UPSC 2014 Economy Previous Year Questions

Question 1

With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure? 1. Defence expenditure 2. Interest payments 3. Salaries and pensions 4. Subsidies Select the correct answer using the code given below.

Accepted Answer

Correct Option: C. 1 only | 2 and 3 only | 1, 2, 3 and 4 | None. Under the former Plan/Non-Plan classification, defence expenditure, interest payments, salaries, pensions and subsidies were all treated as Non-Plan expenditure.

Question 2

Which of the following organizations brings out the publication known as World Economic Outlook?

Accepted Answer

Correct Option: A. The International Monetary Fund | The United Nations Development Programme | The World Economic Forum | The World Bank. World Economic Outlook is a flagship publication of the International Monetary Fund.

Question 3

In the context of food and nutritional security of India, enhancing the 'Seed Replacement Rates' of various crops helps in achieving the food production targets of the future. But what is/are the constraint/constraints in its wider/greater implementation? 1. There is no National Seeds Policy in place. 2. There is no participation of private sector seed companies in the supply of quality seeds of vegetables and planting materials of horticultural crops. 3. There is a demand-supply gap regarding quality seeds in case of low value and high volume crops. Select the correct answer using the code given below.

Accepted Answer

Correct Option: B. 1 and 2 | 3 only | 2 and 3 | None. India did have a National Seeds Policy and private seed companies participated notably in vegetable/horticulture seed supply. A key constraint was the demand-supply gap for quality seeds in low-value, high-volume crops.

Question 4

Consider the following statements: 1. Maize can be used for the production of starch. 2. Oil extracted from maize can be a feedstock for biodiesel. 3. Alcoholic beverages can be produced by using maize. Which of the statements given above is/are correct?

Accepted Answer

Correct Option: D. 1 only | 1 and 2 only | 2 and 3 only | 1, 2 and 3. Maize is used to produce starch, maize oil can be used as a biodiesel feedstock, and maize can be fermented for alcoholic beverages. All three statements are correct.

Question 5

If the interest rate is decreased in an economy, it will

Accepted Answer

Correct Option: C. decrease the consumption expenditure in the economy | increase the tax collection of the Government | increase the investment expenditure in the economy | increase the total savings in the economy. Lower interest rates reduce the cost of borrowing, making investment projects more attractive. Therefore investment expenditure tends to increase.

Question 6

In India, cluster bean (Guar) is traditionally used as a vegetable or animal feed, but recently the cultivation of this has assumed significance. Which one of the following statements is correct in this context?

Accepted Answer

Correct Option: B. The oil extracted from seeds is used in the manufacture of biodegradable plastics | The gum made from its seeds is used in the extraction of shale gas | The leaf extract of this plant has the properties of anti-histamines | It is a source of high quality biodiesel. Guar gum, made from cluster bean seeds, is used as a thickening/fracturing-fluid agent in hydraulic fracturing for shale gas extraction, which increased the crop's commercial significance.

Question 7

In the context of Indian economy, which of the following is/are the purpose/purposes of 'Statutory Reserve Requirements'? 1. To enable the Central Bank to control the amount of advances the banks can create 2. To make the people's deposits with banks safe and liquid 3. To prevent the commercial banks from making excessive profits 4. To force the banks to have sufficient vault cash to meet their day-to-day requirements Select the correct answer using the code given below.

Accepted Answer

Correct Option: A. 1 only | 1 and 2 only | 2 and 3 only | 1, 2, 3 and 4. Statutory reserve requirements such as CRR/SLR primarily help the central bank regulate banks' capacity to create credit. The other listed purposes are not the direct purpose in this context.

Question 8

What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas? 1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages. 2. It enables the beneficiaries in the rural areas to make deposits and withdrawals. Select the correct answer using the code given below.

Accepted Answer

Correct Option: C. 1 only | 2 only | Both 1 and 2 | Neither 1 nor 2. Business Correspondents provide branchless banking services, including payment of subsidies/social security benefits and basic deposits and withdrawals in villages.

Question 9

The terms 'Marginal Standing Facility Rate' and 'Net Demand and Time Liabilities', sometimes appearing in news, are used in relation to

Accepted Answer

Correct Option: A. banking operations | communication networking | military strategies | supply and demand of agricultural products. Marginal Standing Facility is an RBI liquidity facility for banks, and Net Demand and Time Liabilities is a banking aggregate used for reserve requirements. Both relate to banking operations.

Question 10

With reference to Balance of Payments, which of the following constitutes/constitute the Current Account? 1. Balance of trade 2. Foreign assets 3. Balance of invisibles 4. Special Drawing Rights Select the correct answer using the code given below.

Accepted Answer

Correct Option: C. 1 only | 2 and 3 | 1 and 3 | 1, 2 and 4. The current account includes the balance of trade and balance of invisibles such as services, transfers and income. Foreign assets and SDRs are reserve/capital-account related items, not current-account components.

UPSC 2014 Economy PYQs with Answers