IAS P. T.

Workbook

By S.K. Mishra, IAS (Retd.) & Manoj K. Jha

INDIAN ECONOMY BASICS

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 1 & 3
(c) Only 2 & 3
(d) All of the above

GS

SC

2. Consider the following definition of urban area

according to Indian census.
1. minimum population of 5000.
2. at least seventy five percent of all working
population engaged is nonagricultural
pursuits.
3. a density of population of at least 400
persons per square kilometer.
4. such urban settlement are also known as
census towns.
5. all other places with a municipality,
cooperation, cantonment board etc. are
regarded as urban area.
Which of the above statements are correct?
(a) Only 1, 2 & 3
(b) Only 2, 3, 4 & 5
(c) Only 1, 3, 4 & 5 (d) All of the above

3. Indian Parliament accepted in December, 1954,

the socialistic pattern of society as the objective
of social and economic policy. Industrial policy,
as other policies, must therefore, be governed
by these principles and directions. Which of
the following is not true about the Industrial
Policy 1956?
1. ScheduleA of Industrial Policy Resolution
1956 proposed that all new industrial units
in the first category, save where their
establishment in the private sector has
IAS P.T. WORKBOOK

already been approved, will be sent only

by the State.
2. Industries in the second category will be
those listed in ScheduleB. With a view to
accelerating their future development, the
State will increasingly establish new
undertakings in these industries. At the
same time, private enterprise will also have
the opportunity to develop in this field,
either on its own or with State
participation.
3. The third category C contained all the
remaining industries where industrial
development will be undertaken ordinarily
through the initiative and enterprise of the
private sector, though it will be open to
the State to start any industry even in this
category.
4. Industrial undertakings in the private sector
were not necessarily required to fit into the
framework of the social and economic
policy of the State and they would not be
subject to control and regulate in terms of
the Industries (Development and
Regulation) Act and other relevant
legislation.

OR
E

1. Consider the following statements.

1. Participatory Notes are derivative
instruments
2. They are used by Foreign Institutional
Investors (FIIs) who are registered with
SEBI.
3. They are used on Indian shares, but at a
location outside India.

Select the correct code:

(a) Only 2
(b) Only 2 & 4
(c) Only 4
(d) Only 3
4. Consider the following statements about the
National Manufacturing Policy (NMP).
1. The policy aims to create 100 million
additional jobs over the next decade.
2. National Investment and Manufacturing
Zones (NIMZs) has been accorded with
benefits like exemption from capital gains
tax, simplified procedures and easier exit
norms.
3. The policy aims to raise the share of
manufacturing to 25 percent of GDP by
2022.

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above
5. Consider the following statements about the
Fiscal Policy.
1. Fiscal policy is the use of government
spending and taxation to influence the
economy.
2. The most immediate effect of fiscal policy
is to change the aggregate demand for
goods and services.
3. Fiscal policy is said to be loose or
expansionary when revenue is higher than
spending.

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above
9. Consider the following statements in the context
of instruments of Money Market Management:
1. A certificate of deposits is a time deposit,
commonly offered to consumers by banks,
thrift institutions, and credit unions and
which has a specific, fixed term usually,
and a fixed interest rate.
2. Commercial papers is a moneymarket
security issued (sold) by large corporations
to get money to meet short term debt
obligations, and is only backed by an
issuing bank or corporations promise to
pay the face amount on the maturity date
specified on the note.
3. Treasury bills can be purchased by any one
(including individuals) except State govt.
which are issued by RBI and sold through
fortnightly or monthly auctions at varying
discount rate depending upon the bids.

OR
E

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

8. Consider the following statements about the

Balance Of Payments (BOP).
1. Balance of payments accounts are an
accounting record of all monetary
transactions between a country and the rest
of the world.
2. Balance of payments data is concerned
with actual payments made and received
by an economy.
3. Balance of payments also includes financial
claims on and liabilities to the rest of the
world and transfers such as gifts.

