UPSC 2024 Economy Previous Year Questions

Question 1

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?

Accepted Answer

Correct Option: D. 1 and 2 only | 1 and 3 only | 2 and 4 only | 1, 2 and 4. The digital rupee is RBI-issued sovereign currency, appears as RBI liability, and is convertible with bank money/cash. It is not inflation-insured by design.

Question 2

Consider the following statements: Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment. Statement-II: The USA Government debt is not backed by any hard assets, but only by the faith of the Government. Which one of the following is correct in respect of the above statements?

Accepted Answer

Correct Option: A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I | Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I | Statement-I is correct, but Statement-II is incorrect | Statement-I is incorrect, but Statement-II is correct. If the USA defaults, bondholders cannot effectively receive due payments. US Treasury debt is backed by the full faith and credit of the government rather than specific hard assets, explain

Question 3

With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements: 1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities. 2. CSR rules do not specify minimum spending on CSR activities. Which of the statements given above is/are correct?

Accepted Answer

Correct Option: A. 1 only | 2 only | Both 1 and 2 | Neither 1 nor 2. CSR spending that directly benefits the company or its employees is excluded. CSR law/rules specify a spending obligation of at least 2% of average net profits for qualifying companies, so statement 2 is incorrect.

Question 4

With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements: 1. There is no minimum capital requirement for wholly owned banking subsidiaries in India. 2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals. Which of the statements given above is/are correct?

Accepted Answer

Correct Option: D. 1 only | 2 only | Both 1 and 2 | Neither 1 nor 2. Wholly owned subsidiaries of foreign banks do have minimum capital requirements, and the board-nationality requirement is not correctly stated as at least 50% Indian nationals. Hence neither statement is correct.

Question 5

Which one of the following words/phrases is most appropriately used to denote "an interoperable network of 3D virtual worlds that can be accessed simultaneously by millions of users, who can exert property rights over virtual items"?

Accepted Answer

Correct Option: C. Big data analytics | Cryptography | Metaverse | Virtual matrix. An interoperable network of 3D virtual worlds with virtual property rights is the metaverse.

Question 6

With reference to physical capital in Indian economy, consider the following pairs: Items - Category: 1. Farmer's plough - Working capital 2. Computer - Fixed capital 3. Yarn used by the weaver - Fixed capital 4. Petrol - Working capital How many of the above pairs are correctly matched?

Accepted Answer

Correct Option: B. Only one | Only two | Only three | All four. A computer is fixed capital and petrol is working capital. A plough is fixed capital and yarn is working capital, so two pairs are correct.

Question 7

Consider the following materials: 1. Agricultural residues 2. Corn grain 3. Wastewater treatment sludge 4. Wood mill waste Which of the above can be used as feedstock for producing Sustainable Aviation Fuel?

Accepted Answer

Correct Option: C. 1 and 2 only | 3 and 4 only | 1, 2, 3 and 4 | 1, 3 and 4 only. Sustainable aviation fuel can be produced from agricultural residues, corn grain, wastewater-treatment sludge and wood mill waste depending on pathway and technology.

Question 8

With reference to the sectors of the Indian economy, consider the following pairs: Economic activity - Sector: 1. Storage of agricultural produce - Secondary 2. Dairy farm - Primary 3. Mineral exploration - Tertiary 4. Weaving cloth - Secondary How many of the pairs given above are correctly matched?

Accepted Answer

Correct Option: B. Only one | Only two | Only three | All four. Dairy farming is primary and weaving cloth is secondary. Storage is tertiary and mineral exploration is primary, so two pairs are correct.

Question 9

Consider the following: 1. Exchange-Traded Funds (ETF) 2. Motor vehicles 3. Currency swap Which of the above is/are considered financial instruments?

Accepted Answer

Correct Option: D. 1 only | 2 and 3 only | 1, 2 and 3 | 1 and 3 only. ETFs and currency swaps are financial instruments. Motor vehicles are physical assets, not financial instruments.

Question 10

In India, which of the following can trade in Corporate Bonds and Government Securities?

1. Insurance Companies
2. Pension Funds
3. Retail Investors

Select the correct answer using the code given below:

Accepted Answer

Correct Option: D. 1 and 2 only | 2 and 3 only | 1 and 3 only | 1, 2 and 3. Insurance companies, pension funds and retail investors can trade/invest in corporate bonds and government securities through permitted market channels.

UPSC 2024 Economy PYQs with Answers