IAS Questions of Economy Set- 10 for Prelims Exam

1.Which of the following statements are correct regarding SIDBI?

(1) It directly gives loans to small scale industrial units.
(2) It extends financial support to State Small Industries Development Corporations.

Codes:

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 Nor 2

Ans b
Explanation: SIDBI refinances loans and advances extended by the primary lending institutions to small scale industrial units

2.The Mineral Policy of 1993 includes

(1) Permitting foreign companies to share mineral extraction
(2) Use of foreign modern technology
(3) stress on environment protection

Codes:

(a) 1 and 2 only
(b) 3 only
(c) 1 and 3 only
(d) All of these

Ans. d

Explanation: Mineral Policy, 1993 stresses role of private sector and modern technology in using mineral resources of the country.

3. Which of the following are essential in steel industry?

(1) Coking coal
(2) Manganese
(3) Limestone
(4) Aluminium

Codes

(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) All of these

Ans. c

Explanation: Aluminium is not a key requirement in steel industries.

4. Which of the following statements are correct?

(1) Ministry of Power has taken initiative for development of Ultra Mega Power Projects (UMPP).
(2) UMPP has capacity of 4000 Megawatts or more.

Codes:

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 Nor 2

Ans. c

Explanation: Ministry of Power has started coal based UMPPs in different parts of the countries. This is aimed to bridge gap between the demand and supply of power.

5. Which of the following are the roles of RBI?

(1) Banker to the government
(2) Controller of money supply
(3) Foreign exchange management
(4) Banker’s bank

Codes

(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) All of these

Ans. d

Explanation: RBI has been given these roles so that economy of the country does not become vulnerable to external and internal factors.

6. Intellectual Property Rights (IPR) are managed and regulated by

(a) IMF
(b)  WTO
(c) European Union
(d) UNCTAD

Ans. b

Explanation: IPR are covered by TRIPS agreement of WTO.

7. Which of the following states has largest share in the total food grains produced in India?

(a) Uttar Pradesh
(b) Madhya Pradesh
(c) Punjab
(d) Tamil Nadu

Ans. a

Explanation: Uttar Pradesh is the leading state in total production of food crops in India.

8. Which of the following are used to measure inflation?

(1) Wholesale Price Index
(2) Consumer Price Index
(3) Purchasing Power Parity

Codes

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) All of these

Ans. a

Explanation: Purchasing Power Parity is not used to measure inflation.

9. Which of the following tax revenues are source of income for state governments?

(1) Estate duty in respect of property other than agricultural land
(2) Capitation taxes
(3) Land Revenue

Codes

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) All of these

Ans. b

Explanation: Estate duty in respect of property other than agricultural land comes under the Union List whereas Estate duty in respect of agricultural land comes under the State List.

10. Which of the following formula can be used to derive Primary Deficit?

(a) Revenue Expenditure - Revenue Receipts
(b) Fiscal Deficit – Interest Payment
(c) Budget Deficit ¬¬- Interest Payment
(d) Fiscal Revenue – Fiscal Expenditure

Ans. b

Explanation: Primary deficit indicates how much government borrowing is going to meet expenses other than interest payments.