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External Sector — UPSC Prelims Economy previous year questions — page 2

97 solved previous year questions on External Sector, papers from 1992 to 2021, drawn from State PCS, UPPCS, UPSC CSE Prelims. Each carries the printed answer key and the explanation from the source compilation.

1. #41State PCS 2004
   The beneficiary states of the Sardar Project are
   • AGujarat, Maharashtra. M.P. and Rajasthan
   • BAndhra Pradesh, M.P., Gujarat and Maharashtra
   • COr issa, M.P., Gujarat and Maharashtra
   • DM.P., Gujarat, Karnataka and Maharashtra
   Answer: (A) Gujarat, Maharashtra. M.P. and Rajasthan
   Explanation

   Option a is the correct Sardar Sarovar Project is an inter-state project will be shared between the four states of Pradesh, Maharashtra and Rajasthan. The building a concrete gravity dam on the near Vadgam in Gujarat. The project will drinking water supply, power generation protection to the beneficiary states Important Tips About Narmada Bachao Andolan: Narmada Bachao Andolan is a social movement that started in 1985 to oppose the construction of large dams on the Narmada River, which flows through the states of Gujarat, Madhya Pradesh and Maharashtra in India. The movement is led by native tribals, farmers environmentalists and human rights activists who are concerned about the displacement, ecological damage and social injustice caused by the dam projects Some of the major dam projects that are opposed by the Narmada Bachao Andolan are Sardar Sarovar Dam in Gujarat, Narmada Sagar Dam

2. #42State PCS 2004
   The largest pulses producing state in India
   • AAndhra Pradesh
   • BBihar
   • CMadhya Pradesh
   • DRajasthan
   Answer: (D) Rajasthan
   Explanation

   Option dis the correct the financial year 2022 Rajasthan was the largest pulses at around of the total production. Madhya Pradesh was the largest producer of pulses. Important Tips Pulses are the edible seeds of plants in the legume family. Pulses grow in pods and come in a variety of shapes, sizes and colors The United Nations Food and Agriculture Organization (FAO) recognizes 11 types of pulses: dry beans, dry broad beans, dry peas, chickpeas, cow peas, pigeon peas, lentils, Bambara beans, vetches, lupins and pulses nes. Pulses are healthy, nutritious and easy to cook with. Growing pulses also promotes sustainable agriculture, as pulse crops help decrease greenhouse gases, increase soil health, and use less water than other crops

3. #43State PCS 1998
   The oldest power plant in India is
   • AKhopoli
   • BPaikara
   • CMettur
   • DSidrapong UH. Mangalam. Project is located in
   Answer: (D) Sidrapong UH. Mangalam. Project is located in
   Explanation

   Option d is the correct Hyd ro elec tric Power Station, lo cated at of Arya Tea Estate in Darjeeling, West Bengal, oldest hydel power station or hydroelectric power India. It was commissioned on 10 November 1897 an original capacity of 2 x 65 kW. It has been heritage statu s by the central government. Important Tips Khopoii is a hydroelectric power plant in Maharashtra that was commissioned in 1915 and has a capacity of 72 MW. Paikara is a hydroelectric power plant in Tamil Nadu that was commissioned in 1932 and h as a capacity of 16 MW. Mettur is a hydroelectric power plant in Tamil Nadu that was commissioned in 1934 and has a capacity of 240 MW

4. #44State PCS 1992
   Water dispute between Tamil Nadu and Karnataka is related to
   • AKrishna
   • BCauvery
   • CGodavari
   • DMahana di i ]
   Answer: (B) Cauvery
   Explanation

   Option bis the correct water dispute between Tamil Nadu and Karnataka to Cauvery River. The sharing of waters of has been the source of a serious the two Indian states of Tamil Nadu and Karn genesis of this conflict rests in two agreements in 1924 between the Madras Presidency and Kingdom Important Tips The main issue is how to allo cate the water of the Cauvery River among the four states that depend on it: Tamil Nadu, Karnataka, Kerala and Puducherry. In 1990, the Government of India constituted a tribunal to adjudicate the dispute. After hearing arguments from all the parties for 16 years, the tribunal delivered its final verdict in 2007. However, none of the states were satisfied with the verdict and filed review petitions seeking clarifications and modifications. In 2018, the Supreme Court of India pronounced its judgment on the appeals filed by the states. The court upheld the trib

5. #45State PCS 2010
   Which one of the following is incorrectly matched?
   • AMahi Bajaj Sagar Project - Gujarat and Rajasthan
   • BChambal Project - Rajasthan, Punjab and Haryana
   • CBeas Project - Rajasthan, Punjab and Haryana
   • DIndira Gandhi Canal Project Rajasthan and Punjab
   Answer: (B) Chambal Project - Rajasthan, Punjab and Haryana
   Explanation

