30 Days Revision Module Day 13 - Economy II (UPSC Prelims 2021)

1) With reference to monetary policies, which one of the following measures indicates accommodative monetary policy?

2) With respect to Foreign Direct Investment (FDI) in Indian Textiles sector, consider the following statements:

1. Textile sector is open to FDI under 100% automatic route.
2. Nearly 80% of textile units in India are Micro Small & Medium Enterprises (MSME).
3. Japan ranks first as the major FDI investor in Indian Textiles sector.

Which of the statements given above are correct?

3) Consider the following statements about Sovereign Gold Bonds (SGBs)

1. The bond is issued directly by the government of India.
2. The minimum investment will be 1 gram with a maximum limit of subscription of 4 kg for individuals and 20 kg for trusts.
3. Capital Gains Tax arising on redemption of SGB to an individual has been exempted.

Which of the Statements given above is/are correct?

4) Consider the following statements about ‘Duty Drawback’

1. It is one of the export incentive programmes acceptable under World Trade Organisation rules.
2. Under this, duties, taxes and fees paid on exported merchandise are refunded upon the importing of qualified articles.

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5) With reference to Internal Ombudsman Scheme for Scheduled Banks, consider the following statements

1. There is no provision of statutory powers under this scheme
2. Scheduled commercial Banks in India have an Internal Ombudsman and they are appointed from within bank staff
3. It is not applicable for Regional Rural Banks

Which of the statements given above is/are correct?

6) The inflationary impact of the inflow of foreign capital in India is neutralized by the Reserve Bank of India by which one of the following methods?

7) The reserve money is composed of which of the following codes?

1. Currency in circulation with public
2. Deposit held with RBI by a selected group of privileged individuals like ex-governors and deputy governors of RBI and few others
3. Banker’s deposit with RBI
4. Cash reserve with banks to meet the day to day cash requirements of depositors.
5. Cash Reserve Ratio 

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8) Mr. Ram travelled to England for medical operation. He had to bear the cost of his air travel by Air India as well as the cost of hospitalization. In this context, which one of the following is true in terms of entry in India’s balance of payments transactions?

9) A high rate of inflation tends to worsen Balance of Payments because

10) Which among the following is/are the likely benefit(s) of financial inclusion in Banking Sector?

1. Reduction in cash economy
2. Improvement in capital formation in the country
3. Availability of adequate and transparent credit from formal banking channels

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11) Which among the following are correct with respect to NBFC?

1. They can accept demand deposits, but not time deposits.
2. Nidhi Companies are regulated by SEBI and Mutual Benefit companies are regulated by Ministry of Corporate Affairs.
3. Systemically Important Core Investment Company is an NBFC carrying on the business of acquisition of shares and securities which can accept public deposits.

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12) Which of the following correctly describes the concept of Inflationary Gap?

13) ‘A person (named X) deposits his money in a bank. This money is in turn invested in the borrower’s (named Y) business or property. The profits generated from the business is then shared between X and Y. There is no separate interest given to X.’

Which one of the following best describes the above banking transaction?

14) Indirect taxes have been left out of Wholesale Price Index mainly in order to

15) The term ‘helicopter money’ which was seen in the news is related to which one of the following?

16) In our economy, if market exchange rate of Dollars decreases, then

1. The domestic currency will depreciate
2. The exporters will be benefitted
3. The importers will be benefitted
4. The domestic currency will appreciate

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17) Consider the following phenomena.

“Some Countries are deliberately devaluing their currency against the dollar. The practice would mean that the country is artificially lowering the value of its currency to gain an unfair advantage over others”.

The above action rightly indicates which one of the following phenomena?

18) A person, living in the rural region, can get the direct credit assistance from which of the following institutions?

1. Public Sector Banks
2. Private Sector Banks
3. Cooperative Banks
4. National Bank for Agriculture and Rural Development.

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19) Consider the following statements with reference to Exchange Traded Fund (ETF)

1. An ETF is a type of fund that owns the underlying asset.
2. ETF, typically has lower daily liquidity and higher fees than mutual funds.
3. Unlike mutual funds, ETF is an investment fund traded on stock exchanges.

Which of the statements given above is/are correct?

20) Consider the following statements about The Deposit Insurance and Credit Guarantee Corporation (DICGC) Amendment Bill, 2021

1. DICGC cannot increase the flat rate premium of 0.15% for a bank from its total outstanding deposits.
2. The maximum limit of insurance cover for bank deposits is Rs. 5 lakh per depositor.

Which of the statement(s) given above is/are correct?