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Indian Economy Previous Year Questions (PYQ) with Answers – Page 12

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Indian Economy questions asked in previous year papers of SSC, Banking, Railway and other exams, with the exam and year, answers and explanations.

580 previous-year questions

All Indian Economy questionsIndian Economy NotesPYQs by exam
Q221.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IEasy

In India, which one of the following is responsible for maintaining price stability by controlling inflation?

  1. A.Department of Consumer Affairs
  2. B.Expenditure Management Commission
  3. C.Financial Stability and Development Council
  4. D.Reserve Bank of India
Show answer
Correct answer: D. Reserve Bank of India

Controlling inflation through monetary policy is the RBI's legal duty. The RBI Act, 1934 was amended in 2016 to give India a flexible inflation targeting framework.

Q223.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IHard

With reference to Convertible Bonds, consider the following statements : 1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest. 2. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices. Which of the statements given above is/are correct ?

  1. A.1 only
  2. B.2 only
  3. C.Both 1 and 2
  4. D.Neither 1 nor 2
Show answer
Correct answer: C. Both 1 and 2

Investors accept a lower coupon on a convertible bond in return for the option to become shareholders, and that option gives some protection against rising prices.

Q225.Indian EconomyAsked in: CDS · CDS-I 2022, GKMedium

Which one of the following statements with regard to the National Rural Employment Guarantee Act, 2005 is correct ?

  1. A.It ensures 175 days of employment to needy persons in rural areas.
  2. B.It gives higher wages to women workers.
  3. C.People are generally given both skilled and unskilled jobs.
  4. D.This is implemented only in rural areas of India.
Show answer
Correct answer: D. This is implemented only in rural areas of India.

As its name says, the Act guarantees work to households in rural areas; towns and cities are outside its scope.

Q227.Indian EconomyAsked in: CDS · CDS-I 2022, GKMedium

Which one of the following terms denotes the inputs in terms of tools, machines, buildings, raw materials and money in hand required at any stage of production?

  1. A.Fixed capital
  2. B.Working capital
  3. C.Physical capital
  4. D.Human capital
Show answer
Correct answer: C. Physical capital

Physical capital is the variety of inputs, such as tools, machines, buildings, raw materials and money in hand, needed at every stage of production.

Q229.Indian EconomyAsked in: RRB Group D · 8 Sept 2022, Shift 2Hard

The Stree Manoraksha project aimed at extending mental health training to 6000 One Stop Centre functionaries across India was launched by whom in March 2022?

  1. A.Amit Shah
  2. B.Smriti Zubin Irani
  3. C.Dr. Mansukh Mandaviya
  4. D.Narendra Modi
Show answer
Correct answer: B. Smriti Zubin Irani

The project was launched in March 2022 by the Minister of Women and Child Development, who then held that office, in collaboration with the national mental health institute at Bengaluru, to train the staff of One Stop Centres in handling the mental health needs of women affected by violence.

Q230.Indian EconomyAsked in: CDS · CDS-II 2022, GKEasy

The Department for Promotion of Industry and Internal Trade (DPIIT) has revised the base year index of Eight Core Industries having a combined weight of about 40.27 percent in the Index of Industrial Production. Which one of the following is not one of the Eight Core Industries ?

  1. A.Coal
  2. B.Refinery products
  3. C.Rubber products
  4. D.Cement
Show answer
Correct answer: C. Rubber products

Rubber products are not among the Eight Core Industries tracked by the Index of Eight Core Industries.

Q231.Indian EconomyAsked in: CDS · CDS-II 2022, GKEasy

Which one of the following statements about Non-Banking Financial Companies (NBFCs) is not correct ?

  1. A.NBFCs cannot accept demand deposits.
  2. B.NBFCs cannot give loans.
  3. C.NBFCs cannot issue cheques drawn on themselves.
  4. D.NBFCs cannot offer deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation.
Show answer
Correct answer: B. NBFCs cannot give loans.

This statement is false, because lending and advancing loans is the main business of most NBFCs. A Non-Banking Financial Company is a company registered under the Companies Act whose principal business is loans and advances, buying shares and securities, leasing, hire-purchase, insurance or chit funds.

Q232.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IMedium

With reference to the Indian economy, consider the following statements: 1. A share of the household financial savings goes towards government borrowings. 2. Dated securities issued at market-related rates in auctions form a large component of internal debt. Which of the above statements is/are correct?

  1. A.1 only
  2. B.2 only
  3. C.Both 1 and 2
  4. D.Neither 1 nor 2
Show answer
Correct answer: C. Both 1 and 2

Household savings reach the government through many channels, and dated securities sold in auctions make up the bulk of the Centre's internal debt.