   Option b is the correct Chambal Project is a joint venture of Rajasthan Pradesh, not Punjab and Haryana. The to utilize the water resources of the Chambal River power generation, soil conservation and of the region. The project consists of dams: Gandhi Sagar Dam in Madhya Pradesh, Rana Sagar Dam and Jawahar Sagar Dam in project also includes the Kota Barrage and a canals that irrigate about 1.4 million hectares of land and Madhya Pradesh. Important Tips Mahi Bajaj Sagar Project: This project is an inter-state multipurpose project of the Govt. of Gujarat and Union Territory of Dadra and Nagar Haveli and Daman and Diu (DNHDD). It involves the construction of a dam across the Mahi River near Madhuban village in Valsad district of Gujarat. Beas Project: This project comprises the construction of a diversion dam at Pandoh in Mandi district of Himachal Pradesh, a water conductor system consist

6. #46State PCS 2007
   The Corrntruction of the Indira Gandhi Canal started in the year 1958 has its origin from
   • ABhakra Dam on Sutluj river
   • BRihand Valley Project on Rihand river
   • CHirakund Project on Mahanadi
   • DHarike Dam on Satluj river
   Answer: (D) Harike Dam on Satluj river
   Explanation

   Option d is the correct construction of the Indira Gandhi Canal 1958, originating from the Harike Barrage near at the confluence of the Satluj and Beas rivers. spans through Punjab, Haryana, and Rajasthan, total length of 650 kilometers. It was formerly known Rajasthan Canal and was renamed after Prime Gandhi. The canal plays a crucial role in irrigating of Rajas than, facilitating agricultural development. Important Tips Rihand Dam, or Govind Ballabh Pant Sagar, ranks as India's second-largest dam after Madhya Pradesh's Indira Sagar. Located in Uttar Pradesh's Sonbhadra District, it's a concrete gravity structure. Its reservoir, Govind Ballabh Pant Sagar, creates India's biggest artificial lake, spanning Madhya Pradesh and Uttar Pradesh. The Rihand River, a Son River tributary, nourishes the dam, serving areas in Uttar Pradesh, Madhya Pradesh, Chhattisgarh, and Bihar. Hirakud Dam, spann

7. #47State PCS 1996
   In which of the following Indian state cultivation of Coffee, rubber and tobacco is done?
   • AKarnataka
   • BMeghalaya
   • CGoa
   • DMaharashtra
   Answer: (A) Karnataka
   Explanation

   Option a is the correct Karnataka, cultivation of Coffee, rubber and tobacco Karnataka produces more than of the total in the country. Around 75 percent of the in Karnataka comes from Mysuru and The rubber is also grown in Karnataka in such as Dakshina Kannada, Shivamogga, etc Important Tips Tobacco: India is the 2nd largest producer and exporter of Tobacco after China and Brazil respectively. In the global scenario, Indian tobacco accounts for of the area and of the total production. Tobacco is one of the most economically significant agricultural crops in the world. It is a drought tolerant, hardy and short duration crop which can be grown on soils where other crops cannot be cultivated profitably. Tobacco farming keeps wild and domestic animals away because of the bitter taste of the leaf. Damage to the crop from grazing animals is minimal compared to other crops

8. #48State PCS 1992
   Which of the following Hydro projects has been built by India co-operation with Bhutan?
   • ADulhasti Dam
   • BLoktak Dam P
   • CChukha Dam
   • DBeyas-Siyul Dam
   Answer: (C) Chukha Dam
   Explanation

   Option c is the correct Dam hydro project has been built by India in with Bhutan. According to the Royal in New Delhi, the 336 MW Chukha (CHP) was fully funded by the Government with 60 percent grant and 40 percent loan at rate of 5 percent payable over a period of 15 commissioning. It was inaugurated by the then R.Venketaraman in 1987 and is considered development in the history of Inda-Bhutan hydro Important Tips Dulhasti Dam is a hydro project built by India on the Chenab River in Jammu and Kashmir. Loktak Dam is a hydro project built by India on the Loktak Lake in Manipur. Beyas-Siyul Dam is a hydro project built by India on the Beyas and Siyul rivers in Himachal Pradesh

9. #49UPSC CAPF 2016
   Arrange the following varieties of silk in India in their of decreasing production. 1. Muga 2. Eri 3. Mulberry 4, TasarSelect the correct answer using the code given below
   • A3-2-4-1
   • B3-4-2-1
   • C2-4 --1-3
   • D2-1-4-3
   Answer: (A) 3-2-4-1
   Explanation

   Option a is the correct production of silk in India is dominated by which accounts for about of the total silk is the second most produced variety, followed silk and muga silk. Important Tips Mulberry silk: Derived from the silkworm Bombyx mori it feeds on mulberry leaves and contributes to about of the India's silk production Produced in Karnataka, Andhra Pradesh, Tamil Nadu, West Bengal, and Gujarat. Eri silk: Comes from the caterpillar of Samia cynthia ricini, found in northeast India, particularly in tribal areas of Assam. Tasar silk: Produced from larvae of various silkworm species belonging to the genus Antheraea. Main production areas include Madhya Pradesh, Jharkhand, Chhattisgarh, Bihar, West Bengal, and Assam. Muga silk: Known for its durability and natural yellowish -golden tint with a glossy texture, it is widely found in Assam

