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- Question 1 of 49
1. Question
Category: NCERTYield is measured as:
CorrectMultiple Cropping – to grow more than one crop on a piece of land during the year.
It is the most common way of increasing production on a given piece of land and other way is to use modern farming methods for higher yield.IncorrectMultiple Cropping – to grow more than one crop on a piece of land during the year.
It is the most common way of increasing production on a given piece of land and other way is to use modern farming methods for higher yield. - Question 2 of 49
2. Question
Category: NCERTTill the mid-1960s, the seeds used in cultivation were traditional ones with relatively low yields. In context of this, consider the following statements.
1. Traditional seeds needed more irrigation
2. HYV seeds needed less water and also chemical fertilizers than traditional seeds
3. Farmers used cow-dung and other natural manure as fertilizers for traditional seeds
4. Compared to the traditional seeds, the HYV seeds promised to produce much greater amounts of grain on a single plantWhich of these statements are correct?
CorrectThe Green Revolution in the late 1960s introduced the Indian farmer to cultivation of wheat and rice using high yielding varieties (HYVs) of seeds. Higher yields were possible only from a combination of HYV seeds, irrigation, chemical fertilizers, pesticides, etc.
IncorrectThe Green Revolution in the late 1960s introduced the Indian farmer to cultivation of wheat and rice using high yielding varieties (HYVs) of seeds. Higher yields were possible only from a combination of HYV seeds, irrigation, chemical fertilizers, pesticides, etc.
- Question 3 of 49
3. Question
Category: NCERTAssertion: Sometime after the use of chemical fertilizers, the soil will be more fertile than ever before.
Reason: Chemical fertilizers can kill the bacteria.
Select the correct code:CorrectChemical fertilizers provide minerals which dissolve in water and are immediately available to plants. But these may not be retained in the soil for long. They may escape from the soil and pollute groundwater, rivers and lakes. Chemical fertilizers can also kill bacteria and other microorganisms in the soil. This means some time after their use, the soil will be less fertile than ever before.
IncorrectChemical fertilizers provide minerals which dissolve in water and are immediately available to plants. But these may not be retained in the soil for long. They may escape from the soil and pollute groundwater, rivers and lakes. Chemical fertilizers can also kill bacteria and other microorganisms in the soil. This means some time after their use, the soil will be less fertile than ever before.
- Question 4 of 49
4. Question
Category: NCERTConsider the following statements.
1. Market activities involve remuneration to anyone who performs for pay or profit
2. Non-market activities are the production for self-consumption.
3. Market activities include production of goods or services, including government service
4. Non-market activities include consumption and processing of primary product and own account production of fixed assets
Which of these statements are correct?CorrectMarket activities involve remuneration to anyone who performs whereas non-market activities are the production for self-consumption.
IncorrectMarket activities involve remuneration to anyone who performs whereas non-market activities are the production for self-consumption.
- Question 5 of 49
5. Question
Category: NCERTWhich of the following sectors are categorised as Tertiary sector?
1. Fishing
2. Mining and quarrying
3. Tourism
4. Manufacturing
5. Transport
Choose from the following options.CorrectThe various activities have been classified into three main sectors i.e., primary, secondary and tertiary.
Primary sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining and quarrying.
Manufacturing is included in the secondary sector.
Trade, transport, communication, banking, education, health, tourism, services, insurance, etc. are included in the tertiary sector.IncorrectThe various activities have been classified into three main sectors i.e., primary, secondary and tertiary.
Primary sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining and quarrying.
Manufacturing is included in the secondary sector.
Trade, transport, communication, banking, education, health, tourism, services, insurance, etc. are included in the tertiary sector. - Question 6 of 49
6. Question
Category: NCERTConsider the following statements.
1. Sarva Siksha Abhiyan has been implemented to encourage attendance and retention of children and improve their nutritional status.
2. Mid-day meal scheme is a significant step towards providing elementary education to all children in the age group of 6–14 years.
Which of these statements are correct?CorrectSarva Shiksha Abhiyan (SSA) was a flagship program launched by the Government of India in 2001 to achieve universal elementary education. It aimed to provide free and compulsory education to children aged 6 to 14 years, as mandated by the 86th Amendment to the Constitution. The initiative focused on improving school infrastructure, bridging gender and social gaps, and enhancing the quality of learning
IncorrectSarva Shiksha Abhiyan (SSA) was a flagship program launched by the Government of India in 2001 to achieve universal elementary education. It aimed to provide free and compulsory education to children aged 6 to 14 years, as mandated by the 86th Amendment to the Constitution. The initiative focused on improving school infrastructure, bridging gender and social gaps, and enhancing the quality of learning
- Question 7 of 49
7. Question
Category: NCERTConsider the following statements.
1. Seasonal unemployment happens when people are not able to find jobs during some months of the year.
2. People dependent upon agriculture usually face seasonal unemployment.
3. In case of disguised unemployment people appear to be employed.
4. Rural areas have mostly educated unemployment.
Which of these statements are not correct?CorrectSeasonal unemployment occurs when workers lose their jobs at certain times of the year due to fluctuations in demand. This type of unemployment is common in industries like agriculture, tourism, and retail, where employment depends on seasonal cycles.
Disguised unemployment occurs when more people are employed in a job than actually needed, leading to inefficiency. It is common in agriculture and informal sectors, especially in developing economies like India.