GS

SC

6. Consider the following statements.

1. Gross Domestic Product (GDP), measures
the output of goods and services produced
within the geographical boundary of a
nation regardless of the residence of that
labour or owner of capital.
2. Gross National Product (GNP) is total
output of goods and services produced by
residents of a nation regardless of where
they live and work or where they own
capital.
Which of the above statements is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

7. Consider the following statements about

unemployment:
1. Cyclical unemployment occurs when there
is not enough aggregate demand in the
economy to provide jobs for everyone who
wants to work.
2. Frictional unemployment occurs when a
labour market is unable to provide jobs for
everyone who wants one because there is
a mismatch between the skills of workers
and skills needed for jobs.
Which of the above statements is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

Which of the above statements are correct?

(a) All 1, 2 & 3
(b) Only 1 & 2
(c) Only 2 & 3
(d) Only 1 & 3
10. Consider the following statements about the
Government debt.
1. Government debt is one method of
financing government operations.
2. Government usually borrow by issuing
securities, government bonds and bills.
3. Government debt is an indirect debt of the
taxpayers.
IAS P.T. WORKBOOK

11. Consider the following statements about the

linked exchange rate system.
1. A linked exchange rate system is a type of
exchange rate regime to link the exchange
rate of a currency to another.
2. In this system government or central bank
actively interferes in the foreign exchange
market by controlling supply and demand
of the currency.
Which of the above statements is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 1 & 3
(c) Only 2 & 3
(d) All of the above

15.Which of the following provides correct definition

of GNP deflator?
(a) The ratio of GNP at current prices to the
GNP at constant prices.
(b) GNP at current prices divided by Wholesale
Price Index.
(c) GNP of current year divided by GNP of
the previous year.
(d) None of the above.

SC

12. Consider the following statements about Fiscal

Deficit.
1. When a governments total expenditures
exceed the revenue that it generates
including money from borrowings it is
called fiscal deficit.
2. A large fiscal deficit leads to a weaker
national currency.

14. Consider the following statements.

1. Current Account Deficit is a measurement
of a countrys trade in which the value of
goods and services it imports exceeds the
value of goods and services it exports.
2. The current account also includes net
income, such as interest and dividends, as
well as transfers, such as foreign aid.
3. The current account is a calculation of a
countrys foreign transactions, and along
with the capital account is a component of
a countrys balance of payment.

OR
E

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

GS

Which of the above statements is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

13. Which of the following is true about inflation?

1. It is a measure of rise in the general price
level or equivalently average level of prices
of all the goods and services in an
economy.
2. It is often viewed as a reduction in the
purchasing power of money and it does
not necessarily mean that the prices of all
the goods and services in an economy rise.
3. In an inflationary situation, the average
level of prices rise with some items showing
excessive rise while others may not follow
suit.
4. A macroeconomic policy measure mostly
used by the countries across the world, to
alleviate the adverse effects of inflation is
indexation.
Select the correct code:
(a) Only 1 & 2
(b) Only 2 & 4
(c) Only 1 & 3
(d) All of the above
IAS P.T. WORKBOOK

16.Consider the following statements about Lorenz

curve.
1. It represents inequality of the wealth
distribution.
2. Lorenz curve always starts at (0, 0) and
ends at (1, 1).
Select the correct code:
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2
17. Misery Index is defined as:
(1) Inflation plus rate of unemployment
(2) Sometimes also as inflation plus rate of
unemployment plus rate of interest.
(3) Inflation as measured by Consumer Price
Index only
(4) Inflation as measured by Wholesale Price
Index only

Select the correct code:

(a) Only 1 & 2
(b) Only 2 & 4
(c) Only 1 & 3
(d) All of the above
18.Consider the following statements about the
Laffer Curve.
1. It shows the relationship between tax rates
and tax revenue collected by governments.
2. According to it, as taxes increase from low
levels, tax revenue collected by the
government also increases.
3. It also shows that tax rates increasing after
a certain point would cause people not to
work as hard or not at all, thereby
reducing tax revenue.