10. #50UPSC CAPF 2015
    Regm." soil is most suitable for the cultivation of
    • AGroundnut
    • BCotton
    • CTobacco
    • DSugarcane
    Answer: (B) Cotton
    Explanation

    Option b is the correct soil, also known as black soil or black cotton a type of soil that is rich in clay and organic matter. It highly fertile and retains moisture well, making it the cultivation of cotton. Cotton plants thrive in properties of regur soil, which their growth and development. Important Tips Regur soil, also known as black soil, is found on the plateaus of Maharashtra, Saurashtra, Malwa, and southern Madhya Pradesh. It extends eastwards in the southern regions, along the valleys of the Godavari River and Krishna River

11. #51Practice set
    In this market, there exist few sellers having large market shares. The firms are producing homogcnous or differentiated products. Firms under this market are interdependent and fall in price of one firm affects the profits of all firms in the industry. The above paragraph best describes which of the following markets?
    • APerfect competition
    • BMonopoly
    • CMonopolistic competition
    • DOligopoly
    Answer: (D) Oligopoly
    Explanation

    Option dis the correct refers to a market situation in which there are firms selling homogeneous or differentiated India, markets for automobiles, cement, steel, are the examples of oligopolistic market. Important Tips Features of Oligopolistic Market: Each firm produces a significant portion of the total output. There exists severe competition among different firms and each firm try to both prices and volume of production to each other. Firms under oligopoly are interdependent. A firm considers the action and reaction of the rival firms while determining its price and output levels. There are barriers to entry in oligopoly market. Patents, requirement of large capital, control over crucial raw materials, etc., are some of the reasons, which prevent new firms from entering into industry

12. #52Practice set
    Which of the following statements regarding the Price Elasticity of Demand is correct?
    • AIt is the maximum amount a consumer is willing to pay for an additional unit of a product
    • BIt is the amount of change in demand of a good due to change in its price
    • CIt is the change in the demand of a good due to change in purchasing power of the consumer
    • DIt is the practice of setting the price of a product equal to the extra cost of producing an extra unil. Practiceb o o k
    Answer: (B) It is the amount of change in demand of a good due to change in its price
    Explanation

    Option bis the correct elasticity measures how much the supply or demand product changes based on a given change in b is correct: Price elasticity of Demand much the demand of a product changes based on change in price. Generally, the demand for goods easily is very volatile with respect lu small increase in the price of such goods (termed as reduces their demand and vice versa. Important Tips Marginal Benefit: The maximum amount a consumer is willing to pay for an additional unit of a product is referred to as the Marginal Benefit. It is the measure of how the cost or value of a product changes. Companies need to take both concepts into consideration when manufacturing, pricing, and marketing a product. Income Effect: The change in demand for a good or service caused by a change in a consumer's purchasing power resulting from a change in real income is termed as Income Effect. Marginal

13. #53Practice set
    The concept of 'Invisible hand' in relation to an economy entails which of the following?
    • AAn unobservable market force that helps the demand and supply of goods to reach equilibrium automatically
    • BUnregistered firms in a market which destabilise the market equilibrium by their distortive price policies
    • CInvisible role of Government in controlling the production of goods to maintain the market equilibrium
    • DDistortions in the demand-supply curve in a market due to hoarding and black marketing of goods
    Answer: (A) An unobservable market force that helps the demand and supply of goods to reach equilibrium automatically
    Explanation

    Option a is the correct Invisible Hand is a metaphor for the that move the free market economy, where self interested individuals operate through a system of The unobservable market force that. helps and supply of goods in a free market to automatically is the invisible Important Tips The phrase invisible hand was introduced by Adam Smith in his book 'The Wealth of Nations'. He assumed that an economy can work well in a free-market scenario where everyone will work for his/her own interest. In a free-market scenario where there are no regulations or restrictions imposed by the government, if someone charges less, the customer will buy from him. Therefore, you have to lower your price or offer something better than your competitor. Whenever enough people demand something, it will be supplied by the market and everyone will be happy

14. #54Practice set
    With reference to the mixed economy model, which of the following statements is/are correct? 1. The government and the private sector participate in equal measure in the economy. 2. India had adopted a mixed economic model at the time of independence.Select the correct answer using the code given below
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (B) 2 only
    Explanation

    Option b is the correct l is incorrect: Mixed economic model of both government and private sector in processes, but not necessarily in equal specific state-market mix depends on political conditions of an 2 is correct: In India, after independence, and important infrastructural economic taken up by the state and rest of the economic left to private enterprises

15. #55Practice set
    Which of the following factors were responsible for high growth of services sector in India after economic reforms of 1991? 1. Availability of cheap and skilled manpower 2. High tariffs and tight control over imports. 3. Devaluation of rupee against foreign currencies. 4. High demand for services in foreign marketsSelect the correct answer using the code given below
    • A1 and 4 only
    • B2 and 3 only
    • C1, 3, and 4 only
    • D2 only
    Answer: (C) 1, 3, and 4 only
    Explanation