Educated unemployment refers to a situation where individuals with formal education—such as graduates or postgraduates—struggle to find jobs that match their qualifications. This issue is particularly prevalent in urban areas and is a growing concern in India.
IncorrectSeasonal unemployment occurs when workers lose their jobs at certain times of the year due to fluctuations in demand. This type of unemployment is common in industries like agriculture, tourism, and retail, where employment depends on seasonal cycles.
Disguised unemployment occurs when more people are employed in a job than actually needed, leading to inefficiency. It is common in agriculture and informal sectors, especially in developing economies like India.
Educated unemployment refers to a situation where individuals with formal education—such as graduates or postgraduates—struggle to find jobs that match their qualifications. This issue is particularly prevalent in urban areas and is a growing concern in India.
- Question 8 of 49
8. Question
Category: NCERTConsider the following statements regarding the unemployment.
1. Unemployment tends to increase economic overload.
2. Increase in unemployment is an indicator of a depressed economy
3. In case of India, a large number of people represented with low income and productivity are counted as unemployedCorrectIn case of India, statistically, the unemployment rate is low. A large number of people represented with low income and productivity are counted as employed. They appear to work throughout the year but in terms of their potential and income, it is not adequate for them.
IncorrectIn case of India, statistically, the unemployment rate is low. A large number of people represented with low income and productivity are counted as employed. They appear to work throughout the year but in terms of their potential and income, it is not adequate for them.
- Question 9 of 49
9. Question
Category: NCERTAssertion: In recent years, there has been a decline in the dependence of population on agriculture partly.
Reason: Agriculture faces disguised unemployment.
Select the correct code:CorrectSome of the surplus labour in agriculture has moved to either the secondary or the tertiary sector. In the secondary sector, small scale manufacturing is the most labour-absorbing.
IncorrectSome of the surplus labour in agriculture has moved to either the secondary or the tertiary sector. In the secondary sector, small scale manufacturing is the most labour-absorbing.
- Question 10 of 49
10. Question
Category: NCERTConsider the following statements regarding the consequences of disguised unemployment in agriculture.
1. The concept of sharing of work in the field and the produce raised reduces the hardship of unemployment in the rural sector.
2. This does not reduce the poverty of the family, gradually surplus labour from every household tends to migrate from the village in search of jobs.
Which of these statements are correct?CorrectIncorrect - Question 11 of 49
11. Question
Category: NCERTConsider the following statements regarding the concept of social exclusion.
1. Poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people.
2. It is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others enjoy.
3. Untouchability is the example of this concept.
Which of these statements are correct?CorrectSocial Exclusion it is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others enjoy.
IncorrectSocial Exclusion it is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others enjoy.
- Question 12 of 49
12. Question
Category: NCERTThe concept of the economic territory is different
from the geographical territory of a country. In this
regard, which of the following can be included within
the Economic Territory of India?
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6. Foreign Institutional Investment
Choose the correct answer using the code given below:
1. Political frontiers of the country including its territorial waters
2. Offices of international organizations located in India
3. Fishing vessels operated by the residents of the country in the international waters
4. Military establishments of other countries located in India
Which of the statements given above is/are correct?CorrectThe concept of domestic territory (economic territory) is different from the geographical or political territory of a country. Domestic territory of a country includes the following
- Political frontiers of the country including its territorial waters
- Ships, and aircrafts operated by the residents of the country between two or more countries for example, Air India’s services between different countries.
- Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of the country in the international waters or engaged in extraction in areas where the country has exclusive rights of operation.
- Embassies, consulates and military establishments of the country located in other countries.
It excludes all embassies, consulates and military establishments of other countries and offices of international organisations located in India.
IncorrectThe concept of domestic territory (economic territory) is different from the geographical or political territory of a country. Domestic territory of a country includes the following
- Political frontiers of the country including its territorial waters
- Ships, and aircrafts operated by the residents of the country between two or more countries for example, Air India’s services between different countries.
- Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of the country in the international waters or engaged in extraction in areas where the country has exclusive rights of operation.
- Embassies, consulates and military establishments of the country located in other countries.
It excludes all embassies, consulates and military establishments of other countries and offices of international organisations located in India.
- Question 13 of 49
13. Question
Category: NCERTWhich of the following form a crucial part of the Capital Receipts in a Government Budget?
1. Loans taken by the government from the public
2. Interest receipts on account of loans by the central government
3. Borrowings from the RBI
4. PSU disinvestments
5. Cash grants-in-aid from foreign countries
Select the correct answer using the code given below:CorrectCapital Receipts:
- The main items of capital receipts are market borrowings and from Banks, loans received from foreign governments and international organisations, and recoveries of loans granted by the central government.
- Other items include small savings (Post-Office Savings Accounts, National Savings Certificates, etc), provident funds and net receipts obtained from the sale of shares in Public Sector Undertakings (PSUs).
- Divided into tax and non-tax revenues.
- Tax revenue receipts comprise of direct taxes – which fall directly on individuals (personal income tax) and firms (corporation tax), and indirect taxes like excise taxes (duties levied on goods produced within the country), customs duties (taxes imposed on goods imported into and exported out of India) and service tax. The share of direct taxes in gross tax revenue has increased from 19.1 per cent in 1990-91 to 41.3 per cent in 2003-04.
