Home › UPSC CSE Prelims › 2022 › Economy
UPSC CSE Prelims 2022 — Economy Questions with Answers
All 18 Economy previous-year questions from UPSC CSE Prelims 2022, each with the correct answer and a full explanation. Practise them as a free, timed mock test with instant scoring.
Practice Economy as a timed test →- Q1.Economy
“Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which one of the following?
- a)Asian Development Bank
- b)International Monetary Fund
- c)United Nations Environment Programme Finance Initiative
- d)World Bank
- Q2.Economy
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 infl ation relative to infl ation in other countries is likely to cause an increasing divergence between NEER and REER. Which of the above statements are correct?
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q3.Economy
With reference to the Indian economy, consider the following statements: 1. If the inflation is too high, Reserve Bank of India (RBI) is likely to buy government securities. 2. If the rupee is rapidly depreciating, RBI is likely to sell dollars in the market. 3. If interest rates in the USA or European Union were to fall, that is likely to induce RBI to buy dollars. Which of the statements given above are correct?
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q4.Economy
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?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
- Q5.Economy
With reference to the India 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. IIGs provide protection to the investors from uncertainty regarding inflation. 3. The interests received as well as capital gains on IIBs are not taxable. Which of the statements given above are correct?
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q6.Economy
With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct? 1. They can sell their own goods in addition to offering their platforms as market-places. 2. The degree to which they can own big sellers on their platforms is limited. Select the correct answer using the code given below:
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
- Q7.Economy
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:
- a)1 and 2 only
- b)2, 3 and 4 only
- c)1, 3 and 4 only
- d)1, 2, 3 and 4
- Q8.Economy
Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with reference to India?
- a)An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment.
- b)A foreign company investing in India and paying taxes to the country of its base on the profits arising out of its investment.
- 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.
- d)A foreign company transfers shares and such shares derive their substantial value from assets located in India.
- Q9.Economy
With reference to the expenditure made by an organization 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:
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
- Q10.Economy
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?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
- Q11.Economy
“System of Rice Intensification” of cultivation, in which alternate wetting and drying of rice fields is practised, results in : 1. Reduced seed requirement 2. Reduced methane production 3. Reduced electricity consumption Select the correct answer using the code given below:
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q12.Economy
Consider the following statements: 1. Tight monetary policy of US Federal Reserve could lead to capital flight. 2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). 3. Devaluation of domestic currency decreases the currency risk associated with ECBs. Which of the statements given above are correct?
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q13.Economy
Consider the following statements: 1. In India, credit rating agencies are regulated by Reserve Bank of India. 2. The rating agency popularly known as ICRA is a public limited company. 3. Brickwork Ratings is an Indian credit rating agency. Which of the statements given above are correct?
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q14.Economy
With reference to the ‘Banks Board Bureau (BBB), which of the following statements are correct ? 1. The Governor of RBI is the Chairman of BBB. 2. BBB recommends for the selection of heads for Public Sector Banks. 3. BBB helps the Public Sector Banks in developing strategies and capital raising plans. Select the correct answer using the code given below:
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q15.Economy
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?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
- Q16.Economy
In India, which one of the following is responsible for maintaining price stability by controlling inflation?
- a)Department of Consumer Affairs
- b)Expenditure Management Commission
- c)Financial Stability and Development Council
- d)Reserve Bank of India
- Q17.Economy
With reference to Non-Fungible Tokens (NFTs), consider the following statements: 1. They enable the digital representation of physical assets. 2. They are unique cryptographic tokens that exist on a blockchain. 3. They can be traded or exchanged at equivalency and therefore can be used as a medium of commercial transactions. Which of the statements given above are correct?
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
- Q18.Economy
In India, which one of the following compiles information on industrial disputes, closures, etrenchments and lay-offs in factories employing worker?
- a)Central Statistics Office
- b)Department for Promotion of Industry and Internal Trade
- c)Labour Bureau
- d)National Technical Manpower Information System
UPSC CSE Prelims 2022 — other subjects
Economy — other years
Ready to test yourself on UPSC CSE Prelims 2022?
Start the timed mock free →