    Option c is the correct l is correct. Due to the availability of and reasonable degree of skilled man power most Luwpan were outsourcing to India which contrihuted lu the high growth sector post reform 2 is incorrect. Low tariff aml non-tariff irnµurls by India arc responsible for hieh of service sector. The foreign trade reforms domestic products to interact and compete in 3 is correct. Devalualiou of rupee currencies led to increase in the flow of which many toreign companies in India and thus contributed to the high growth sector post reform 4 is correct. After there was a high services as final product in global market. India virgin market for service sector. So, when service booming due to business outsourcing from countries to India, there was very high these services especially for banking, computer and communication. This high demand led to a high growth rate of service sector

16. #56Practice set
    Which of the following statements is correct in the context of International Comparison Program?
    • AIt adjusts the difference in cost of living across economies of the world
    • BIt provides an integrated, complete system of accounts enabling international comparisons of all significant economic activities
    • Cadjusts the export tariffs and openness across the economies of the world
    • DIt compares the funds given by world organizations and NGOs across the world
    Answer: (A) It adjusts the difference in cost of living across economies of the world
    Explanation

    Option a is the correct Comparison Program is the largest initiative, under the guidance of the Statistical Commission (UNSC). The significance is: It adjusts the difference in the cost of living of the world. India has participated in almost since its inception in 1970. MOSPI is the agency for India, which has the the planning, coordinating and implementing activities. It has also been co-chair of the ICP along with the Statistics Austria for the ICP 2017 cycle. Important Tips System of National Accounts (SNA) aims to provide an integrated, complete system of accounts enabling international comparisons of all significant economic activity. Formerly the United Nations System of National Accounts or UNSNA, it is First international standard being published in 195 It continues to evolve and is maintained by the UN, IMF, WB, OECD and the Statistical Office of the European Communities. Syste

17. #57Practice set
    The retail selling price of the non subsidised LPG cylinder for the Indian customer is determined mainly by which of the following? 1. Exchange rate of Indian rupee against dollar 2. Transportation cost 3. Direct Benefit Transfer provided to consumers I D 4. Marketing Costs 5. Price of crude oil in the international marketSelect the correct answer using the code given below
    • A1, 2, 3 and 4 only
    • B2 and 5 only
    • C1, 3 and 5 only
    • D1, 2, 4 and 5 only
    Answer: (D) 1, 2, 4 and 5 only
    Explanation

    Option d is the correct pricing in India is done on the basis of a formula parity price (IPP). The IPP is determined based prices in the international market, assuming that is imported into the l is correct: An increase in international LPG weakness in the rupee, or both, translate into higher in India. Thus, the exchange rate of the Indian rupee in the price of LPG cylinder. International tend to move in tandem with the price of crude key raw 3 is incorrect: As the question is about of prices of non-subsidised LPG in the subsidy provided is not detrimental in selling the non-subsidised LPG cylinder. The price of in India is reset on a monthly basis, effective first of every 2, 4 and 5 are correct: LPG pricing in India is the basis of a formula - import parity price (IPP). The !PP is determined based on LPG prices in the The IPP includes ocean freight insurance, custom duties, port dues,

18. #58Practice set
    Which of the following measures by the government will help in containing inflation in Food Commodities? 1. Imposing stock limits to avoid hoarding. 2. Increasing import duties on import of food commoditiesChoose the correct answer using code given below
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (A) 1 only
    Explanation

    Option a is the correct l is correct: Measures to control inflation by include imposition of stock limits on Government also maintains buffer stock and to prevent hoarding to check price 2 is incorrect: To control inflation in the government generally reduces the import duties so that adequate be maintained. Increase in import duties will expansive import. It will further increase the inflation

19. #59Practice set
    Both Foreign Direct Investments (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which of the following are correct with reference to differences between the two? umlflffl 1. FDI targets primary markets, while Fil flows into both primary and secondary market. 2. FDI helps in bringing better management skills and technology, while FII only brings in capital. 3. FDI is allowed to invest in Government Security, while FII is not allowed. 4. FDI is allowed in unlisted companies while FII is not allowed to invest in unlisted companies.Select the correct answer using the code given below
    • A1, 2 and 3 only
    • B1 and 2 only
    • C2, 3 and 4 only
    • D1, 2, 3 and 4
    Answer: (B) 1 and 2 only
    Explanation

    Option b is the correct l is correct: FDI is a source of capital in market and this capital gets converted into services. FIIs are allowed to invest in India's secondary capital markets only through the investment scheme. This scheme allows FIIs shares and debentures of Indian companies on public 2 is correct: With FDI, foreign companies involved with day-to-day operations in the This means they aren't just bringing money but also knowledge, skills and technology. only brings in capital. They arc not part of ownership company. They deal with profit in 3 is incorrect: FDI is generally related in companies, Joint ventures and others. It deal with investing in government securities FII is allowed to invest in government the Reserve Bank of India said the limits for investors (FPI) investment during the current government securities (G-secs) and State (SDLs) will remain unchanged at 6 per ce

