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Daily Quiz: December 26
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- Question 1 of 7
1. Question
1 pointsCategory: EconomyWith reference to National Manufacturing policy, Consider the following statements
- The policy aims to increase the share of manufacturing in the country’s GDP from the current 16% to 25% by 2022.
- Policy envisages establishment of National Investment and Manufacturing Zones (NIMZ) that would be autonomous and self-regulated developed in partnership with the private sector.
- The National Manufacturing Policy aims to create 100 million additional jobs in the next decade.
Which of the above given statement(s) is/are correct?
Correct
All the above statements are correct. In order to bring about a quantitative and qualitative change and to give necessary impetus to the manufacturing sector, the Department of Industrial policy & Promotion has notified the National Manufacturing Policy (NMP) with the objective of enhancing the share of manufacturing in GDP to 25% and creating 100 million jobs over a decade or so. The policy is based on the principle of industrial growth in partnership with the States. The Central Government will create the enabling policy framework, provide incentives for infrastructure development on a Public Private Partnership (PPP) basis through appropriate financing instruments, and State Governments will be encouraged to adopt the instrumentalities provided in the policy.
More reading: http://dipp.nic.in/policies-rules-and-acts/policies/national-manufacturing-policy
Incorrect
All the above statements are correct. In order to bring about a quantitative and qualitative change and to give necessary impetus to the manufacturing sector, the Department of Industrial policy & Promotion has notified the National Manufacturing Policy (NMP) with the objective of enhancing the share of manufacturing in GDP to 25% and creating 100 million jobs over a decade or so. The policy is based on the principle of industrial growth in partnership with the States. The Central Government will create the enabling policy framework, provide incentives for infrastructure development on a Public Private Partnership (PPP) basis through appropriate financing instruments, and State Governments will be encouraged to adopt the instrumentalities provided in the policy.
More reading: http://dipp.nic.in/policies-rules-and-acts/policies/national-manufacturing-policy
- Question 2 of 7
2. Question
1 pointsCategory: EconomyWith reference to Fiscal policy, Consider the following statements
- Fiscal policy refers to the policy to control its spending levels to influence and monitor the nation’s economic growth.
- Stimulating a stagnant economy by increasing spending or lowering taxes runs the risk of causing inflation to rise.
- Fiscal policy is said to be tight or contractionary when spending is higher than revenue.
Which of the above given statement(s) is/are correct?
Correct
Statement 1 is correct. Fiscal Policy acts like a major resource which the Government utilizes to adjust its tax rates and its spending levels to influence and monitor the nation’s economic growth.
Statement 2 is correct. Stimulating a stagnant economy by increasing spending or lowering taxes runs the risk of causing inflation to rise. This is because an increase in the amount of money in the economy, followed by an increase in consumer demand, can result in a decrease in the value of money – meaning that it would take more money to buy something that has not changed in value.
Statement 3 is incorrect. Fiscal policy is said to be tight or contractionary when revenue is higher than spending (i.e., the government budget is in surplus) and loose or expansionary when spending is higher than revenue (i.e., the budget is in deficit).
Incorrect
Statement 1 is correct. Fiscal Policy acts like a major resource which the Government utilizes to adjust its tax rates and its spending levels to influence and monitor the nation’s economic growth.
Statement 2 is correct. Stimulating a stagnant economy by increasing spending or lowering taxes runs the risk of causing inflation to rise. This is because an increase in the amount of money in the economy, followed by an increase in consumer demand, can result in a decrease in the value of money – meaning that it would take more money to buy something that has not changed in value.
Statement 3 is incorrect. Fiscal policy is said to be tight or contractionary when revenue is higher than spending (i.e., the government budget is in surplus) and loose or expansionary when spending is higher than revenue (i.e., the budget is in deficit).
- Question 3 of 7
3. Question
1 pointsCategory: EconomyConsider the following statements regarding Balance of Payments
1. Balance of payments refers to an accounting record of all economic and financial transactions between a country and the rest of the world.
2. Balance of payments does not constitute country’s investment income, and unilateral transfers like remittances, gifts, grants.
3. Errors and Omissions in BoP is the balancing item reflecting our inability to record all international transactions accurately.
Which of the above given statement(s) is/are correct?
Correct
Statement 1 is correct. Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
Statement 2 is incorrect. The three main components of BoP: Current Account, Capital Account, Official Reserve Transactions
The current account includes all the transactions related to export and import of goods and services, investment income, and unilateral transfers (remittances, gifts, grants etc.). The capital account includes all international asset transactions (FDI, FPI etc.). The official reserve transactions are conducted by central banks like RBI whenever there is BoP deficit or BoP surplus. These transactions are conducted in the form of international reserve assets, such as gold and major international currencies.
Statement 3 is correct. Errors and Omissions in BoP is the balancing item reflecting our inability to record all international transactions accurately.
Incorrect
Statement 1 is correct. Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
Statement 2 is incorrect. The three main components of BoP: Current Account, Capital Account, Official Reserve Transactions
The current account includes all the transactions related to export and import of goods and services, investment income, and unilateral transfers (remittances, gifts, grants etc.). The capital account includes all international asset transactions (FDI, FPI etc.). The official reserve transactions are conducted by central banks like RBI whenever there is BoP deficit or BoP surplus. These transactions are conducted in the form of international reserve assets, such as gold and major international currencies.
