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Indian Economy Previous Year Questions (PYQ) with Answers – Page 22

हिंदी में पढ़ें

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
Q421.Indian EconomyAsked in: CDS · CDS-II 2019, GKEasy

The value of the slope of a normal demand curve is

  1. A.positive
  2. B.negative
  3. C.zero
  4. D.infinity
Show answer
Correct answer: B. negative

A normal demand curve slopes downward from left to right, so its slope is negative. The law of demand says that, other things remaining the same, the quantity demanded of a good rises when its price falls and falls when its price rises.

Q422.Indian EconomyAsked in: CDS · CDS-II 2019, GKMedium

Which one of the following statements with regard to economic models is not correct ?

  1. A.They involve simplification of complex processes.
  2. B.They represent the whole or a part of a theory.
  3. C.They can be expressed only through equations.
  4. D.They help in gaining an insight into cause and effect.
Show answer
Correct answer: C. They can be expressed only through equations.

This is false: an economic model can be stated in words, shown in diagrams or graphs, or written as equations.

Q423.Indian EconomyAsked in: CDS · CDS-II 2019, GKEasy

What do you mean by 'Demographic Dividend'?

  1. A.A rise in the rate of economic growth due to a higher share of working age people in a population
  2. B.A rise in the rate of literacy due to development of educational institutions in different parts of the country
  3. C.A rise in the standard of living of the people due to the growth of alternative livelihood practices
  4. D.A rise in the gross employment ratio of a country due to government policies
Show answer
Correct answer: A. A rise in the rate of economic growth due to a higher share of working age people in a population

Demographic dividend is the growth bonus a country gets when its working age group grows larger than its dependent population.

Q424.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IMedium

Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?

  1. A.Curbing imports of non-essential goods and promoting exports
  2. B.Encouraging Indian borrowers to issue rupee denominated Masala Bonds
  3. C.Easing conditions relating to external commercial borrowing
  4. D.Following an expansionary monetary policy
Show answer
Correct answer: D. Following an expansionary monetary policy

Expansionary policy cuts interest rates and adds money to the system, which pushes capital out and weakens the rupee further, so it is not a step to defend the currency.

Q425.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IMedium

Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

  1. A.Spices
  2. B.Fresh fruits
  3. C.Pulses
  4. D.Vegetable oils
Show answer
Correct answer: D. Vegetable oils

Edible vegetable oils are India's largest agricultural import by value, and they have stayed at the top since well before this question was set.

Q426.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IMedium

Consider the following statements : 1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries. 2. In terms of PPP dollars, India is the sixth largest economy in the world. 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: A. 1 only

Statement 1 is the definition of purchasing power parity, while statement 2 understates India's position. A PPP exchange rate is the rate at which the currency of one country would have to be converted into that of another to buy the same basket of goods and services in both.

Q427.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IMedium

The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus

  1. A.transportation cost only
  2. B.interest cost only
  3. C.procurement incidentals and distribution cost
  4. D.procurement incidentals and charges for godowns
Show answer
Correct answer: C. procurement incidentals and distribution cost

The economic cost is the full cost the Food Corporation of India bears on each quintal of wheat or rice it handles.

Q429.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IHard

Consider the following statements : 1. Petroleum and Natural Gas Regulatory Board (PNGRB) is the first regulatory body set up by the Government of India. 2. One of the tasks of PNGRB is to ensure competitive markets for gas. 3. Appeals against the decisions of PNGRB go before the Appellate Tribunals for Electricity. 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: B. 2 and 3 only

PNGRB promotes competition in gas markets and its decisions are appealed before the electricity tribunal, but it was far from the first regulator in India.

Q430.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IHard

With reference to India's Five-Year Plans, which of the following statements is/are correct? 1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries. 2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power. 3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan. Select the correct answer using the code given below.

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

Statements 1 and 2 describe real turns in Indian planning, while statement 3 does not.