20. #60Practice set
    With reference to the Non-resident External deposit (NRE) account, consider the following statements: 1. It is an Indian rupee denominated account. 2. Non-resident Indians can deposit their income generated in India in NRE accounts. 3. Non-repatriable non-resident Indian (NRI) investment is considered as a domestic investment.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option b is the correct l is correct: The NRE account is an Indian rupee denominated account. These accounts can be in the form current, recurring, or fixed deposits. The deposited into the account is converted to 2 is incorrect: The deposits made into should be earnings outside India. their income generated in India in NRE earned in NRE account is tax free in 3 is correct: The government had clarified investment by a company owned and non resident Indiana on a non repatriation not be considered foreign direct investment investments that are repatriable are considered investments are considered on repatriation basis means the sale or of an investment, net of taxes, are eligible to out of India

21. #61Practice set
    Consider the following statements: 1. More than of Indians fall under the category of working age population. 2. India, by virtue of its demographic dividend is one of the youngest countries in the world, behind only China.Which of the above statements is/are incorrect?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (A) 1 only
    Explanation

    Option a is the correct l is incorrect: Capital goods industries developed during the colonial 2 is incorrect: During colonial rule, India import finished consumer goods such as silk, and cotton from factories of Britain. a major exporter of raw material such as wool, jute, raw silk, indigo 3 is correct: More than half of India's was restricted to Britain while the rest was targeted like China, Sri Lanka and

22. #62Practice set
    Consider the following statements to inequality: 1. The Gini coefficient of 1 indicates perfect equality and Oindicates perfect inequality. 2. The Gini coefficient has been decreasing in India since the economic reforms of 1991.Which of the statements given above is/are correct?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (D) Neither 1 nor 2
    Explanation

    Option d is the correct 1 is incorrect: The Gini coefficient ranges from to 1 (or 100 with O representing perfect equality and l representing perfect inequality. Values over 1 possible due to negative income or 2 is incorrect: The Gini (inequality in coefficient points to an increasing India and has been increasing (not decreasing) since reforms of 1991. The Gini coefficient measured of consumption for rural India increased 0.29 in 1993-94 to 0.31 in 2011-12. Important Tips The Gini coefficient is a measure of income distribution and inequality across a population. The Gini index, or Gini coefficient, serves as a gauge of ualit ditill 01, less commonly, wealth distribution among a population. It was developed by the Italian statistician Corrado Gini in 1912

23. #63Practice set
    Which of the following statements best describe the economic situation of 'Glass Cliff'?
    • AIt refers to a situation in which women are promoted to higher positions in companies during the times of crisis
    • BIt refers to an unspoken limit on how higher a women can rise in an organisation
    • CIt refers to a situation in which mass layoffs of the employees are done to balance out the effects of aggressive hiring previously done
    • DIt refers to a situation where men employed in inferi or positions are promoted faster compared to women
    Answer: (A) It refers to a situation in which women are promoted to higher positions in companies during the times of crisis
    Explanation

    Option a is the correct term "Glass Cliff" refers to a situation in which promoted to higher positions during times of crisis or during a recession when the chance of failure likely. In simple terms, women are basically set up It gives a company someone to blame, if she fails the company out of its downward spiral. Important Tips 'Glass Ceiling' refers to an unseen and unspoken limit on how high women can rise in an organisation. A situation where men employed in female or minority dominated professions are promoted faster is known as f,srnlutor'

24. #64Practice set
    Which of the following statements with reference to Deendayal Antyodaya Yojna- National Rural Livelihoods Mission is incorrect?
    • AIt aims to promote financial literacy among the poor
    • BIt aims to bring at least one-woman member from each identified rural poor household under the Self- Help Group (SHG) network
    • CThe target group under NRLM is included based on census data
    • DMinistry of Rural Development is the nodal ministry
    Answer: (C) The target group under NRLM is included based on census data
    Explanation

    Option c is the correct inclusion of the target group under NRLM is a well-defined, transparent and equitable process identification of poor (PIP), at the level community. All households identified as poor PIP process is the NRLM Target Group and is eligible the benefits under the programme. Important Tips NRLM works on both demand and supply sides of financial inclusion. On the demand side, it promotes financial literacy among the poor and provides catalytic capital to the SHGs and their federations. On the supply side, the Mission coordinates with the financial sector and encourages use of Information, Communication Technology (ICT) based financial technologies, business correspondents and community facilitators like 'Bank Mitras'. At least one-woman member from each identified rural poor household, is to be brought under the Self-Help Group (SHG) network in a time bound manner. Specia