- Non-tax revenue consists of interest receipts (on account of loans by the central government which constitutes the single largest item of non-tax revenue), dividends and profits on investments made by the government, fees and other receipts for services rendered by the government. Cash grants-in-aid from foreign countries and international organisations are also included.
IncorrectCapital Receipts:
- The main items of capital receipts are market borrowings and from Banks, loans received from foreign governments and international organisations, and recoveries of loans granted by the central government.
- Other items include small savings (Post-Office Savings Accounts, National Savings Certificates, etc), provident funds and net receipts obtained from the sale of shares in Public Sector Undertakings (PSUs).
- Divided into tax and non-tax revenues.
- Tax revenue receipts comprise of direct taxes – which fall directly on individuals (personal income tax) and firms (corporation tax), and indirect taxes like excise taxes (duties levied on goods produced within the country), customs duties (taxes imposed on goods imported into and exported out of India) and service tax. The share of direct taxes in gross tax revenue has increased from 19.1 per cent in 1990-91 to 41.3 per cent in 2003-04.
- Non-tax revenue consists of interest receipts (on account of loans by the central government which constitutes the single largest item of non-tax revenue), dividends and profits on investments made by the government, fees and other receipts for services rendered by the government. Cash grants-in-aid from foreign countries and international organisations are also included.
- Question 14 of 49
14. Question
Category: NCERTConsider the following statements with reference to the Primary Deficit:
1. Primary deficit indicates the borrowing requirement inclusive of interest payment.
2. An increase in primary deficit is reflective of government’s efforts at bridging the fiscal gap during a financial year.
Which of the statements given above is/are correct?CorrectPrimary Deficit:
Gross primary deficit = Gross fiscal deficit – net interest liabilities Primary deficit indicates the borrowing requirement exclusive of interest payment. The borrowing requirement of the government includes not only accumulated debt, but also interest payment on debt.
IncorrectPrimary Deficit:
Gross primary deficit = Gross fiscal deficit – net interest liabilities Primary deficit indicates the borrowing requirement exclusive of interest payment. The borrowing requirement of the government includes not only accumulated debt, but also interest payment on debt.
- Question 15 of 49
15. Question
Category: NCERTWhich of the following form part of Capital Account?
1. External commercial borrowings
2. Shipping
3. Banking
4. Offshore funds
5. Foreign Direct Investment
6. Foreign Institutional Investment
Choose the correct answer using the code given below:CorrectCapital Account (Balance of Payment)
Capital Account records all international transactions of assets in any one of the forms in which wealth can be held. Purchase of assets is a debit item on the capital account.
If an Indian buys a UK Car Company, it enters capital account transactions as a debit item (as foreign exchange is flowing out of India). On the other hand, sale of assets like sale of share of an Indian company to a Chinese customer is a credit item on the capital account.
Capital Account includes Foreign Direct Investments (FDIs), Foreign Institutional Investments (FIIs), external borrowings and assistance.
Shipping and banking form part of Current Account.Capital Account (Balance of Payment)
Capital Account records all international transactions of assets in any one of the forms in which wealth can be held. Purchase of assets is a debit item on the capital account.
If an Indian buys a UK Car Company, it enters capital account transactions as a debit item (as foreign exchange is flowing out of India). On the other hand, sale of assets like sale of share of an Indian company to a Chinese customer is a credit item on the capital account.
Capital Account includes Foreign Direct Investments (FDIs), Foreign Institutional Investments (FIIs), external borrowings and assistance.
Shipping and banking form part of Current Account.
IncorrectCapital Account (Balance of Payment)
Capital Account records all international transactions of assets in any one of the forms in which wealth can be held. Purchase of assets is a debit item on the capital account.
If an Indian buys a UK Car Company, it enters capital account transactions as a debit item (as foreign exchange is flowing out of India). On the other hand, sale of assets like sale of share of an Indian company to a Chinese customer is a credit item on the capital account.
Capital Account includes Foreign Direct Investments (FDIs), Foreign Institutional Investments (FIIs), external borrowings and assistance.
Shipping and banking form part of Current Account.Capital Account (Balance of Payment)
Capital Account records all international transactions of assets in any one of the forms in which wealth can be held. Purchase of assets is a debit item on the capital account.
If an Indian buys a UK Car Company, it enters capital account transactions as a debit item (as foreign exchange is flowing out of India). On the other hand, sale of assets like sale of share of an Indian company to a Chinese customer is a credit item on the capital account.
Capital Account includes Foreign Direct Investments (FDIs), Foreign Institutional Investments (FIIs), external borrowings and assistance.
Shipping and banking form part of Current Account.
- Question 16 of 49
16. Question
Category: NCERTIn the Indian context, which of the following can be considered as an immediate effect owing to an increase in Foreign Exchange Rate?
CorrectA rise in price of foreign exchange will reduce the demand for imports as we have to pay more in rupees for the goods.
IncorrectA rise in price of foreign exchange will reduce the demand for imports as we have to pay more in rupees for the goods.
- Question 17 of 49
17. Question
Category: NCERTWhile making decisions in an economy, which of the following qualify to be Economic Agents?
1. Government
2. Banks
3. Consumers
4. Corporations
5. Producers
Select the correct answer using the code given below:CorrectEconomic units or economic agents are those individuals or institutions which take economic decisions. They may be producers of goods and services who decide what and how much to produce and consumers as well who decide what and how much to buy.
