Indian Economy

With reference to the Indian 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. IIBs provide protection to the investors from uncertainty regarding inflation. 3. The interest received as well as capital gains on IIBs are not taxable. Which of the statements given above are correct ?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

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 :

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

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 :

1. (a)1 and 2 only
2. (b)2, 3 and 4 only
3. (c)1, 3 and 4 only
4. (d)1, 2, 3 and 4

Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with reference to India ?

1. (a)An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment
2. (b)A foreign company investing in India and paying taxes to the country of its base on the profits arising out of its investment
3. (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
4. (d)A foreign company transfers shares and such shares derive their substantial value from assets located in India

With reference to the expenditure made by an organisation 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 :

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

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 ?

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

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 ?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

No answer is recorded for this question: cancelled by UPSC — marks awarded to all candidates

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 ?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

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 :

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

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 ?

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

In India, which one of the following is responsible for maintaining price stability by controlling inflation ?

1. (a)Department of Consumer Affairs
2. (b)Expenditure Management Commission
3. (c)Financial Stability and Development Council
4. (d)Reserve Bank of India

In India, which one of the following compiles information on industrial disputes, closures, retrenchments and lay-offs in factories employing workers ?

1. (a)Central Statistics Office
2. (b)Department for Promotion of Industry and Internal Trade
3. (c)Labour Bureau
4. (d)National Technical Manpower Information System

In India, what is the role of the Coal Controller's Organization (CCO) ? 1. CCO is the major source of Coal Statistics in Government of India. 2. It monitors progress of development of Captive Coal/Lignite blocks. 3. It hears any objection to the Government's notification relating to acquisition of coal-bearing areas. 4. It ensures that coal mining companies deliver the coal to end users in the prescribed time. Select the correct answer using the code given below :

1. (a)1, 2 and 3
2. (b)3 and 4 only
3. (c)1 and 2 only
4. (d)1, 2 and 4

With reference to the “Tea Board” in India, consider the following statements : 1. The Tea Board is a statutory body. 2. It is a regulatory body attached to the Ministry of Agriculture and Farmers Welfare. 3. The Tea Board's Head Office is situated in Bengaluru. 4. The Board has overseas offices at Dubai and Moscow. Which of the statements given above are correct ?

1. (a)1 and 3
2. (b)2 and 4
3. (c)3 and 4
4. (d)1 and 4

Consider the following statements : 1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government. 2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest. 3. The Governor of the RBI draws his power from the RBI Act. Which of the above statements are correct?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

With reference to casual workers employed in India, consider the following statements : 1. All casual workers are entitled for Employees Provident Fund coverage. 2. All casual workers are entitled for regular working hours and overtime payment. 3. The government can by a notification specify that an establishment or industry shall pay wages only through its bank account. Which of the above statements are correct?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

Which among the following steps is most likely to be taken at the time of an economic recession?

1. (a)Cut in tax rates accompanied by increase in interest rate
2. (b)Increase in expenditure on public projects
3. (c)Increase in tax rates accompanied by reduction of interest rate
4. (d)Reduction of expenditure on public projects

Consider the following statements : Other things remaining unchanged, market demand for a good might increase if 1. price of its substitute increases 2. price of its complement increases 3. the good is an inferior good and income of the consumers increases 4. its price falls Which of the above statements are correct?

1. (a)1 and 4 only
2. (b)2, 3 and 4
3. (c)1, 3 and 4
4. (d)1, 2 and 3

With reference to ‘Urban Cooperative Banks’ in India, consider the following statements : 1. They are supervised and regulated by local boards set up by the State Governments. 2. They can issue equity shares and preference shares. 3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966. Which of the statements given above is/are correct?

1. (a)1 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

Indian Government Bond Yields are influenced by which of the following? 1. Actions of the United States Federal Reserve 2. Actions of the Reserve Bank of India 3. Inflation and short-term interest rates Select the correct answer using the code given below.

1. (a)1 and 2 only
2. (b)2 only
3. (c)3 only
4. (d)1, 2 and 3

Consider the following : 1. Foreign currency convertible bonds 2. Foreign institutional investment with certain conditions 3. Global depository receipts 4. Non-resident external deposits Which of the above can be included in Foreign Direct Investments?

1. (a)1, 2 and 3
2. (b)3 only
3. (c)2 and 4
4. (d)1 and 4

Consider the following statements : The effect of devaluation of a currency is that it necessarily 1. improves the competitiveness of the domestic exports in the foreign markets 2. increases the foreign value of domestic currency 3. improves the trade balance Which of the above statements is/are correct?

1. (a)1 only
2. (b)1 and 2
3. (c)3 only
4. (d)2 and 3

Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?

1. (a)Diversion of resources to the purchase of real estate and investment in luxury housing
2. (b)Investment in unproductive activities and purchase of precious stones, jewellery, gold, etc.
3. (c)Large donations to political parties and growth of regionalism
4. (d)Loss of revenue to the State Exchequer due to tax evasion

Which one of the following is likely to be the most inflationary in its effects?

1. (a)Repayment of public debt
2. (b)Borrowing from the public to finance a budget deficit
3. (c)Borrowing from the banks to finance a budget deficit
4. (d)Creation of new money to finance a budget deficit

The money multiplier in an economy increases with which one of the following?

1. (a)Increase in the Cash Reserve Ratio in the banks
2. (b)Increase in the Statutory Liquidity Ratio in the banks
3. (c)Increase in the banking habit of the people
4. (d)Increase in the population of the country