Q431.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IMedium

Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

  1. A.Certificate of Deposit
  2. B.Commercial Paper
  3. C.Promissory Note
  4. D.Participatory Note
Show answer
Correct answer: D. Participatory Note

A Participatory Note, or P-Note, lets a foreign investor gain exposure to Indian shares through an FPI that is registered with SEBI, without registering in India itself.

Q432.Indian EconomyAsked in: CDS · CDS-I 2019, GKMedium

Consider the following statements about indifference curves:

1. Indifference curves are convex to the origin.

2. Higher indifference curve represents higher level of satisfaction.

3. Two indifference curves cut each other.

Which of the statements given above is/are correct?

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

Statements 1 and 2 are correct; statement 3 is wrong because two indifference curves can never cut each other. An indifference curve shows the combinations of two goods that give a consumer the same satisfaction.

Q433.Indian EconomyAsked in: NDA · NDA-I 2019, GATEasy

"Mission Indradhanush" is related to

  1. A.Bullet train project
  2. B.Agriculture development
  3. C.Women empowerment
  4. D.Full immunization
Show answer
Correct answer: D. Full immunization

Mission Indradhanush is the Union Health Ministry's drive to fully immunise children and pregnant women against vaccine-preventable diseases. The mission was launched on 25 December 2014 to reach children who had missed their routine vaccines or had received them only partly, especially in districts with low coverage.

Q434.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IMedium

In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis? 1. The foreign currency earnings of India's IT sector 2. Increasing the government expenditure 3. Remittances from Indians abroad Select the correct answer using the code given below.

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

A currency crisis comes when a country runs short of foreign exchange and its currency falls sharply, as India saw in 1991.

Q435.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IHard

Consider the following statements : 1. Most of India's external debt is owed by governmental entities. 2. All of India's external debt is denominated in US dollars. 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: D. Neither 1 nor 2

Both statements misread the make-up of India's external debt. Statement 1 is wrong because most of India's external debt is owed by non-government borrowers: companies through external commercial borrowings, banks through non-resident Indian deposits, and short-term trade credit.

Q436.Indian EconomyAsked in: CDS · CDS-I 2019, GKMedium

Which one of the following statements is not correct?

  1. A.When total utility is maximum, marginal utility is zero.
  2. B.When total utility is decreasing, marginal utility is negative.
  3. C.When total utility is increasing, marginal utility is positive.
  4. D.When total utility is maximum, marginal and average utility are equal to each other.
Show answer
Correct answer: D. When total utility is maximum, marginal and average utility are equal to each other.

At the point where total utility is highest, marginal utility is zero but average utility is still positive, so the two cannot be equal.

Q438.Indian EconomyAsked in: CDS · CDS-I 2019, GKMedium

Which one of the following is not an assumption in the law of demand?

  1. A.There are no changes in the taste and preferences of consumers.
  2. B.Income of consumers remains constant.
  3. C.Consumers are affected by demonstration effect.
  4. D.There are no changes in the price of substitute goods.
Show answer
Correct answer: C. Consumers are affected by demonstration effect.

The law of demand assumes buyers are not swayed by imitating others; the demonstration effect is in fact one of its exceptions.

Q439.Indian EconomyAsked in: UPSC Civil Services · CSE Prelims 2019, GS Paper IMedium

Consider the following statements :

1. Coal sector was nationalized by the Government of India under Indira Gandhi.

2. Now, coal blocks are allocated on lottery basis.

3. Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production.

Which of the statements given above is/are correct?

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

The coal industry was nationalised under Indira Gandhi, but coal blocks are not given by lottery and India still imports coal.

Q440.Indian EconomyAsked in: CDS · CDS-II 2019, GKMedium

Indexation is a method whose use can be associated with which one of the following ?

  1. A.Controlling inflation
  2. B.Nominal GDP estimation
  3. C.Measurement of savings rate
  4. D.Fixing of wage compensation
Show answer
Correct answer: D. Fixing of wage compensation

Indexation links a payment to a price index so that its real value is protected when prices rise. Under indexation, wages, pensions or other payments are adjusted automatically in line with a price index.