Q233.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IMedium

With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct? 1. Acquiring new technology is capital expenditure. 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below:

  1. A.1 only
  2. B.2 only
  3. C.Both 1 and 2
  4. D.Neither 1 nor 2
Show answer
Correct answer: A. 1 only

Buying new technology creates a lasting asset, so it is capital expenditure; debt and equity are ways of raising money, not kinds of expenditure.

Q234.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IHard

Which one of the following situations best reflects "Indirect Transfers" often talked about in media recently with reference to India?

  1. A.An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment
  2. B.A foreign company investing in India and paying taxes to the country of its base on the profits arising out of its investment
  3. C.An Indian company purchases tangible assets in a foreign country and sells such assets after their value increases and transfers the proceeds to India
  4. D.A foreign company transfers shares and such shares derive their substantial value from assets located in India
Show answer
Correct answer: D. A foreign company transfers shares and such shares derive their substantial value from assets located in India

That is exactly what an indirect transfer means in Indian tax law. In an indirect transfer, no Indian asset changes hands directly.

Q235.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IMedium

Which of the following activities constitute real sector in the economy ?

1. Farmers harvesting their crops

2. Textile mills converting raw cotton into fabrics

3. A commercial bank lending money to a trading company

4. A corporate body issuing Rupee Denominated Bonds overseas

Select the correct answer using the code given below:

  1. A.1 and 2 only
  2. B.2, 3 and 4 only
  3. C.1, 3 and 4 only
  4. D.1, 2, 3 and 4
Show answer
Correct answer: A. 1 and 2 only

The real sector produces actual goods and services, so harvesting crops and making cloth belong to it, while lending and issuing bonds belong to the financial sector.

Q236.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IHard

With reference to the Indian economy, what are the advantages of "Inflation-Indexed Bonds (IIBs)"?

1. Government can reduce the coupon rates on its borrowing by way of IIBs.

2. IIBs provide protection to the investors from uncertainty regarding inflation.

3. The interest received as well as capital gains on IIBs are not taxable.

Which of the statements given above are correct?

  1. A.1 and 2 only
  2. B.2 and 3 only
  3. C.1 and 3 only
  4. D.1, 2 and 3
Show answer
Correct answer: A. 1 and 2 only

IIBs protect investors from inflation, and because of that protection the government can borrow at a lower coupon; they carry no special tax exemption.

Q237.Indian EconomyAsked in: CDS · CDS-II 2022, GKHard

Which one of the following is the first and the oldest Government-owned coal mining company in India ?

  1. A.Neyveli Lignite Corporation
  2. B.Singareni Collieries Company Limited
  3. C.Coal India Limited
  4. D.Mahanadi Coalfields Limited
Show answer
Correct answer: B. Singareni Collieries Company Limited

Incorporated in 1920 and later taken over by the government, SCCL is India's oldest government-owned coal mining company. Coal was found in the Godavari valley near Yellandu in the 1870s, and the Hyderabad (Deccan) Company began mining there in 1886.

Q238.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IMedium

With reference to the "G20 Common Framework", consider the following statements:

1. It is an initiative endorsed by the G20 together with the Paris Club.

2. It is an initiative to support Low Income Countries with unsustainable debt.

Which of the statements given above is/are correct ?

  1. A.1 only
  2. B.2 only
  3. C.Both 1 and 2
  4. D.Neither 1 nor 2
Show answer
Correct answer: C. Both 1 and 2

The Common Framework for Debt Treatments was agreed by the G20 and the Paris Club in November 2020 to help low-income countries with unsustainable debt.

Q239.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IHard

With reference to the Indian economy, consider the following statements :

1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee.

2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness.

3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER.

Which of the above statements are correct ?

  1. A.1 and 2 only
  2. B.2 and 3 only
  3. C.1 and 3 only
  4. D.1, 2 and 3
Show answer
Correct answer: C. 1 and 3 only

A rise in NEER means the rupee has gained against a basket of currencies, and higher domestic inflation makes REER drift away from NEER.

Q240.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2022, GS Paper IMedium

"Rapid Financing Instrument" and "Rapid Credit Facility" are related to the provisions of lending by which one of the following ?

  1. A.Asian Development Bank
  2. B.International Monetary Fund
  3. C.United Nations Environment Programme Finance Initiative
  4. D.World Bank
Show answer
Correct answer: B. International Monetary Fund

Both are IMF windows for quick emergency financing to member countries facing an urgent balance of payments need. The Rapid Financing Instrument (RFI) is open to all IMF members and gives fast, low-access financial help without a full-fledged programme.