IncorrectEconomic units or economic agents are those individuals or institutions which take economic decisions. They may be producers of goods and services who decide what and how much to produce and consumers as well who decide what and how much to buy.
- Question 18 of 49
18. Question
Category: NCERTConsider a situation where a country has produced 100 motor bikes at the cost of Rs 1,000/motor bike in the year 2005, as a result the GDP of a country at current price becomes Rs 1,00,000. In the year 2010 the same country has produced 100 motor bikes at the cost of 2,000/motor bike so as to raise its GDP to Rs 2,00,000. What can you infer from this situation?
CorrectReal GDP (Gross Domestic Product) measures the total value of goods and services produced within a country, adjusted for inflation. It reflects the actual economic output by using constant prices from a base year, ensuring that inflation doesn’t distort comparisons over time.
In the present case though the Nominal GDP has doubled but the real GDP remains same. Unlike Real GDP, it does not adjust for inflation, meaning price changes can distort comparisons over time.
Real GDP= (Nominal GDP/GDP Deflator) ×100
IncorrectReal GDP (Gross Domestic Product) measures the total value of goods and services produced within a country, adjusted for inflation. It reflects the actual economic output by using constant prices from a base year, ensuring that inflation doesn’t distort comparisons over time.
In the present case though the Nominal GDP has doubled but the real GDP remains same. Unlike Real GDP, it does not adjust for inflation, meaning price changes can distort comparisons over time.
Real GDP= (Nominal GDP/GDP Deflator) ×100
- Question 19 of 49
19. Question
Category: NCERTConsider the following statements with reference to the Consumer Price Index (CPI) and GDP deflator:
- CPI covers the entire range of good and services in the economy whereas GDP deflator includes basket of certain goods and services.
- CPI includes prices of imported goods whereas the GDP deflator does not include prices of imported goods.
- Weights are constant in GDP deflator, but they differ according to production level of each good in CPI.
Which of the statements given above is/are correct?
CorrectConsumer Price Index (CPI) is the index of prices of a given basket of commodities which are bought by the representative consumer. CPI is generally expressed in percentage terms as compared to a base year‘s prices.
The GDP deflator is an economic metric that measures the impact of inflation on a country’s GDP by comparing nominal GDP to real GDP.
Therefore, GDP deflator takes into account all goods and services produced in the country and does not include imported goods.
IncorrectConsumer Price Index (CPI) is the index of prices of a given basket of commodities which are bought by the representative consumer. CPI is generally expressed in percentage terms as compared to a base year‘s prices.
The GDP deflator is an economic metric that measures the impact of inflation on a country’s GDP by comparing nominal GDP to real GDP.
Therefore, GDP deflator takes into account all goods and services produced in the country and does not include imported goods.
- Question 20 of 49
20. Question
Category: NCERTWhich of the following statements best describes the National Income (NI)?
CorrectGDP ≡ Sum total of gross value added of all the firms in the economy
GNP ≡ GDP + Net factor income from abroad
Net factor income from abroad= Factor income earned by the domestic factors of production employed in the rest of the world – Factor income earned by the factors of production of the rest of the world employed in the domestic economy
NNP (at market prices) ≡ GNP – Depreciation
NNP at factor cost ≡ NNP at market prices – Net indirect taxes
(National Income or per capita income)IncorrectGDP ≡ Sum total of gross value added of all the firms in the economy
GNP ≡ GDP + Net factor income from abroad
Net factor income from abroad= Factor income earned by the domestic factors of production employed in the rest of the world – Factor income earned by the factors of production of the rest of the world employed in the domestic economy
NNP (at market prices) ≡ GNP – Depreciation
NNP at factor cost ≡ NNP at market prices – Net indirect taxes
(National Income or per capita income) - Question 21 of 49
21. Question
Category: NCERTWhich of the following equations correctly describes the GVA at market prices?
CorrectGross Value Added (GVA) at Market Prices is a measure of economic productivity, reflecting the value of goods and services produced in an economy after adjusting for subsidies and taxes.
GVA at Market Prices= GVA at Basic Prices + Net Taxes on Products
IncorrectGross Value Added (GVA) at Market Prices is a measure of economic productivity, reflecting the value of goods and services produced in an economy after adjusting for subsidies and taxes.
GVA at Market Prices= GVA at Basic Prices + Net Taxes on Products
- Question 22 of 49
22. Question
Category: NCERTWhich of the following is/are not taken into account while calculating the Gross Domestic Product (GDP) of a country?
1. Income generated by foreign companies inside the country
2. Income generated by the Indian citizens outside the country
3. Income generated by the foreign citizens inside the country
Select the correct answer using the code given below:CorrectGDP (Gross Domestic Product) measures the total value of goods and services produced within a country including foreign entities.
IncorrectGDP (Gross Domestic Product) measures the total value of goods and services produced within a country including foreign entities.
- Question 23 of 49
23. Question
Category: NCERTWhich of the following can be considered as part of money supply in the economy?
1. Demand deposits of Savings account
2. Current account deposits
3. Coins
4. Currency notesSelect the correct answer using the code given below:
CorrectThe money supply in an economy includes various components that represent liquid assets available for transactions. It is categorized into different measures:
- Demand Deposits in Savings Accounts – Funds that individuals can withdraw or use for transactions without prior notice.
- Current Account Deposits – Money held by businesses and individuals for daily transactions, often without interest.