25. #65Practice set
    Consider the following statements: 1. Majority of the cold storages in India are owned and operated by public sector. 2. PM Formalization of Micro Food Processing Enterprises scheme adopts one district one product approach. 3. FDI is permitted under the automatic route in Food processing industries.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option bis the correct l is incorrect: There are 8,038 cold storages country and 92 per cent of their capacity is owned by private 2 is correct: The PM Formalisation of Processing Enterprises (PMFME) Scheme adopts One Product (ODOP) approach to reap benefits in terms of procurement of inputs, availing and marketing of 3 is correct: The government has permitted cent FDI through automatic route in manufacturing products subject to sectoral rules and regulations

26. #66Practice set
    With reforenn, to parity pricing of petroleum products in India, which of the following statements is/are correct? 1. Petroleum products pricing in India is done on the basis of a formula Import Parity Price. 12. 2. The LPG pricing in India is done on the basis of a formula Export parity price. 3. Import parity price includes FOB (freight on board) Price, Ocean freight, Insurance, Customs duty, Port dues etc.Select the correct answer using the code given below
    • A1 and 2 only
    • B2 and 3 only
    • C3 only
    • D1 and 3 only
    Answer: (C) 3 only
    Explanation

    Option c is the I is incorrect. Petroleum products India is done on the basis of a formula Export as we export petroleum products and import Export Parity Price represents the price which would realize on export of petroleum includes FOB Price and advance license benefit free import of crude oil pursuant to export of 2 is incorrect. LPG pricing in India is done basis of a formula - import parity price (IPP). is determined based on LPG prices in the assuming that the fuel is imported into the 3 is correct. The IPP, based on Saudi price, includes the FOB (free on board) price, insurance, custom duties, port dues, etc

27. #67Practice set
    Which of the following will give a push to Protectionism in an economy? 1. Make rules and regulation which can make it difficult for foreign producers to obtain license. 2. Implementation of Anti-dumping policies. 3. Impose heavy taxes on exports to other countries.Select the correct answer using the code given below
    • A1 only
    • B1 and 3 only
    • C1 and 2 only
    • D2 and 3 only
    Answer: (C) 1 and 2 only
    Explanation

    Option c is the correct theory of Protectionism aims to increase exports imports by imposing various kinds of trade includes: Making rules and regulation that will make it difficult for foreign producers to obtain license. Coming up with Anti-dumping policies will lead to decrease in dumped imported goods in the economy. Imposing heavy taxes on exports to other countries is against the principle of protectionism itf.elf

28. #68Practice set
    Despite having large reserves of coal, why does India import millions of tonnes of coal? l. It is the policy of India to save its own coal reserves for future, and import it from other countries for the present use. 2. Most of the power plants in India are coal-based and they are not able to sufficient supplies of coal from within the country. 3. Steel companies need large quantity of coking coal, which has to be imported.Which of the statements given above is/are correct?
    • A1 only
    • B2 and 3 only
    • C1 and 3 only
    • D1, 2 and 3
    Answer: (B) 2 and 3 only
    Explanation

    Option b is the correct does India need to import coal sector is dominated by public sector Coal of Coal India prevented capacity building sector and prevented coal to lack of enough coal mining, most of the power India are not able to get sufficient supplies of coal the of coking coal reserves, that is used as a raw steel making and allied industries, is also a factor

29. #69Practice set
    With reference to the Special Economic Zones (SEZ) in India, consider the following statements: 1. Since it is treated as a foreign territory, the value added by firms in SEZ is not added to the Gross Domestic Product of India. 87. 2. The firms in the SEZ are not allowed to sell its products in India's domestic market. 3. Units in SEZ are required to be net foreign exchange earners within a specified time limit.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct Special Economic Zones (SEZs) Act was enacted in an aim to create special economic l is incorrect: The value added by firms to the Gross Domestic Production. The SEZ is region that has economic laws different country's typical economic laws. The goal is to 2 is incorrect: In the current SEZ regime, a allowed to sell in the domestic market after the duty on the final 3 is correct: Units in SEZ are required to foreign exchange positive cumulatively in five export more than they import)

30. #70Practice set
    Consider the following statements regarding 'Limited Liability Partnership' (LLP): 1. In LLP, the partners are not responsible or liable for another partner's misconduct or negligence. 2. In India they are governed under the provisions of the Companies Act, 2013. 3. They can issue an Initial Public Offering only after the prior approval of SEBI.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct l is correct: Limited Liability Partnership an alternative corporate business form in which all partners (depending on the jurisdiction) have Under this, partners are not responsible or another partner's misconduct or negligence. This important difference from the traditional in which each partner has joint 2 is incorrect: All limited liability partnership is governed under the Limited Liability of 2008. The Ministry of Corporate Affairs 3 is incorrect: The LLP is same as and the only difference between LLP partnership is the liability of LLP partners LLP cannot issue IPO and cannot use as a company does

31. #71Practice set
    India Investment Grid (HG) is an initiative of which of the following government ministry?
    • AMinistry of Finance
    • BMinistry of Commerce and Industry
    • CMinistry of Micro, Small Medium Enterprises
    • DMinistry of Corporate Affairs
    Answer: (B) Ministry of Commerce and Industry
    Explanation