Select the correct code:

(a) Only 1 & 4
(b) Only 1, 3 & 4
(c) Only 2 & 3
(d) All of the above
21. Consider the following statements about
Stagflation.
1. Stagflation is a condition of slow economic
growth and relatively high unemployment
accompanied by a rise in prices, or
inflation.
2. Stagflation can result from inappropriate
macroeconomic policies.
Select the correct code:
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

OR
E

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

4. With rising living standards and accelerated

growth, a purely calorie based norm is no
longer regarded as appropriate.

GS

SC

19. Consider the following statements about the

Open Market Operations also known as OMO.
1. Open Market Operations include buying
and selling of government securities in the
open market.
2. Open market operations are the principal
tools of monetary policy.
3. Central government has the main
responsibility for implementing Open
market operations.
Which of the above statements are correct?
(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above
20. Which of the following is/are true about
measurement of poverty in India?
1. Official estimates of poverty in India have
hitherto been made by the Planning
Commission on the basis of the
methodology that was recommended by
the Lakdawala Committee (1993).
2. The official poverty lines presently in use
are based on the per capita consumption
level, which in 197374, was associated
with a commodity bundle that yielded a
specified level of calories.
3. The original link with calories was broken
over time, mainly because consumption
patterns have changed since 197374.
4

22. Consider the following statements in the context

of financial markets and intermediation:
1. Equity derivative is a derivative instrument
with underlying assets based on equity
securities whose value will fluctuate with
changes in its underlying assets equity,
which is usually measured by share price.
2. Currency futures are contracts to buy or
sell a specific underlying currency at a
specific time and specific price in the future,
are standardized in terms of delivery date,
amount and contract terms.
3. Options Contract is a type of Derivatives
Contract which gives the buyer/holder of
the contract the right (but not the
obligation) to buy/sell the underlying asset
at a predetermined price within or at end
of a specified period.
Which of the above statements are correct?
(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) Only 1, 2 & 3
23. Consider the following statements about
Followon Public Offer (FPO)?
1. It is an issuing of shares to investors by a
public company that is already listed on
an exchange.
2. Followon Public Offer is both dilutive and
Nondilutive types.
3. An FPO is essentially a stock issue of
supplementary shares.
IAS P.T. WORKBOOK

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 1 & 3
(c) Only 2 & 3
(d) All of the above
24. Consider the following statements about Special
Drawing Rights (SDR).
1. SDRs also called paper gold are
international financing instrument created
by the International Monetary Fund (IMF).
2. SDR is backed by currency or precious
metal.

27. Consider the following statements about the

roles and responsibilities of Bharat Bill Payment
System (BBPS) as suggested by the Umesh Bellur
headed GIRO Advisory Group.
1. It will be a notforprofit organization
registered under the Companies Act 1956.
2. It will be responsible for carrying out
payment, clearing and settlement of the
transactions carried out at various
BBPOUs
3. BBPS shall act as the final dispute
resolution escalation point.

Which of the above statements is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

OR
E

28. Consider the following statements about the

Bridge Loan.
1. It is a shortterm (usually less than a year)
loan taken to cover the period between the
expiry of one loan and the beginning of
another loan.
2. Bridge loan is arranged mostly to
accomplish a purchase before the borrower
gets payment from a sale.
3. Bridge loans are normally more cheaper
than normal financing,.

SC

25. The NEER and REER indices are used as

indicators of external competitiveness of the
country over a period of time. Consider the
following statements in this context:
1. REER is the weighted average of bilateral
nominal exchange rates of the home
currency in terms of foreign currencies.
2. NEER is defined as a weighted average of
nominal exchange rates, adjusted for home
and foreign country relative price
differentials.