- Coins – Physical currency issued by the government for circulation.
- Currency Notes – Paper money issued by the central bank.
Additionally, money supply also includes:
- Time Deposits (Fixed Deposits, Recurring Deposits) – These are less liquid and not readily available for spending.
- Central Bank Reserves – Funds held by banks in their reserves with the Reserve Bank of India (RBI).
- Money Market Instruments – Includes treasury bills, commercial papers, and certificates of deposit.
IncorrectThe money supply in an economy includes various components that represent liquid assets available for transactions. It is categorized into different measures:
- Demand Deposits in Savings Accounts – Funds that individuals can withdraw or use for transactions without prior notice.
- Current Account Deposits – Money held by businesses and individuals for daily transactions, often without interest.
- Coins – Physical currency issued by the government for circulation.
- Currency Notes – Paper money issued by the central bank.
Additionally, money supply also includes:
- Time Deposits (Fixed Deposits, Recurring Deposits) – These are less liquid and not readily available for spending.
- Central Bank Reserves – Funds held by banks in their reserves with the Reserve Bank of India (RBI).
- Money Market Instruments – Includes treasury bills, commercial papers, and certificates of deposit.
- Question 24 of 49
24. Question
Category: NCERTWith reference to the Regional Rural Banks (RRBs), consider the following statements:
1. RRBs are legally backed by the legislation of Regional Rural Banks Act, 1976.
2. The area of operation of RRBs is limited to only rural areas.
3. RRBs are regulated by the National Bank for Agriculture and Rural Development.
Which of the statements given above is/are correct?CorrectRegional Rural Banks (RRBs):
- On the basis of Report of Narasimham Working Group in 1975, RRBs were established under RRB Act, 1976 as the specialized banks to cater to the needs of the rural poor.
- RRBs are set-up as rural-oriented commercial banks with the low cost profile of cooperatives but with the professional discipline and modern outlook of commercial banks.
- The branch network of RRBs in the rural area form around 43 per cent of the total rural branches of commercial banks.
- A large number of branches of RRBs were opened in the un-banked or under-banked areas providing services to the interior and far-flung areas of the country.
- RRBs primarily cover small and marginal farmers, landless laborers, rural artisans, small traders and other weaker sections of the rural community.
- The RRBs were owned by three entities with their respective shares as follows: Central Government → 50%, State government → 15%, Sponsor bank → 35%
- They are regulated by the Reserve Bank of India (RBI) and supervised by the National Bank for Agriculture and Rural Development (NABARD).
IncorrectRegional Rural Banks (RRBs):
- On the basis of Report of Narasimham Working Group in 1975, RRBs were established under RRB Act, 1976 as the specialized banks to cater to the needs of the rural poor.
- RRBs are set-up as rural-oriented commercial banks with the low cost profile of cooperatives but with the professional discipline and modern outlook of commercial banks.
- The branch network of RRBs in the rural area form around 43 per cent of the total rural branches of commercial banks.
- A large number of branches of RRBs were opened in the un-banked or under-banked areas providing services to the interior and far-flung areas of the country.
- RRBs primarily cover small and marginal farmers, landless laborers, rural artisans, small traders and other weaker sections of the rural community.
- The RRBs were owned by three entities with their respective shares as follows: Central Government → 50%, State government → 15%, Sponsor bank → 35%
- They are regulated by the Reserve Bank of India (RBI) and supervised by the National Bank for Agriculture and Rural Development (NABARD).
- Question 25 of 49
25. Question
Category: NCERTWhich of the following statements best describes the Base Rate?
CorrectBase rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers.
IncorrectBase rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers.
- Question 26 of 49
26. Question
Category: NCERTIn the context of Indian Economy, the term ‘Open Market Operations’ which is often mentioned in the media is associated with which of the following?
CorrectOpen Market Operations refers to buying and selling of bonds issued by the Government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the Government.
When RBI buys a government bond in the open market, it pays for it by giving a cheque. This cheque increases the total amount of reserves in the economy and thus increases the money supply. Selling of a bond by RBI (to private individuals or institutions) leads to reduction in quantity of reserves and hence the money supply.
IncorrectOpen Market Operations refers to buying and selling of bonds issued by the Government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the Government.
When RBI buys a government bond in the open market, it pays for it by giving a cheque. This cheque increases the total amount of reserves in the economy and thus increases the money supply. Selling of a bond by RBI (to private individuals or institutions) leads to reduction in quantity of reserves and hence the money supply.
- Question 27 of 49
27. Question
Category: NCERTWhich of the following qualitative tools adopted by the RBI to persuade the commercial banks to advance loans in the economic interest of the country?
CorrectMoral Suasion refers to a method adopted by the central bank to persuade or convince the commercial banks to advance credit in accordance with the directives of the central bank in the economic interest of the country.
IncorrectMoral Suasion refers to a method adopted by the central bank to persuade or convince the commercial banks to advance credit in accordance with the directives of the central bank in the economic interest of the country.
- Question 28 of 49
28. Question
Category: NCERTWith reference to the Marginal Standing Facility (MSF), consider the following statements:
1. It is a window for all commercial banks to borrow overnight from the RBI in an emergency situation.
2. Under MSF, banks can borrow funds up to one per cent of their net demand and time liabilities.
3. Under the MSF facility, banks are allowed to use the securities that come under the Statutory Liquidity Ratio.
Which of the statements given above is/are correct?CorrectMarginal Standing Facility (MSF): A facility under which scheduled commercial banks (not all commercial banks) can borrow an additional amount of overnight money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit at a penal rate of interest. This provides a safety valve against unanticipated liquidity shocks to the banking system.
