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UPSC CSE Prelims 2024 — Economy Questions with Answers

All 13 Economy previous-year questions from UPSC CSE Prelims 2024, each with the correct answer and a full explanation. Practise them as a free, timed mock test with instant scoring.

1. Q1.Economy

   Consider the following statements: Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment. Statement-II: The USA Government debt is not backed by any hard assets, but only by the faith of the Government. Which one of the following is correct in respect of the above statements?

   • a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I.
   • b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I.
   • c)Statement-I is correct, but Statement-II is incorrect.
   • d)Statement-I is incorrect, but Statement-II is correct.
2. Q2.Economy

   Consider the following statements: Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders. Statement-II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line. Which one of the following is correct in respect of the above statements?

   • a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I.
   • b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I.
   • c)Statement-I is correct, but Statement-II is incorrect.
   • d)Statement-I is incorrect, but Statement-II is correct.
3. Q3.Economy

   Consider the following statements in respect of the digital rupee: 1. It is sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy. 2. It appears as a liability on the RBI's balance sheet. 3. It is insured against inflation by its very design. 4. It is freely convertible against commercial bank money and cash. Which of the statements given above are correct?

   • a)1 and 2 only
   • b)1 and 3 only
   • c)2 and 4 only
   • d)1, 2 and 4
4. Q4.Economy

   Consider the following statements: Statement-I: India does not import apples from the United States of America. Statement-II: In India, the law prohibits the import of Genetically Modified food without the approval of the competent authority. Which one of the following is correct in respect of the above statements?

   • a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
   • b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
   • c)Statement-I is correct, but Statement-II is incorrect
   • d)Statement-I is incorrect, but Statement-II is correct
5. Q5.Economy

   The total fertility rate in an economy is defined as:

   • a)the number of children born per 1000 people in the population in a year.
   • b)the number of children born to a couple in their lifetime in a given population.
   • c)the birth rate minus death rate.
   • d)the average number of live births a woman would have by the end of her child-bearing age.
6. Q6.Economy

   Consider the following statements: 1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India. 2. In India, Foreign Institutional Investors can hold the Government Securities (G-Secs). 3. In India, Stock Exchanges can offer separate trading platforms for debts. Which of the statements given above is/are correct?

   • a)1 and 2 only
   • b)3 only
   • c)1, 2 and 3
   • d)2 and 3 only
7. Q7.Economy

   In India, which of the following can trade in Corporate Bonds and Government Securities? 1. Insurance Companies 2. Pension Funds 3. Retail Investors 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
8. Q8.Economy

   Consider the following: 1. Exchange-Traded Funds (ETF) 2. Motor vehicles 3. Currency swap Which of the above is/are considered financial instruments?

   • a)1 only
   • b)2 and 3 only
   • c)1, 2 and 3
   • d)1 and 3 only
9. Q9.Economy

   With reference to the sectors of the Indian economy, consider the following pairs: Economic activity - Sector 1. Storage of agricultural produce - Secondary 2. Dairy farm - Primary 3. Mineral exploration - Tertiary 4. Weaving cloth - Secondary How many of the pairs given above are correctly matched?

   • a)Only one
   • b)Only two
   • c)Only three
   • d)All four
10. Q10.Economy

    With reference to physical capital in Indian economy, consider the following pairs: Items - Category 1. Farmer's plough - Working capital 2. Computer - Fixed capital 3. Yarn used by the weaver - Fixed capital 4. Petrol - Working capital How many of the above pairs are correctly matched?

    • a)Only one
    • b)Only two
    • c)Only three
    • d)All four
11. Q11.Economy

    With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements: 1. There is no minimum capital requirement for wholly owned banking subsidiaries in India. 2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals. 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
12. Q12.Economy

    With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements: 1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities. 2. CSR rules do not specify minimum spending on CSR activities. 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
13. Q13.Economy

    With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of:

    • a)Bond market
    • b)Forex market
    • c)Money market
    • d)Stock market