Economics

Economics and Current Affairs
1. Growth trend in Indian economy has shown noticeable improvement because of

1. Decline in oil prices.
2. Monetary easing.
3. Policy support from government.
4. Lowering of unemployment rate.
5. Strengthening of business sentiments.

Select the correct code

1. 1, 2, 3 only
2. 2 only
3. 1,2,3,5 only
4. All of the above

Solution: 3

Explanation:

Decline in oil prices helps in decreasing the input cost and also moderates the inflation rate.

Monetary easing enhance money supply in the market. Policy support has always been an important factor to put a country on high growth trajectory. Government’s pro-business steps establishes an enabling environment for business and build business sentiments among investors. As a result. Growth shows positive trend.

2. Low level of private investment is a result of

1. Poor and inadequate banking system
2. Deficiencies of public private partnership (PPP) model in infrastructure.
3. Tight monetary policy.
4. Rationalization of subsidies.

Select the correct code

1. 1, 2 only
2. 2 only
3. 1, 2, 3 only
4. All of the above

Solution: 3

Explanation: Rationalization of subsidies will enhance private investment

3. A decline in the employment elasticity of growth can result into

1. Disruption of projected growth targets in India.
2. More competition among youths
3. Sustainable and inclusive India.

Select the correct code

1. 1 only
2. 2 only
3. 2, 3 only
4. All of the above

Solution: 3

Explanation: A decline in employment elasticity of growth means a given amount of growth leads to fewer jobs created than in the past. So it is independent of growth envisaged.

4. Consider the statements:

1. Revenue-to-GDP ratio (for the general government) in India is more as compare to emerging Asian economies.
2. India’s overall revenue (for the general government) is approximately one-fifth of GDP.

Select the correct code

1. 1, only
2. 2 only
3. Both 1 and 
4. None

Solution: 2

Explanation: 

Revenue-to-GDP ratio (for the general government) in India is less as compare to emerging Asian economies and it is estimated around 19.5% by IMF.

'Tax-To-GDP Ratio' -  The ratio of tax collection against the national gross domestic product (GDP).

5. Moderation in oil prices is result of

1. Weak global demand.
2. Increase in supply
3. global monetary and liquidity environment
4. Sanctions imposed on Russia over Ukraine issue.

Select the correct code

1. 1, 2 only
2. 2 only
3. 1, 2, 3, only
4. All of the above

Solution: 4

Explanation: Tradition markets like china and Europe are not showing hunger for oil as current dip in demand in international market and in USA increase in oil and shale gas production supplies get enhanced.

6. Low rural wage growth in India leads to

1. Lowering of inflation rate.
2. Further monetary policy easing
3. Financial repression on liability side in banking sector

Select the correct code

1. 1, 2 only
2. 2 only
3. 2, 3 only
4. All of the above

Solution: 1

Explanation: Low rural wage growth has been pointed as one of the reason behind moderation in inflation. Lower inflation sets a ground for monetary easing.

7. High minimum support for rice and wheat results into

1. Monoculture
2. Environmental concerns.
3. Induce greater price volatility in non-MSP supported crops.
4. Enhance nutrition availability to poor in general.

Select the correct code

1. 1, 2, only
2. 2 only
3. 1, 2, 3 only
4. All of the above

Solution: 3

Explanation:High minimum support for rice and wheat entail farmers to grow these high fetching crops. These crops are water intensive so problem of lowering ground water table has been quite conspicuous. 

These crops are so popular that they are being grown over the areas where traditionally coarse grain crops were cultivated. Coarse grains have high nutrition level.

8. Consider the statements:

1. The profits generated by freight services have cross-subsidized passengers services.
2. Indian freight rates are deliberately kept low to attract freight traffic from road sector.

Select the correct code

1. 1, only
2. 2 only
3. Both1 and 2
4. None

Solution: 1

Explanation:One of the reasons for high freight rate in India is profits generated by freight services have crosssubsidized passengers services.

10. Consider the statements

1. 1. Public sector banks perform well above private sector banks on average even though they are burdened with social obligation.
2. Private sector banks have level of professionalism, management skills and better incentives for Employees as compare to public sector banks

Select the correct code

1. 1, only
2. 2 only
3. Both I and 2
4. None

Solution: 2

Explanation:Public sector banks perform well below private sector banks on average. 