IncorrectMarginal Standing Facility (MSF): A facility under which scheduled commercial banks (not all commercial banks) can borrow an additional amount of overnight money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit at a penal rate of interest. This provides a safety valve against unanticipated liquidity shocks to the banking system.
- Question 29 of 49
29. Question
Category: NCERTWhich of the following sectors are covered under the Priority Sector Lending (PSL) programme of the Reserve Bank of India?
1. Export credit
2. MSMEs
3. Housing
4. Social infrastructure
5. Renewable energy
Select the correct answer using the code given below:CorrectThe RBI mandates banks to lend a certain portion of their funds to specified sectors, like agriculture, Micro, Small and Medium Enterprises (MSMEs), export credit, education, housing, social infrastructure, renewable energy among others.
All scheduled commercial banks are mandated to set aside 40% of their Adjusted Net Bank Credit (ANDC) and Regional rural banks, co-operative banks and
small finance banks have to allocate 75% of ANDC for lending to these sectors.IncorrectThe RBI mandates banks to lend a certain portion of their funds to specified sectors, like agriculture, Micro, Small and Medium Enterprises (MSMEs), export credit, education, housing, social infrastructure, renewable energy among others.
All scheduled commercial banks are mandated to set aside 40% of their Adjusted Net Bank Credit (ANDC) and Regional rural banks, co-operative banks and
small finance banks have to allocate 75% of ANDC for lending to these sectors. - Question 30 of 49
30. Question
Category: NCERTWhich of the following is widely regarded as the ‘Lender of the Last Resort’?
CorrectRBI as a lender of last resort:
- As the total amount of money stock in the economy is much greater than the volume of high-powered money (The total liability of the monetary authority of the country).
- Commercial banks create this extra amount of money by giving out a part of their deposits as loans or investment credits.
- In case of a crisis, it stands by the commercial banks as a guarantor and extends loans to ensure the solvency of the latter.
IncorrectRBI as a lender of last resort:
- As the total amount of money stock in the economy is much greater than the volume of high-powered money (The total liability of the monetary authority of the country).
- Commercial banks create this extra amount of money by giving out a part of their deposits as loans or investment credits.
- In case of a crisis, it stands by the commercial banks as a guarantor and extends loans to ensure the solvency of the latter.
- Question 31 of 49
31. Question
Category: NCERTWith reference to the Co-operative Banks, consider the following statements:
- Co-operative banks are owned and controlled by the members who democratically elect a board of directors to govern these banks.
- Co-operative banks do not fall under the direct supervision of the Reserve Bank of India.
- They are registered under the Multi-State Co-operative Societies Act, 2002.
Which of the statements given above is/are correct?
CorrectA Co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. It is distinct from commercial banks.
Since there is duality of control over these banks with banking related functions being regulated by the Reserve Bank and management related functions regulated by respective State Governments/Central Government. (‘Cooperation’ is a state subject.)
These banks are owned and controlled by the members, who democratically elect a board of directors.
IncorrectA Co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. It is distinct from commercial banks.
Since there is duality of control over these banks with banking related functions being regulated by the Reserve Bank and management related functions regulated by respective State Governments/Central Government. (‘Cooperation’ is a state subject.)
These banks are owned and controlled by the members, who democratically elect a board of directors.
- Question 32 of 49
32. Question
Category: NCERTWhich of the following statements best describes the relationship between the Interest Rate and Money held by the public?
CorrectThe larger is the quantum of transactions to be made, the larger is the quantity of money demanded. When interest rates go up, people become less interested in holding money since holding money amounts to holding less of interest-earning deposits, and thus less interest received. Therefore, at higher interest rates, money demanded comes down.
IncorrectThe larger is the quantum of transactions to be made, the larger is the quantity of money demanded. When interest rates go up, people become less interested in holding money since holding money amounts to holding less of interest-earning deposits, and thus less interest received. Therefore, at higher interest rates, money demanded comes down.
- Question 33 of 49
33. Question
Category: NCERTWhich of the following are quantitative tools used by the Reserve Bank of India in order to control the money supply in the market?
1. Open Market Operations
2. Cash Reserve Ratio
3. Margin Requirement
4. Moral Suasion
5. Bank Rate
Select the correct answer using the code given below:CorrectThe RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools control the extent of money supply by changing the CRR, or bank rate or open market operations.
IncorrectThe RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools control the extent of money supply by changing the CRR, or bank rate or open market operations.
- Question 34 of 49
34. Question
Category: NCERTWhich of the following can be considered as the likely effect if the RBI buys a government bond in the open market?
CorrectOpen Market Operations refers to buying and selling of bonds issued by the Government in the open market. When RBI buys a government bond in the open market; it pays for it by giving a cheque. This cheque increases the total amount of reserves in the economy and thus increases the money supply.
IncorrectOpen Market Operations refers to buying and selling of bonds issued by the Government in the open market. When RBI buys a government bond in the open market; it pays for it by giving a cheque. This cheque increases the total amount of reserves in the economy and thus increases the money supply.