    Option b is the correct l is correct. USTTAD (Upgrading Skill in Traditional Arts/Crafts for Development) preserve heritage of traditional arts and crafts of 3 is correct. Nai Roshni Scheme aims to instill confidence among minority 4 is correct. Seekho aur Kamao (Learn aims at upgrading the skills of minority youth modern/traditional skills. Important Tips Accessible India Campaign (Sugamya Bharat Abhiyan) was launched as a nation-wide Campaign for achieving "universal accessibility for Persons with Disabilities

32. #72Practice set
    Consider the following statements with reference to the Special Economic Zones (SEZs) in India: 1. India does not have a specific SEZ legislation to provide statutory backing to such areas. 2. Entities in the SEZs are allowed duty-free import of goods for the operation and maintenance of SEZ units. 3. Units can be set up in SEZs only for manufacturing of goods and not for rendering services. 4. An entity in SEZ is prohibited from subcontracting its business operations to other entities in SEZs.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll four
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct l is incorrect: The Special Economic Zones passed in 2005. The Act came into force along with Rules in 2006. Thus, SEZs are provided the by the SEZ Act of 2 is correct: The SEZs allows for Duty procurement of goods for and maintenance of SEZ units. SEZ are essentially designated duty-free enclave to be treated as a the customs territory of India for the purpose operations in the 3 is incorrect: Units may be set up in SEZs goods and rendering services. In fact, parks developed in India serve as 4 is incorrect: An entity in the SEZ is for subcontracting its business operations entities in SEZs. Subcontracting is the assigning, or outsourcing, part of the tasks under a contract to another party known as

33. #73Practice set
    In the context of Domestic Systemically Important Insurers (D-SUs), consider the following statements: 1. D-SIIs are subjected to additional regulatory measures to deal with the systemic risks. 2. D-Slls are identified by the Financial Stability and Development Council (FSDC) of the Union Government. 3. Life Insurance Corporation of India (LIC) is the only Domestic Systemically Important Insurer in India.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct Statement l is correct: D-Slls are perceived as are 'too big or too important to fail' (TBTF). and the perceived expectation of may amplify risk-taking, reduce market competitive distortions, and increase the possibility in to IRDAI, above mentioned that D-SIIs should be subjected to measures to deal with the systemic risks hazard 2 is incorrect: D-Slls are identified by IRDAI (Insurance Regulatory of Tndia) 3 is incorrect: Life Insurance Corporation (LIC); General Insurance Corporntion of India and New India Assurance Co. Ltd, are on the list for the year 2021

34. #74Practice set
    With reference to the Director General of Foreign Trade (DGFT), consider the following statements: 1. It is an attached office under the Ministry of Finance. 2. It has the power to regulate and prohibit the export or import of products. 3. It is responsible for formulating and implementing the Foreign Trade Policy.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option b is the correct answer. The Directorate General of Foreign Trade (DGFT) is an attached office of the Ministry of Commerce and Industry and is headed by Director General of Foreign Trade. The Directorate General of Foreign Trade (DGFT) has the power to impose restrictions on export and import of goods from India on certain grounds like protection of public morals; protection of human, animal or plant life or health; protection of patents, trademarks and copyrights; prevention of deceptive practices etc. It is responsible for formulating and implementing the Foreign Trade Policy with the main objective of promoting India's exports, It also plays an advisory role to the Government on Policy measures pertaining to national and international economic scenarios

35. #75Practice set
    Which of the following may give a push to Protectionism in an economy? 1. Make rules and regulation which can make it difficult for foreign producers to obtain license. 2. Increase the export price through revaluation of currency. 3. Implementation of Anti-dumping policies.Select the correct answer using the code given below
    • A1 and 2 only
    • B1 and 3 only
    • C2 and 3 only
    • D1, 2 and 3
    Answer: (D) 1, 2 and 3
    Explanation

    Option d is the correct 1 is incorrect. The Mines and and Regulation) Amendment Act, the Mines and Minerals (Development Act, 1957 Act empowers the central government to mine (other than coal, lignite, and atomic minerals) leased through an auction for a particular end-use iron ore mine for a steel plant). The 2021 amendment such power. The 2021 amendment act no mine will be reserved for particular 2 is incorrect. The Amendment Act provides mines (other than atomic minerals) may sell up of their annual mineral production in the open meeting their own needs. The central government this threshold through a notification. The lessee to pay additional charges for mineral sold in the 3 is incorrect. Section 15 of the Mines (Development and Regulation) Act, 1957 governments to make rules for regulating the grant concessions in respect of minor minerals. Act, states conduct the auction of minera

36. #76Practice set
    Consider the following statements regarding Foreign investment in India: 1. Foreign Institutional Investor (Fil) is an institution established or incorporated outside India which proposes to make investment in securities in India. 2. When an investor has a stake of more than 10 in an enterprise, it is construed as Foreign Direct Investment (FDI). 3. The Foreign Direct Investment flow is considered to be more stable than Foreign Institutional Investment.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (C) All three
    Explanation