Statement 3 is correct. Errors and Omissions in BoP is the balancing item reflecting our inability to record all international transactions accurately.
- Question 4 of 7
4. Question
1 pointsCategory: EconomyConsider the following statements regarding Unemployment.
1. Frictional unemployment occurs when a labour is shifting from one job to another or time period between jobs when a worker is searching job.
2. Structural unemployment occurs when the more labours are working for a same job than actual labours required.
3. Disguised unemployment occurs when the market is unable to provide jobs as there is a mismatch between skills of workers and skills required.
Which of the above given statement(s) is/are correct?
Correct
Statement 1 is correct. Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. It is sometimes called search unemployment and can be voluntarily based on the circumstances of the unemployed individual.
Statement 2 is incorrect. Structural unemployment occurs when a labour market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of workers and skills needed for jobs.
Statement 3 is incorrect. Disguised unemployment occurs when the more labours are working for a same job than actual labours required.
Incorrect
Statement 1 is correct. Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. It is sometimes called search unemployment and can be voluntarily based on the circumstances of the unemployed individual.
Statement 2 is incorrect. Structural unemployment occurs when a labour market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of workers and skills needed for jobs.
Statement 3 is incorrect. Disguised unemployment occurs when the more labours are working for a same job than actual labours required.
- Question 5 of 7
5. Question
1 pointsCategory: EconomyConsider the following statements regarding Nidhi companies.
1. The Nidhi companies borrow from and lend to the members only.
2. They are registered under Companies Act and are regulated by Ministry of Corporate Affairs as well as RBI.
Which of the above given statement(s) is/are correct?
Correct
Statement 1 is correct. The companies doing Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.
Statement 2 is correct. Nidhis are companies registered under section 620A of the Companies Act, 1956 (Section 406 of the new Companies Bill 2012, as passed by Lok Sabha) and is regulated by Ministry of Corporate Affairs (MCA). Nidhis are also included in the definition of Non- Banking Financial companies or (NBFCs) which operate mainly in the unorganized money market. Nidhi Companies are regulated by RBI also.
Incorrect
Statement 1 is correct. The companies doing Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.
Statement 2 is correct. Nidhis are companies registered under section 620A of the Companies Act, 1956 (Section 406 of the new Companies Bill 2012, as passed by Lok Sabha) and is regulated by Ministry of Corporate Affairs (MCA). Nidhis are also included in the definition of Non- Banking Financial companies or (NBFCs) which operate mainly in the unorganized money market. Nidhi Companies are regulated by RBI also.
- Question 6 of 7
6. Question
1 pointsCategory: EconomyWith reference to Small Banks and Payment Banks, consider the following statements
1. Both can accept deposits and issue debit cards.
2. Only small banks are required to maintain CRR and not payment banks.
3. Small Banks have to maintain SLR and Priority Sector Lending requirements
Which of the above given statement(s) is/are correct?
Correct
Statement 1 is correct. Both can accept deposits and issue debit cards. Payment Banks cannot issue credit cards.
Statement 2 is incorrect. Both have to maintain the maintain CRR requirements.
Statement 3 is correct. Small Banks have to maintain SLR and PSL requirements as well.
Incorrect
Statement 1 is correct. Both can accept deposits and issue debit cards. Payment Banks cannot issue credit cards.
Statement 2 is incorrect. Both have to maintain the maintain CRR requirements.
Statement 3 is correct. Small Banks have to maintain SLR and PSL requirements as well.
- Question 7 of 7
7. Question
1 pointsCategory: EconomyConsider the following statements:
1. Fiscal deficit indicates the total borrowing requirements of Government from all sources.
2. Effective Revenue deficit refers to the excess of revenue expenditure over revenue receipts.
3. Primary Deficit is the difference between fiscal deficit and revenue expenditure.
Which of the above given statement(s) is/are correct?
Correct
Statement 1 is correct. Fiscal deficit is the difference between the Revenue receipts plus Non-debt Capital Receipts (NDCR) and the total expenditure. This indicates the total borrowing requirements of Government from all sources.
Statement 2 is incorrect. Revenue deficit refers to the excess of revenue expenditure over revenue receipts. Effective revenue deficit is the difference between revenue deficit and grants for creation of capital assets.
Statement 3 is incorrect. Primary deficit is measured by fiscal deficit less interest payments. It helps in assessing the progress of the government in its fiscal control efforts.
Incorrect
Statement 1 is correct. Fiscal deficit is the difference between the Revenue receipts plus Non-debt Capital Receipts (NDCR) and the total expenditure. This indicates the total borrowing requirements of Government from all sources.
Statement 2 is incorrect. Revenue deficit refers to the excess of revenue expenditure over revenue receipts. Effective revenue deficit is the difference between revenue deficit and grants for creation of capital assets.
Statement 3 is incorrect. Primary deficit is measured by fiscal deficit less interest payments. It helps in assessing the progress of the government in its fiscal control efforts.
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