- Question 35 of 49
35. Question
Category: NCERTIn the context of Indian Economy, which of the following measures can be adopted by controlling the inflation?
1. Reducing the Cash Reserve Ratio
2. Import of goods which have scare supply
3. Cuts in the excise and custom duties
Choose the correct answer using the code given below:CorrectReducing Cash Reserve Ratio will increase the money supply in the market and therefore, will further increase inflation.
IncorrectReducing Cash Reserve Ratio will increase the money supply in the market and therefore, will further increase inflation.
- Question 36 of 49
36. Question
Category: NCERTWith reference to the GDP deflator, consider the following statements:
1. It represents the ratio of GDP at current prices to GDP at constant prices and is published on a monthly basis.
2. GDP deflator covers only a fixed basket of goods and services.
Which of the statements given above is/are correct?CorrectThe GDP deflator is an economic metric that measures the impact of inflation on a country’s GDP by comparing nominal GDP to real GDP.
Consumer Price Index (CPI) is the index of prices of a given basket of commodities which are bought by the representative consumer. CPI is generally expressed in percentage terms as compared to a base year‘s prices.IncorrectThe GDP deflator is an economic metric that measures the impact of inflation on a country’s GDP by comparing nominal GDP to real GDP.
Consumer Price Index (CPI) is the index of prices of a given basket of commodities which are bought by the representative consumer. CPI is generally expressed in percentage terms as compared to a base year‘s prices. - Question 37 of 49
37. Question
Category: NCERTWhich of the following can be the probable impact if the Reserve Bank of India decides to cut down the repo rate?
1. A decline in the money supply in the economy
2. No significant changes in the lending rates
3. Beneficial for borrowers as EMIs will decrease
Select the correct answer using the code given below:CorrectIt is the rate at which Reserve Bank of India lends money to commercial banks in the event of any shortfall of funds. A decline in the repo rate can lead to the banks bringing down their lending rate which is beneficial for retail loan borrowers.
IncorrectIt is the rate at which Reserve Bank of India lends money to commercial banks in the event of any shortfall of funds. A decline in the repo rate can lead to the banks bringing down their lending rate which is beneficial for retail loan borrowers.
- Question 38 of 49
38. Question
Category: NCERTWhich of the following statements best describes the concept of ‘Transfer Pricing’?
CorrectTransfer pricing happens whenever two subsidiary companies that are part of the same multinational group, trade with each other.
IncorrectTransfer pricing happens whenever two subsidiary companies that are part of the same multinational group, trade with each other.
- Question 39 of 49
39. Question
Category: NCERTWhich of the following components are included in the Balance of Payment record of a country?
1. Foreign Direct Investment
2. Trade in goods and services
3. Transfer Payments
4. NRI Deposits
5. External Commercial BorrowingsSelect the correct answer using the codes given below:
CorrectBalance of Payments & Its Components:
Current Account includes
- The balance of trade (i.e. Export and import of goods)
- The balance of services
- Remittances
- Transfer Payments
Capital Account includes:
- Investment (i.e. FDI and FII)
- Borrowings (External Commercial Borrowings, sovereign loans)
- NRI Deposits
IncorrectBalance of Payments & Its Components:
Current Account includes
- The balance of trade (i.e. Export and import of goods)
- The balance of services
- Remittances
- Transfer Payments
Capital Account includes:
- Investment (i.e. FDI and FII)
- Borrowings (External Commercial Borrowings, sovereign loans)
- NRI Deposits
- Question 40 of 49
40. Question
Category: NCERTWith reference to the White Label ATMs, consider the following statements:
1. These ATMs are owned by a bank but the ATM operation is generally outsourced to a third party.
2. White Label ATMs have the branding of sponsor bank.
Which of the statements given above is/are correct?CorrectAutomated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called “White Label ATMs” (WLAs). Non-bank entities incorporated in India under the Companies Act 1956 are allowed to operate WLAs.
IncorrectAutomated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called “White Label ATMs” (WLAs). Non-bank entities incorporated in India under the Companies Act 1956 are allowed to operate WLAs.
- Question 41 of 49
41. Question
Category: NCERTDuring colonial period, which of the following is/are mainly exported from India?
1. Sugar
2. Woollen clothes
3. Cotton
4. Indigo
5. Light machinery
Choose the correct answer using the code given below.CorrectIndia was importer of finished consumer goods like woollen clothes, cotton, silk, and capital goods like light machinery manufactured in Britain.
IncorrectIndia was importer of finished consumer goods like woollen clothes, cotton, silk, and capital goods like light machinery manufactured in Britain.
- Question 42 of 49
42. Question
Category: NCERTWith reference to first phase of green revolution, consider the following statement.
1. The use of HYV seeds was restricted to the more affluent states such as Punjab, Bengal and Karnataka.
2. The use of HYV seeds primarily benefited the wheat growing regions only.Choose the correct statement using the code given below.
CorrectThe use of HYV seeds was restricted to the more affluent states such as Punjab, Andhra Pradesh and Tamil Nadu.
IncorrectThe use of HYV seeds was restricted to the more affluent states such as Punjab, Andhra Pradesh and Tamil Nadu.
- Question 43 of 49
43. Question
Category: NCERTWhich of the following are correctly matched?