    Option c is the correct l is correct. According to the Securities Board of India (SEBI), Foreign (FII) means an institution established outside India which proposes to in securities in India. FIIs are allowed to new securities or trade in already 2 is correct. According to the SEBI 2014, any investment beyond in a termed as FDI. Further, any investment in an even if it is only one or two percentage of the will also be treated as 3 is correct. Foreign Direct Investment more direct involvement in technology, management enterprise. FDI flow is considered more stable as it is investment by corporates generating jobs in the country. Fil inflow into the stock helps stabilise the rupee, is considered hot can leave suddenly. D

37. #77Practice set
    With reference to the Foreign Direct Investment, consider the following: 1. FDI is only an unassertive investment in the securities of a foreign nation like bonds and stocks. 2. FDT is an ownership in a commercial enterprise located in a country by an entity based out of another country. 3. FDI includes mergers and acquisitions, intra-company loans and reinvesting from foreignHow many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (B) Only two
    Explanation

    Option b is the correct l is incorrect: are distinguished investments in which an investor merely of foreign-based companies. Portfolio is only an unassertive investment in of a foreign nation like bonds and 2 is correct: A foreign direct investment an investment made by a firm or individual in into business interests located in another or Foreign Direct Investment is a controlling in a commercial enterprise located in by an entity based out of another 3 is correct: Generally, FDI takes place when establishes foreign business operations or business assets in a foreign company. FDI and acquisitions, construction of new loans and reinvesting profits from

38. #78Practice set
    With reference to Balance of Payments (BOP), consider the following statements: 1. BOP is the record of all economic transactions in goods, services and assets of the country with the rest of the world for a specific time period. 2. Net capital inflow is the only way for a country to finance its current account deficit. 3. A surplus BOP is recorded as a reduction in the forex reserves of a country.How many of the statements given above are correct?
    • AOnly one
    • BOnly two
    • CAll three
    • DNone
    Answer: (A) Only one
    Explanation

    Option a is the correct 1 is correct: BOP is an account that keeps track the transactions of an economy with all other countries world. Whenever a transaction takes place that exchange of currency, it gets recorded in the 2 is incorrect: Net capital inflow is one way a country can finance its current account deficit. way is to engage in official reserve this, the central bank taps into its forex reserves to current account deficit. There are other ways as well the current account 3 is incorrect: BOP is said to be in surplus the net outcome of the current account and the is positive. For Ex - let current account be let capital account be In this case the BOP is BOP gets recorded in the form accrual/addition forex reserves. That is, the size of the forex reserves the country has surplus BOP in a given year. Important Tips BOP can be seen as the outcome of two accounts - current account and

39. #79Practice set
    Current and Capital account convertibility of the Indian rupee implies: 1. Capital Account Convertibility includes freedom to convert currencies to make unilateral transfers and to pay dividends. 2. Current account convertibility exists for Non-Resident Indians for undertaking portfolio investments in India.Which of the statements given above is/are correct?
    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Answer: (D) Neither 1 nor 2
    Explanation

    Option d is the correct l is incorrect: Current account freedom to convert rupee into dollars etc and for export and import of goods and services. It freedom to convert currencies to make/ transfers like gifts, donations, etc and to interest, dividend, etc. Individuals and entities currencies in the foreign exchange market. It easy financial transactions for the export and import and 2 is incorrect: Capital account the freedom to conduct investment any constraints. Capital account for foreign investors and Non-Resident for undertaking direct and portfolio investment It involves the freedom to invest in financial assets

40. #80Practice set
    Consider the following statements regarding 'Most Favoured Nation' (MFN) clause of WTO: 1. It stipulates that member country cannot discriminate between their trading partners. 2. MFN is applicable to trade in goods only and services are not governed under MFN clause. 3. Free Trade Agreements are allowed as exceptions from MFN category under WTO regime. PractkebookWhich of the above given statements is/are correct? avoid exceeding their jurisdiction. which are priced below in the domestic market. prevent tax evasion by the companies. 2002 to prevent companies from following anti-competitive practices. Consider the following statements regarding the Bilateral Investment Treaty (BIT)
    • A1 only
    • B2 and 3 only
    • C1 and 3 only
    • D1, 2 and 3
    Answer: (C) 1 and 3 only
    Explanation

    Option c is the correct l is correct. The MFN status is governed by Trade Organisation's (WTO) General Tariffs and Trade (GATT). Countries signatory to commit against discriminating each other of the WTO member the MFN status, a WTO member country is treat other trading nations in a especially with regard to customs duty and As per the WTO agreements, member countries discriminate between their trading 2 is incorrect. MFN is governed in trade in is also a priority in the General Agreement on Services (GATS) and the Agreement on Trade of Intellectual Property Rights (TRIPS). Services under MNF clause under 3 is correct. There are some exceptions regime which allow member countries to Set up a 'free trade agreement that applies only to goods traded within the group (discriminating against goods from outside). Give developing countries special access to their markets. Raise barriers against

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