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

GS

Which of the above statements is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2

26. Capital inflows can be classified by instrument

(debt or equity) and maturity (shortterm or
long term). Consider the following statements
in the same context:
1. Foreign investment comprising FDI and
portfolio investment represents nondebt
liabilities, while loans (external assistance,
ECBs, and trade credit) and banking capital
including NRI deposits are debt liabilities.
2. In India, portfolio is preferred over FDI
flows as the portfolio flows tend to be more
stable than FDI and other forms of capital
flows.
3. Rupeedenominated debt is preferred over
foreign currency debt while medium and
longterm debt is preferred over shortterm.
Which of the above statements is/are correct?
(a) Only 1
(b) Only 2 & 3
(c) Only 1 & 3
(d) All 1, 2 & 3
IAS P.T. WORKBOOK

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above
29. The cheap and dear money policy relate to
changes in
(a) REPO rate
(b) Bank rate
(c) Both REPO rate and reverse REPO rate
(d) Both REPO rate and Bank rate
30. Consider the following statements about the
Foreign Portfolio Investors (FPIs), a newly
created class for overseas investors.
1. FPIs will be allowed to invest only in listed
nonconvertible debentures or bonds issued
by governments in the infrastructure sector.

2. FPIs are barred from buying shortterm

government securities.
Select the correct code:
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

34. What are sovereign bonds?

(a) Sovereign bonds are bonds held by
sovereign countries which can be traded
as foreign exchange.
(b) Sovereign bonds are bonds floated by
sovereign countries which can be traded
as foreign exchange.
(c) Sovereign bonds are bonds floated by some
strong industrialized countries which are
bought by other countries and are
considered akin to foreign exchange
reserves.
(d) Sovereign bonds are bonds floated by
sovereign countries in any currency which
can be freely traded in the open market.

OR
E

31.Consider the following statements about the

Government bonds or dated securities.
1. These are long term Government securities
with original maturity of one year or more.
2. Government securities are issued via
Auctions conducted by the Reserve Bank
of India.
3. The Short term Government securities are
called Treasury bills with maturities of less
than one year.

(d) All of the above

Which of the above statements are correct?

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

GS

SC

32. Consider the following statements about Ways

and Means Advances (WMA).
1. RBI provides Ways and Means Advances
(WMA) to the States in order to assist them
to overcome the temporary mismatches in
the cash flow of their receipts and
payments.
2. Time Period of WMA facility is maximum
90 days.
Select the correct code:
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2
33. Consider the following statements about the
new corporate governance norms approved by
SEBI.
1. It has restricted independent directors to
serve as directors on a maximum of 7 listed
companies.
2. If a person is a whole time director in a
listed company then also he can serve on
seven boards.
3. There should be at least one woman
director on the Board of the company.
Which of the
(a) Only 1 &
(b) Only 1 &
(c) Only 2 &
6

above statements are correct?

2
3
3

35. Recently the Bombay Stock Exchange (BSE)

launched an Institutional Trading Platform
(ITP) to help Small and Medium Enterprises
(SMEs) and startup companies. Which of the
following is correct in this context?
1. It will help Small and Medium Enterprises
(SMEs) and startup companies to list on
the bourses without an Initial Public Offer
(IPO).
2. It will facilitate capital raising by small and
medium enterprises.
3. It will provide easier entry and exit options
for investors viz. angel investors, venture
capital funds, and private equity players.
Which of the above statements are correct?
(a) Only 1 & 2
(b) Only 1 & 3
(c) Only 2 & 3
(d) All of the above
36. Consider the following statements about
Financial Action Task Force (FATF).
1. It is a Parisbased multidisciplinary and
intergovernmental body whose purpose is
the development and promotion of national
and international policies to combat money
laundering and terrorist financing.
2. It was founded at the 1989 OECD
Economic Summit.
Select the correct code:
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2
IAS P.T. WORKBOOK

37. Non convertible debentures are:

(a) Debt instruments which acquire equity
status only at the investors option.
(b) Debt instruments which acquire equity
status only with the permission of Registrar
of Companies.
(c) Debt instruments which acquire equity
status only on maturity.
(d) Debt instruments which retain their debt
character and cannot acquire equity status.

41. Which of the following is not true about services

sector?
(a) National Accounts classification of the
services sector incorporates trade, hotels,
and restaurants; transport, storage, and
communication; financing, insurance, real
estate, and business services; and
community, social, and personal services.
(b) Construction sector is not included in
service sector category in the National
Accounts classification.
(c) Only Pucca construction is included in
service sector category in the National
Accounts classification.
(d) In World Trade Organization (WTO) and
Reserve Bank of India (RBI) classifications,
construction is also included.