1. Chronic poor – Regularly move in and out of poverty line
2. Churning poor – Always below poverty line
3. Transient poor – Mostly above poverty line
Choose the correct answer using the code given below.Correct1. Chronic poor – Always below poverty line
2. Churning poor – Regularly move in and out of poverty line
3. Transient poor – The occasionally poor who are rich most of the timeIncorrect1. Chronic poor – Always below poverty line
2. Churning poor – Regularly move in and out of poverty line
3. Transient poor – The occasionally poor who are rich most of the time - Question 44 of 49
44. Question
Category: NCERTWhich of the following statement is incorrect about Poverty?
1. Relative poverty is a state of being in which a person can mobilize enough resources to arrange for minimum means of the of subsistence.
2. Absolute poverty is a state in which a person is not in a position to enjoy these comforts of life which are normally enjoyed by large number of persons in a society.
Choose the correct answer using the code given below.CorrectAbsolute poverty is a state of being in which a person can mobilize enough resources to arrange for minimum means of the of subsistence.
Relative poverty is a state in which a person is not in a position to enjoy these comforts of life which are normally enjoyed by large number of persons in a society.IncorrectAbsolute poverty is a state of being in which a person can mobilize enough resources to arrange for minimum means of the of subsistence.
Relative poverty is a state in which a person is not in a position to enjoy these comforts of life which are normally enjoyed by large number of persons in a society. - Question 45 of 49
45. Question
Category: NCERTConsider the following statement about Human Development Index (HDI).
- HDI is a statistical tool used to measure a country’s overall achievement in its social dimension only.
- It was developed by Pakistani economist Mahbub-ul Haq.
- Every year United National Development Program ranked countries based on the HDI report released in their annual report.
- The ranking of countries is based on three indicators.
Choose the correct statement using the code given below.
CorrectThe Human Development Index (HDI) is a composite statistic used to measure a country’s overall achievement in key dimensions of human development:
- Health: Assessed by life expectancy at birth, reflecting the ability to live a long and healthy life.
- Education: Measured by both mean years of schooling for adults and expected years of schooling for children.
- Standard of Living: Evaluated using gross national income (GNI) per capita, adjusted for purchasing power parity.
IncorrectThe Human Development Index (HDI) is a composite statistic used to measure a country’s overall achievement in key dimensions of human development:
- Health: Assessed by life expectancy at birth, reflecting the ability to live a long and healthy life.
- Education: Measured by both mean years of schooling for adults and expected years of schooling for children.
- Standard of Living: Evaluated using gross national income (GNI) per capita, adjusted for purchasing power parity.
- Question 46 of 49
46. Question
Category: NCERTConsider the following statement with reference to horticulture.
1. Horticulture sector contributes nearly one-third of the value of agriculture output.
2. Only 5 per cent of Gross Domestic Product of India.
3. India is the largest producer of fruits and vegetables.
Choose the incorrect statement using the code given below.
CorrectIndia ranks 2nd globally in fruit and vegetable production after China.
Horticulture contributes six per cent of Gross Domestic Product of India.
IncorrectIndia ranks 2nd globally in fruit and vegetable production after China.
Horticulture contributes six per cent of Gross Domestic Product of India.
- Question 47 of 49
47. Question
Category: NCERTConsider the following statements about organic farming.
- India ranks first in number of organic farmers.
- Organic produce have more blemishes and a shorter shelf life than sprayed produce.
- Organically grown food has more nutritional value than chemical farming.
- The yields from organic farming are higher than modern agricultural farming.
Choose the correct statement using the code given below.
CorrectIndia ranks 1st globally in number of organic producers and 6th in organic agricultural land.
IncorrectIndia ranks 1st globally in number of organic producers and 6th in organic agricultural land.
- Question 48 of 49
48. Question
Category: NCERTWhich of the following are not correctly matched?
- Frictional unemployment – Rises during recessions and declines with economic growth.
- Structural unemployment – Arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
- Seasonal Unemployment – Occurs during certain seasons of the year
Choose the correct answer using the code given below.
CorrectFrictional unemployment refers to the time lag between the jobs when an individual is searching for a new job or is switching between the jobs.
Cyclical unemployment rises during recessions and declines with economic growth.
IncorrectFrictional unemployment refers to the time lag between the jobs when an individual is searching for a new job or is switching between the jobs.
Cyclical unemployment rises during recessions and declines with economic growth.
- Question 49 of 49
49. Question
Category: NCERTWhich of the following services rendered under micro-finance?
1. Credit facilities
2. Savings facilities
3. Insurance facilities
4. Fund Transfer facilities
Choose the correct answer using the codes given below.CorrectMicrofinance refers to small, collateral-free loans and financial services provided to low-income individuals or groups who lack access to traditional banking. It includes:
- Microcredit: Small loans for income-generating activities
- Microsavings: Low-deposit savings accounts
- Microinsurance: Affordable insurance for health, crops, or assets
- Remittance Services: Money transfer facilities
The Reserve Bank of India (RBI) defines microfinance as loans to households with annual income up to ₹3 lakh.
IncorrectMicrofinance refers to small, collateral-free loans and financial services provided to low-income individuals or groups who lack access to traditional banking. It includes:
- Microcredit: Small loans for income-generating activities
- Microsavings: Low-deposit savings accounts
- Microinsurance: Affordable insurance for health, crops, or assets
- Remittance Services: Money transfer facilities
The Reserve Bank of India (RBI) defines microfinance as loans to households with annual income up to ₹3 lakh.