UPSC: Economics subject can prove to be easy for some UPSC aspirants while daunting to others. The type of questions asked in the UPSC Civil Services Prelims exam is based on the conceptual understanding of economics. No matter how many times aspirants read and mug-up the data, they are bound to falter in the exam. Conceptual clarity is important to easily solve the Economics questions in exams. By this time we assume you know what to read and refer to for this subject. Since this is your last leg of your prelims preparation, we have prepared some guiding points for the aspirants to focus on during the revision.
The questions asked in UPSC Prelims from the economy section are usually based on three concepts:
- Core Economics
- Applied Economics
- Current Affairs
Let’s focus on each point in details;
Ques: The money multiplier in an economy increases with which one of the following?
(a) Increase in the cash reserve ratio
(b) Increase in the banking habit of the population
(c) Increase in the statutory liquidity ratio
(d) Increase in the population of the country
Questions based on the basic concepts and core of the economics are covered in this section. Aspirants should follow the below-given points while revising the Core Economics Topic.
- UPSC often have asked questions based on very basic terminologies from core economics. So it is well advised to go through all the basic definitions in Micro and Macroeconomics terminologies example fiscal stimulus, Haircut, Round Tripping, etc.
- Go through the current fiscal budget and economic surveys to learn core concepts, definitions, and terminologies.
- Get a good understanding of key concepts like GDP vs GNP vs NNP. Use of GDP deflator, types of inflation, types of demand (elastic vs inelastic). Questions from this part can be clubbed with application-based economics.
- Major bodies controlling trade like the Department of Industry and Internal Trade, WTO, etc.
Ques: Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of the Indian rupee?
(a) Curbing imports of non-essential goods-and promoting exports
(b) Encouraging Indian borrowers to issue rupee-denominated Masala Bonds
(c) Easing conditions relating to external commercial borrowing
(d) Following an expansionary monetary policy
Maximum questions appear from this section of economics and tend to be the most confusing one. Thus the best way to crack such questions is to relate it to current affairs and newspaper reading and check each option by applying core economic concepts.
The simple strategy to get these questions right is to get hold of core concepts and apply them in real-time. Newspapers often link and apply these concepts. Example- the Venezuela crisis and Sanctions on Iran led to a rise in Oil price having a direct impact on the Inflation rate. Forecasting increased inflation RBI MPC did not change the Repo rate to curb inflation etc.
The current affairs part is seemingly easy as the nature of the question is direct and factual. However, it is usually tricky to find one source for all the economics current affairs. As per the recent trends, there are few sub-sections which are being covered from the current affairs perspective in the UPSC paper.
Reports and Indexes- Ease of doing business, Global Gender Gap etc.
Schemes - Various schemes launched by the Union Government in Budget
International Bodies - At least 1-2 questions are asked from this topic especially with respect to WTO, IMF, and World Bank.
Agriculture- A lot questions from agriculture, particularly from the economic survey have asked in the prelims exam.
Try to revise as many times as possible and take the regular test to expose yourself with a wide variety of questions from economics. Taking more tests will help you to identify you’re not so strong areas so that you can sharpen your mind for the exam day.