SC

Which of the above statements are correct?

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

Select the correct code:

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

OR
E

38. As per RBI guidelines, which of the following

is covered under Nonperforming Assets
(NPA)?
1. Non performing asset (NPA) is a loan or
an advance where Interest and/ or
installment of principal remain overdue for
a period of more than a year in respect of
a term loan.
2. It is a loan or an advance where the
account remains out of order in respect
of an Overdraft/Cash Credit.

1. Foreign government and government

related foreign investors have been
included in categoryI which has lowest
risk.
2. Qualified Foreign Investors (QFIs) has been
included in categoryIII.

GS

39. The Rashtriya Krishi Vikas Yojana (RKVY)?

1. To incentivize the states so as to increase
public investment in Agriculture and allied
sectors.
2. To provide flexibility and autonomy to
states is in the process of planning and
executing Agriculture and allied sector
schemes.
3. To ensure the preparation of agriculture
plans for the districts and the states based
on agroclimatic conditions availability of
technology and natural resources.
4. To achieve the goal of maximizing the yield
gaps in important crops, through focused
interventions.
Select the correct code:
(a) Only 1, 2 & 3
(b) Only 1, 3 & 4
(c) Only 2, 3 & 4
(d) Only 1, 2 & 4
40. As per their risk profiles, Foreign Portfolio
Investors (FPIs) are divided into three categories.
Consider the following statements in this
context..
IAS P.T. WORKBOOK

42. Consider the following statements

1. The components of GDI includes female
live expectancy, female adult literacy and
gross enrolment ratio as well as female per
capita income.
2. The greater the difference between HDI and
GDI the greater is the gender equality.
Which of the above statements are incorrect?
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2
43. The Government is extremely concerned about
the old age income security of the working poor
and is focused on encouraging and enabling
them to join the NPS. Consider the following
statements in the context of NPS:
1. The NPS was opened up for all citizens in
India to join on a voluntary basis.
2. Swavalamban Scheme is a cocontributory
pension scheme whereby the central
government would contribute a sum of
Rs.1,000 per annum in each NPS account

opened having a saving of Rs. 1,000 to

Rs.12,000 per annum.
Which of the above statements is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2

Which of the above statements is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2
47. Consider the following statements about the
concept of money supply calculated by RBI:
1. M1 includes currency with public as well
as deposits (time and demand) with the
banks.
2. M3 which also includes post office deposits
is known as broad money.

SC

OR
E

44. Consider the following statements about the

objectives and strategies of the 12th Five Year
Plans.
1. Its strategy for growth depends crucially
on productivity gains as one of the key
drivers of growth.
2. Development cannot take place without
additional energy and the energy
requirement of development will have to
be reconciled with the objective of
protection of environment.
3. Eliminate gender and social gap in school
enrolment and between SCs, STs, Muslims
and the rest of the population by the end
of the plan.
4. To connect all villages with all weather
roads by the end of the Twelfth Plan.
5. To complete eastern and western Dedicated
Freight corridors by the end of the plan.

46. Consider the following statements.

1. Agreement on Agriculture is a multilateral
trade negotiation under the aegis of World
Bank.
2. The agreement is concerned with reduction
in subsidies given by different countries to
their agricultural sector.

GS

Which of the above statements are incorrect?

(a) Only 1, 2 & 3
(b) Only 2, 3 & 4
(c) Only 3, 4 & 5
(d) None of the above
45. The UN Conference on Sustainable
Development (UNCSD) or Earth summit 2012,
was the third international conference on
sustainable development aimed at reconciling
the economic and environmental goals of the
global community. The conferences objectives
include:
1. securing renewed political commitment for
sustainable development.
2. assessing the progress and implementation
gaps in meeting the previous commitments.
3. addressing new and emerging challenges.
4. they also agreed on Long term Cooperative
Action LCA.
Which of the above statements are correct?
(a) Only 1, 2 & 3
(b) Only 2 & 3
(c) Only 3 & 4
(d) All of the above
8

