 2 and 3 b) 1 2 and4 c) 2 3 and 4 d) 1 3 and 4 disequilibrium/Deficit? 3) Monetary contraction. Options b) 1 and 4 c) 3 and d) 3 and 2 https://unacademy.com/userlAkshayDKadam


  22. Which of the following statements about |Which of the following statements convertibility in Indian economy? 1) India has full convertibility of rupee on economy? trade/Visible/Merchandise account. 1) India has No convertibility on 2) India has full convertibility of rupee on capital account. services/Invisibles account. Which of the above statements are correct? a) Only 1 b) Only 2 c) Both 1 and 2 are correct d) Neither 1 nor 2 correct about convertibility in Indian 2) India has floating exchange rate. Which of the above statements are correct? a) Only 1 b) Only 2 c) Both 1 and 2 are correct d) Neither 1 nor 2 correct https://unacademy.com/userlAkshayDKadam


  23. Consider the following statements about BASEL III Norms regulatory capital 1) Capital adequacy ratio is the ration of amount of banks Capital(tier I +tier II) to the 1) Capital adequacy ratio under total loans/advances made by the bank. 2) Tier 1 capital predominantly consists of | 8%. common equity that is amount that all common shareholders have invested in the | 7% while Tier 2 capital requirement is company. Which of the above statements are correct? Which of the above statements are a) Only 1 by,Only 2 c) Both 1 and 2 are correct d) Neither 1 nor 2 correct Consider the following statements about BASEL III Norms regulatory capital requirement in India- BASAL IIl norms to be maintained is 2) Tier I capital requirement in India is 2% correct? a) Only 1 o) oh 2 and 2 are corect c) Both 1 and 2 are correct d) Neither 1 nor 2 correct https://unacademy.com/userlAkshayDKadam


  24. Consider the following statements about BASEL Ill The global financial stability Norms regulatory capital 1) The objective behind maintaining Capital conservation buffer is to increase capital requirements in good times and decrease theb) IMF same in bad times. 2) The objective behind maintaining Counter cyclical buffer is to maintain cushion of capital that can be used to absorb losses during periods of financial and economic stress. Which of the above statements are correct? report was released by which of the following organisation? a) World Economic Forum c) World Bank d) UNDP a) Only1 b) Only 2 c) Both 1 and 2 are correct d) Neither 1 nor 2 correct https://unacademy.com/userlAkshayDKadam