11. Gender inequality index is a composite measure reflecting inequality in achievement between men and women in three dimensions and that are:

1. Life expectancy.
2. Labor market.
3. Gross enrollment at primary level.

Select the correct code

1. 1, only
2. 1, 2 only
3. 2 only
4. None

Solution: 3

Explanation:

Gender inequality index is a composite measure reflecting inequality in achievement between men and women in three dimensions that are reproductive health, Empowerment and the labor market. 

12. In quest for greater commitment to climatic change initiative, Indian government has taken a

slew of steps that includes:

1. Shifts from a carbon subsidization regime to carbon taxation regime.
2. Focus on increasing share of hydro-electricity by installing micro-turbine along the perennial rivers.
3. Increased the coal cess fromRs. 50 per ton to Rs. 75.
4. Panchayats are advised to meet 5% of energy demand by biogas production in their area to curb emission from burning cow-dung cakes and wood in rural households.

Select the correct code

1. 1 only
2. 1, 3 only
3. 1, 2, 3 only
4. All of the above.

Solution: 1

Explanation:Coal cess has increased from Rs. 50 to Rs.100, statement 2 and 4 are not at all related to question. India has taken substantial action to eliminate petroleum subsidies and gone beyond to impose substantial taxes on these products

13. A GM or transgenic crop is a plant that has a novel combination of genetic material obtained

through the use of modern biotechnology. Consider the following regarding GM crops

1. India has the third largest area planted under genetically modified (GM) crops after US and Brazil.
2. The first generation of GM crops resulted into increased nutritional and/or industrial traits.
3. The second generation GM crops will feature increased nutritional and/or industrial traits like Rice enriched with iron, vitamin A and E, and lysine and Potatoes with higher starch content, and inulin

Select the correct code

1. 1 and 2
2. 2 and 3
3. Only 1
4. Only 3

Solution- 4

Explanation -

India has the fourth largest area planted under genetically modified (GM) crops, according to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA) .In the developed world, there is clear evidence that the use of GM crops has resulted in significant benefits. These include:

1. Higher crop yields

2. Reduced farm costs

3. Increased farm profit

4. Improvement in health and the environment

These “first generation” crops have proven their ability to lower farm-level production costs.

Now, research is focused on “second-generation” GM crops that will feature increased nutritional and/or industrial traits. These crops will have more direct benefits to consumers. Examples include:

1. Rice enriched with iron, vitamin A and E, and lysine

2. Potatoes with higher starch content, and insulin

3. Edible vaccines in maize, banana and potatoes

4. Maize varieties with low phytic acid and increased essential amino acids

5. Healthier oils from soybean and canola

6. Allergen-free nuts

14. Recently India has successfully launched a ‘Canister-Based’ nuclear capable AGNI-V missile.

Consider the following regarding this

1. An advantage of canister based system is, it can be used for the launch of any missile irrespective of its size.
2. AGNI-V is the first missile to be tested on Canister based launch system.

Select the correct code-

1. Only 1
2. Only 2
3. Both
4. None

Solution- 4

Explanation- A canister for a missile serves a duel function which provides an environmental container and a launching tube. A canister launch system can be either hot launch, where the missile ignites in the cell, or cold launch, where the missile is expelled by gas produced by a gas generator which is not part of the missile itself, and then the missile ignites. In case of hot launches the problem is the heat

produced by the missile at the time of launch. The hot launch is better for small missiles as the ejection part itself will be done by using missiles own engine.

So it depends on the size of missile – the feasibility of the system utilized for the ejection.

The Shaurya missile is a canister launched hypersonic surface-to-surface tactical missile developed by the Indian Defence Research and Development Organisation (DRDO) for use by the Indian Armed Forces.

15. Consider the following statements with reference to Multiple Independently targetable Reentry Vehincle (MIRV)

1. India possesses MIRV technology along with Russia, USA China, France and Brazil.
2. It is a ballistic missile payload containing several warheads, each capable of being aimed to hit one of a group of targets.

Select the correct code-

1. Only 1
2. Only 2
3. Both
4. None

Solution- 2

Explanation- India is working on the development of MIRV technology. But right now there is no fully tested version of MIRV in any of Indian missiles. Only France, China, US, Russia and Brazil possesses this technology.