Which of the above statements is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

48. Consider the following statements.

1. RBI deposits consists of banks deposits
with RBI as well as deposits of some
individual people.
2. Reserve money includes the deposits with
RBI also.
Which of the above statements is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

49. Reserve Bank of India (RBI) issued the guidelines

for licensing of new private sector banks.
Consider the following statements and choose
the correct options
1. Entities both from private and public sector
shall be eligible to set up a bank through a
whollyowned nonoperative financial
holding company (NOFHC).
2. The NOFHC will be registered as a non
banking finance company with the RBI.
3. The new banks must meet the criteria of
having 50% of its branches in unbanked
rural areas with population upto 9,999.
4. New bank should achieve priority sector
lending target of 40%.
IAS P.T. WORKBOOK

Select the correct code:

(a) Only 1, 2 & 4
(b) Only 1, 2 & 3
(c) Only 2, 3 & 4
(d) All of the above

OR
E

53. Consider the following statements about the

Cooperative Banks in India.
1. They are required to assist the weaker
sections and agricultural sector.
2. They are organized under the state
governments laws.
3. They have access to liberal financial
assistance from NABARD
4. They are organized in a tiered structure.

SC

50. Consider the following statements.

1. The QFIs would be individuals, groups or
associations residing in a foreign country
that is compliant with the Financial Action
Task Force (FATF) and that is a signatory
to The International Organisation of
Securities Commissionss (IOSCO)
multilateral MoU.
2. The RBI would grant general permission
to the QFIs to invest in the Portfolio
Investment Scheme (PIS) route similar to
FIIs.
3. The individual and aggregate investment
limit for QFIs shall be 25 per cent and 50
per cent respectively of the paidup capital
of an Indian company.
4. The QFIs shall be allowed to invest through
the SEBIregistered Qualified Depository
Participant (DP), with the QFI required to
open only one demat account and a trading
account with any of the qualified DP and
make purchase and sale of equities through
that DP only.

(b) FERA was given as unset clause of one

year till 31 st May, 2002 to enable
Enforcement Directorate to complete the
investigation of pending issues.
(c) Under FEMA, violation of foreign exchange
rules has ceased to be a criminal offence.
(d) As per the new dispensation, Enforcement
Directorate can arrest and prosecute the
people for the violation of foreign exchange
rules.

GS

Which of the above statements are correct?

(a) Only 1, 2 & 3
(b) Only 1, 2 & 4
(c) Only 3 & 4
(d) All 1, 2, 3 & 4

51. Managed currency is said to be the

(a) Currency, the exchange rate of which can
be managed easily.
(b) Currency, the intrinsic value of which can
be managed by increasing or decreasing
its supply.
(c) The government of the country intervenes
in some way or the other to influence the
prevailing rate of exchange.
(d) Quota of currency to be managed by the
Central Bank at times of deflation.
52. Which one of the following statements is correct
with reference to FEMA in India?
(a) The Foreign Exchange Regulation Act
(FERA) was replaced by Foreign Exchange
Management Act in the year 2001.
IAS P.T. WORKBOOK

Which of the above statements are correct?

(a) 1, 3 & 4 are correct
(b) 1, 2 & 4 are correct
(c) 1 & 3 are correct
(d) All of the above are correct

54. The Net Asset Value (NAV) of the units of a

mutual fund serves as:
(a) Market price of the unit
(b) Value of assets of the mutual fund
(c) Face value of the unit
(d) Price at which the units are offered to public
through NFO.
55. Which of the following facts can effect the value
of sensex?
1. GDP growth rate
2. Foreign investment
3. Political stability
4. Literacy rate
Select the correct code:
(a) Only 1, 2 & 4
(b) Only 1, 2 & 3
(c) All of the above (d) None of the above
56. Which of the following organisation facilitate
demat trading in the stock exchanges?
1. National Securities Depository Limited
2. National Informatics Centre

Select the correct code:

(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
57. The Phillips curve is the schedule showing the
relationship between:
(a) aggregate supply and demand
(b) total savings and investment
(c) the rate of unemployment and rate of
inflation
(d) demand for and supply of loanable funds

61. Consider the following statements related to

Basel III norms and select the correct answer:
1. Basel III is a set of reform measures,
developed by the Basel Committee to
strengthen the regulation, supervision and
risk management of the banking sector.
2. The highest form of lossabsorbing capital
known as common equity has been raised
under Basel III from 2% to 4.5% of total
riskweighted assets.
3. Banks will be required to hold a capital
conservation buffer of 2.5%.
4. Deadline for implementation of Basel III in
India is 2016.

