Static Quiz 27th March 2025 (Indian Economy)
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Static Quiz 27th March 2025 (Indian Economy) For UPSC Exam
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- Question 1 of 5
1. Question
Which committee recommends the Minimum Support Price (MSP) for various crops in India?
CorrectAnswer: (a) Commission for Agricultural Costs and Prices (CACP)
Explanation:
• MSP is the guaranteed amount paid to farmers when the government buys their produce.
• MSP is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
• CACP is under Ministry of Agriculture and Farmers Welfare.
• Where as The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister approves the price of MSPs.IncorrectAnswer: (a) Commission for Agricultural Costs and Prices (CACP)
Explanation:
• MSP is the guaranteed amount paid to farmers when the government buys their produce.
• MSP is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
• CACP is under Ministry of Agriculture and Farmers Welfare.
• Where as The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister approves the price of MSPs. - Question 2 of 5
2. Question
Which of the following is a qualitative measure used by central banks to control inflation?
CorrectAnswer:(c) Moral suasion
Explanation:
Quantitative tools:
These are direct tools used to control the money supply in the economy:1.Open Market Operations (OMO):
Buying or selling government securities in the open market by central bank to adjust the money supply.2. Cash Reserve Ratio (CRR): Increasing the CRR reduces the amount of funds available for banks to lend, thus reducing money supply and controlling inflation.
3.Repo Rate:
Increasing the repo rate makes borrowing from the central bank more expensive for commercial banks, reducing their lending capacity and money supply in the economy, thereby controlling inflation.Qualitative tools:
These are indirect tools used to control the money supply in the economy:1.Moral Suasion:
This is a tactic used by the central bank to influence and persuade banks to adhere to its policy directions.
By urging banks to restrict lending or follow specific guidelines, the central bank can help manage inflationary trends indirectly.IncorrectAnswer:(c) Moral suasion
Explanation:
Quantitative tools:
These are direct tools used to control the money supply in the economy:1.Open Market Operations (OMO):
Buying or selling government securities in the open market by central bank to adjust the money supply.2. Cash Reserve Ratio (CRR): Increasing the CRR reduces the amount of funds available for banks to lend, thus reducing money supply and controlling inflation.
3.Repo Rate:
Increasing the repo rate makes borrowing from the central bank more expensive for commercial banks, reducing their lending capacity and money supply in the economy, thereby controlling inflation.Qualitative tools:
These are indirect tools used to control the money supply in the economy:1.Moral Suasion:
This is a tactic used by the central bank to influence and persuade banks to adhere to its policy directions.
By urging banks to restrict lending or follow specific guidelines, the central bank can help manage inflationary trends indirectly. - Question 3 of 5
3. Question
Which of the following activities are considered as a part of the primary sector?
1. Mining
2. Forestry
3. Textiles
4. Agriculture
5. BankingHow many of the above are correct?
CorrectAnswer: (b) Only three
Explanation:
Primary sector activities are directly involved in the extraction and production of natural resources.
Ex: Mining, forestry and agriculture etc.
Textile – Secondary sector
Banking – tertiary sectorIncorrectAnswer: (b) Only three
Explanation:
Primary sector activities are directly involved in the extraction and production of natural resources.
Ex: Mining, forestry and agriculture etc.
Textile – Secondary sector
Banking – tertiary sector - Question 4 of 5
4. Question
Which of the following is an example of a direct tax?
CorrectAnswer: (b) Income Tax
Explanation:
Income Tax: Direct tax on individual and business income, paid directly to the government.Goods and Services Tax (GST): An indirect tax on goods and services, collected from consumers.
Excise Duty: Indirect tax on the manufacture or production of goods.
Custom Duty: Indirect tax on imported or exported goods.IncorrectAnswer: (b) Income Tax
Explanation:
Income Tax: Direct tax on individual and business income, paid directly to the government.Goods and Services Tax (GST): An indirect tax on goods and services, collected from consumers.
Excise Duty: Indirect tax on the manufacture or production of goods.
Custom Duty: Indirect tax on imported or exported goods. - Question 5 of 5
5. Question
Consider the following statements in respect of the digital rupee:
1.It is a 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?
CorrectAnswer : (d) 1, 2 and 4
Explanation:
1.The digital rupee is officially issued by the RBI as a part of its monetary policy framework, making it a sovereign currency.2.Similar to physical currency, the digital rupee is recorded as a liability on the RBI’s balance sheet because it represents a claim on the central bank.
3.This statement is incorrect. The digital rupee, like other forms of currency, is not inherently protected from inflation.
4.The digital rupee can be exchanged freely with commercial bank money and physical cash, allowing for seamless transactions.
IncorrectAnswer : (d) 1, 2 and 4
Explanation:
1.The digital rupee is officially issued by the RBI as a part of its monetary policy framework, making it a sovereign currency.2.Similar to physical currency, the digital rupee is recorded as a liability on the RBI’s balance sheet because it represents a claim on the central bank.
3.This statement is incorrect. The digital rupee, like other forms of currency, is not inherently protected from inflation.
4.The digital rupee can be exchanged freely with commercial bank money and physical cash, allowing for seamless transactions.
