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Q.1) Economic survey 2017 mentioned about three main downside risks. From the below
select which one is not among them -
a) effects of demonetisation
b) poor targeting of subsidy
c) rising oil prices
d) eruption of trade tensions amongst the major countries, triggered by geo-politics or
currency movements
The three main downside risks highlighted by Economic Survey 2017 include - effects of
demonetisation, rising oil prices and eruption of trade tensions amongst the major countries,
triggered by geo-politics or currency movements.
Q.2) Recent economic survey has repeatedly highlighted about twin balance sheet problem.
Consider the following statements in regard to it:
1. Twin balance sheet problem include over-indebtedness in the corporate and public
sectors
2. The survey has made a case for establishment of a Public Sector Asset Rehabilitation
Agency (PARA)
3. Private investment remains weak because of the twin balance sheet problem
a) 1, 2 and 3
b) 1 and 3 only
c) 1 and 2 only
d) 2 and 3 only
Q.3) Consider the following and choose the right answer. Decline in interest rates -
Macroeconomic factors play a pivotal role in attracting foreign investment in the country.
Capital flow, which has reached the important level at the present day, is very important for
underdeveloped and developing countries to attain the development level by using them in
their investments. Portfolio flows to developing countries are extremely sensitive to interest
differentials. Money tends to flow to countries with high interest rates .
According to the theory of portfolio investment by Hymer (1976), foreign portfolio investors are
attracted by the high interest rate because it reduces the borrowing cost; foreign portfolio
investor will invest until the interest rate gets equal all over the world therefore it might be said
that foreign portfolio investment is affected by domestic interest.
a) 1, 2 and 3
b) 1 and 2
c) 2, 3 and 4
d) 1, 2, 3 and 4
Economic survey 2017 has enumerated about three main downside risks. Among them one of
the risk factor is rising oil prices. Geopolitics could take oil prices up further than forecast. The
ability of shale oil production to respond quickly should contain the risks of a sharp increase,
but even if prices rose merely to $60-65/barrel the Indian economy would nonetheless be
affected by way of reduced consumption; less room for public investment; and lower corporate
margins, further denting private investment. The scope for monetary easing might also narrow,
if higher oil prices stoked inflationary pressure.
Q.5) The term Helicopter Drop was used in Economic Survey. Consider the following in regard
to Helicopter Drop also called as helicopter money is a/an -
c) unconventional tool of monetary policy that involves printing large sums of money and
distributing it to the public in order to stimulate the economy.
d) sum amount of money deposited in the bank after demonetisation that must be repaid
on demand.
Q.6) Consider the following statements about the newly launched digital payments app called
BHIM:
a) 1, 2 and 3
b) 1 and 2 only
c) 2 and 3 only
d) 1 and 3 only
Bharat Interface for Money or BHIM is a digital payments solution app based on Unified
Payments Interface (UPI) from the National Payments Corporation of India (NPCI). If you have
signed up for UPI based payments on your respective bank account, which is also linked to your
mobile number, then youll be able to use the BHIM app to conduct digital transactions.
BHIM app is not a mobile wallet. In case of mobile wallets like Paytm or MobiKwik you store a
limited amount of money on the app, that can only be sent to someone who is using the same
wallet. Your friend, relative or even a merchant who youre trying to pay doesnt necessarily
need to be on the BHIM app. All they need is a bank account to receive the payment. (BHIM
also has options to transfer via IFSC, MMID as well for non-UPI banks).
IASbabas Economic Survey 2016-2017 - MCQs
The National Payments Corporation of India recently announced the launch of mobile
application for Aadhaar-based payments through Bharat Interface for Money (BHIM) app for
merchants.
The new service will allow customers to make purchases using their Aadhaar number linked
with their bank account.The transaction will require customers fingerprint for authentication.
Q.7) With reference to Aadhaar Merchant Pay, which was launched recently, which of the
statements given below is/are true?
a) 1 only
b) 2 only
c) Both 1 and 2
d) None
Aadhaar Merchant Pay, was launched recently aimed at the 350 million who do not have
phones. This enables anyone with just an Aadhaar number and a bank account to make a
merchant payment using his biometric identification. Aadhar Merchant Pay will soon be
integrated into BHIM and the necessary POS devices will soon be rolled out.
To infuse capital in state-run banks what Government is planning to sell off non financial
companies.
IASbabas Economic Survey 2016-2017 - MCQs
Q.9) What are the possible benefits implementing the transformational Goods and Services
Tax (GST)?
a) 1, 2 and 3 only
b) 2, 3, 4 and 5 only
c) 1, 2, 3 and 4 only
d) 1, 2, 3, 4 and 5
The GST will create a common Indian market, improve tax compliance and governance, and
boost investment and growth; it is also a bold new experiment in the governance of Indias
cooperative federalism. It will also lead to reduction in multiplicity of taxes, cascading and
double taxation and also black transactions.
Q.10) Which one of the following statements appropriately describes the fiscal stimulus?