OR
E

58. The index of a stock exchange measures the

change in:
(a) Size and performance of the selected
companies.
(b) Share prices of all the companies listed in
the stock exchange.
(c) Value of real assets of the selected
companies.
(d) Market capitalization of the selected
companies.

Which of the above statements are correct?

(a) Only 1
(b) Only 2
(c) Only 1 & 3
(d) Only 2 & 3

GS

SC

59. Which of the following statements define the

difference between NEFT and RTGS?
1. NEFT facilitate transfer of funds from bank
branch to other bank branch of the same
bank whereas RTGS allows transfer of
funds from one branch to any other bank
branch.
2. NEFT allows transfer of funds of
individuals only whereas RTGS allows
transfer of funds of individuals, firms and
corporate.
3. The minimum amount to be remitted
through RTGS is 2 lakh whereas there is
no minimum amount in NEFT.
Select the correct code:
(a) Only 1
(b) Only 2
(c) Only 3
(d) Only 1 & 3
60. Consider the following statements related to
nofrill savings account scheme launched by
RBI:
1. Nofrills savings account enables excluded
people to open a savings account thus lead
to financial inclusion.
2. Cheque book and ATM facilities are not
provided in nofrill savings account scheme.
3. Nofrill savings account scheme is provided
by public sector banks in rural areas only.
10

Select the correct code:

(a) Only 1, 2 & 3
(b) Only 2, 3 & 4
(c) Only 1, 3 & 4
(d) All of the above

62. Consider the following statements:

1. Current accounts deposits are payable on
demand but can be drawn upon by cheque
without any restriction.
2. Fixed Account Deposits are not payable
on demand and do not enjoy cheque
facilities.
3. Savings Accounts Deposits are payable on
demand and also withdrawable by cheque,
but with certain restrictions on the number
of cheques issued in a period of time.
Which of the above statements are correct?
(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above
63. Consider the following statements related to
concept of Non Resident Indian and select the
correct answer:
1. It is an economic concept and refers only
to the tax status of an person who has not
resided in India for a specified period for
the purposes of the Income Tax Act.
2. For the purposes of the Incometax Act,
residence in India requires stay in India
of at least 182 days in a calendar year or
365 days spread out over four consecutive
years.

IAS P.T. WORKBOOK

Select the correct code:

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above
64. Consider the following statements related to
merit and demerit goods provided by
government?
1. Merit goods are goods that would be
provided in a free market system, but would
almost certainly be underprovided.
2. Demerit goods are goods whose cost fall
on people other than those consuming the
goods.
3. Example of merit and demerit goods
include: education and cigarette
respectively.

Select the correct code:

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

68.A strong intellectual property regime is a

prerequisite for creation of global IP from India.
It has also become a requirement under WTO.
Which of the following steps need to be taken
in this context?
1. Improve IP management and protection
mechanisms.
2. Develop global information database on IPs
accorded.
3. Strengthen and modernise the process of
patent examination and according patents.

SC

Which of the above statements are correct?

(a) Only 1 & 3
(b) Only 2 & 3
(c) Only 1 & 2
(d) All of the above

67. Consider the following statements related to

13th finance commission recommendations and
select the correct answer:
1. The share of states in net proceeds of
shareable central taxes shall be 32 per cent
in each of the financial years from 201011
to 201415.
2. Local bodies should be transferred 2.28%
of the divisible pool of taxes.
3. State taxes should be divided between
states and local bodies.

OR
E

3. NRI are the citizens of India but their

economic interest lies in other countries.

GS

65. Consider the following statement about

Consolidated Fund of India:
1. The Consolidated Fund of India has been
established under Article 267 (1) of the
Constitution.
2. All revenues received by the Government
by way of taxes nonTax Revenues are
credited into the Consolidated Fund.
3. The fund is held on behalf of President by
the Cabinet Secretary.
Which of the above statements are correct?
(a) Only 1
(b) Only 2
(c) Only 1 & 3
(d) All of the above

66. Which of the following are correctly matched?

1. Different proceeds of taxes levied by the
government Revenue Account
2. Government borrowings from the Reserve
Bank and treasury bills Capital Account
3. Divestment of equity holding in public
sector enterprises Revenue Account
4. Market loans raised by the government
Capital Account
Select the correct code:
(a) Only 1 & 3
(b) Only 1 & 2
(c) Only 1, 2 & 4
(d) All of the above
IAS P.T. WORKBOOK

Select the correct code:

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above
69. Indian capital goods industry is facing severe
competition from Chinese companies over the
last few years. The major factors responsible
for increasing Chinese competitiveness are?
1. Artificially appreciated Chinese currency.
2. Much lower interest rates.
3. Simpler labour laws.
4. Tax advantages and subsidies given by the
Government.
Which of the above statements are correct?
(a) Only 1, 2 & 3
(b) Only 2, 3 & 4
(c) Only 1, 3 & 4
(d) All of the above

11

70. The present business regulatory environment

is seriously deficient for various reasons. Which
of the following are correct in this context?
1. Lack of coherence in business regulatory
governance across country.
2. Absence of national repository of business
regulations.
3. Ambiguous nature and vast scope of
business regulations.
Select the correct code:
(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

Which of the above statements is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2
74. Consider the following statements about
Minimum Alternate Tax.
1. The concept of MAT was introduced under
the Income Tax Act.
2. The intent to introduce MAT was to ensure
that no tax payer with substantial income
can avoid tax liability.

SC

OR
E

71. Which of the following are the key challenges

identified in 12th five year plan faced by Indian
industries?
1. Many segments of the industry, especially
MSMEs, have limited information and
access to risk capital for sourcing/
developing and internalizing new
technologies.
2. Absence of national agenda and policy
framework to support innovation.
3. The Indian Industry has not given sufficient
importance to the documentation of
knowledge and creation of IP.

73. Consider the following statements about Value

Added Tax VAT.
1. VAT is a type of consumption tax.
2. The amount of valueadded tax that the
user pays is the cost of the product, less
any of the costs of materials used in the
product that have already been taxed.

GS

Select the correct code:

(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

72. Policy interventions for MSMEs must be tailored

to their conditions. Government policies for
MSMEs should therefore help them improve
their technological capabilities by focusing on
which of the following steps.
1. Providing access to risk capital.
2. Improving Industry/research institute/
academia interaction, mostly in clusters
3. Stimulating demand/providing scale
through similar treatment in government
purchases.
Select the correct code:
(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

Which of the above statements is/are correct?:

(a) Only 1
(b) Only 2
(c) Both 1 & 2
(d) Neither 1 nor 2

75. Which of the following features about the Right

of Children to Free and Compulsory Education
Act (RTE Act) are correct?
1. Every child of the age 614 years shall have
a right to free and compulsory education
in a neighbourhood school till the
completion of elementary & secondary
education.
2. The appropriate government and the local
authority shall establish within such area
or limits of neighbourhood three years.
3. If shall be the duty of every guardian or
parent to admit or cause to be admitted to
his or her child or ward to an elementary
and secondary education in the
neighbourhood school.
4. No teacher shall engage himself or herself
in private tuition or private teaching
activity.
5. No school or person shall while admitting
a child, collect any capitation fee and
subject the child or his or her parent or
guardian to any screening procedure.
Select the correct code:
(a) Only 1, 2 & 3
(b) Only 3, 4 & 5
(c) Only 2, 4 & 5
(d) All of the above

12

IAS P.T. WORKBOOK