Statement (b) best describes the fiscal stimulus, which is an intense affirmative action of the
Government to boost economic activity in the country.
IASbabas Economic Survey 2016-2017 - MCQs
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Quantitative Easing
It is an unconventional MP where a central bank purchases securities from the market
to lower interest rates.
It floods financial institutions with capital to increase liquidity.
Countercyclical policy
A countercyclical policy is a FP where the government promotes spending during
downturns and tightens credit during the inflationary periods.
Q.14) India is regarded as a country with Demographic Dividend. This is due to:
The working-age population is said to be persons in age group 20-64 years, as per UN
classification.
IASbabas Economic Survey 2016-2017 - MCQs
In India, it is 15-64 years. Usually India is regarded as a country with Demographic Dividend
because of its young working age population.
Q.15) Which one among the following sectors has attracted the highest foreign direct
investment inflows into India in the last 25 years?
a) Automobile industries
b) Computer services sector
c) Food processing
d) Special Economic Zones
Overall the telecommunication sector has been the highest FDI attracting sector of the Indian
Economy. But among the given options, Automobile industry had attracted highest FDI inflows.
Q.16) Which one of the following is likely to be the most inflationary in its effect?
The three option statements except (a) in the question are revolving around the refinancing the
budget deficit.
shortage of funds for investment in the private sector). Thus, the expansionary effect is
greater than when the deficit is financed by borrowing from the public. This new money
increases effective demand which, if there exist unemployed labour and idle production
capacity in the economy may raise employment and output.
Deficit financing undertaken for the purpose of building up useful capital during a short
period of time, is likely to improve productivity and ultimately, increase the supply of
consumption goods. And the increase in productivity can act as an anti-inflationary
measure.
Economic Survey 2016-17 has recommended for a centralised Public Sector Asset Rehabilitation
Agency (PARA) to tackle the problems of increasing Non-Performing Assets (NPAs) of the
banking system and declining credit and investment.
Q.18) According to the recent Economic Survey, for India, three external developments are of
significant consequence. They include:
a) 1, 2 and 3 only
b) 2, 3 and 4 only
c) 1, 3 and 4 only
IASbabas Economic Survey 2016-2017 - MCQs
d) 1, 2, 3 and 4
In the shortrun, the change in the outlook for global interest rates as a result of the US elections
and the implied change in expectations of US fiscal and monetary policy will impact
on Indias capital flows and exchange rates. Markets are factoring in a regime change in
advanced countries, especially US macroeconomic policy, with high expectations of fiscal
stimulus and unwavering exit from unconventional monetary policies. The end of the 20-year
bond rally and end to the corset of deflation and deflationary expectations are within sight.
Second, the medium-term political outlook for globalisation and in particular for the worlds
political carrying capacity for globalisation may have changed in the wake of recent
developments. In the short run a strong dollar and declining competitiveness might exacerbate
the lure of protectionist policies. These follow on ongoing trends documented widelyabout
stagnant or declining trade at the global level. This changed outlook will affect Indias export
and growth prospects.
Third, developments in the US, especially the rise of the dollar, will have implications for Chinas
currency and currency policy. If China is able to successfully re-balance its economy, the
spillover effects on India and the rest of the world will be positive. On, the other hand, further
declines in the yuan, even if dollar-induced, could interact with underlying vulnerabilities to
create disruptions in China that could have negative spillovers for India.
In sum, the political backlash against globalisation in advanced countries, and Chinas
difficulties in rebalancing its economy, could have major implications for Indias economic
prospects .They will need to be watched in the year and decade ahead.
1. UDAY or Ujwal Discom Assurance Yojna was launched to help loss-making discoms turn
around financially, with support from their State governments.
2. Under the scheme, States will take over three-fourths of the debt of their respective
discoms. The governments will then issue UDAY bonds to banks and other financial
institutions to raise money to pay off the banks.
a) 1 only
b) 2 only
IASbabas Economic Survey 2016-2017 - MCQs
c) Both
d) None
UDAY or Ujwal Discom Assurance Yojna was launched in November 2015 to help loss-making
discoms turn around financially, with support from their State governments.
Under the scheme, States will take over three-fourths of the debt of their respective discoms.
The governments will then issue UDAY bonds to banks and other financial institutions to raise
money to pay off the banks.
The remaining 25 per cent of the discom debt will be dealt within one of the two ways
conversion into lower interest rate loans by the lending banks or be funded by money raised
through discom bonds backed by State guarantee. Backing from the State will help bring down
the interest rate for the discoms.
In return for the bailout, the discoms have been given target dates (2017 to 2019) by which
they will have to meet efficiency parameters such as reduction in power lost through
transmission, theft and faulty metering, installing smart meters and implementing GIS
(geographic information system) mapping of loss making areas. States will also have to ensure
that power tariffs are revised regularly.
Q.20) Economic Survey has identified apparel and leather sector as an important sector which
can address which of the following challenges?
1. Job creation
2. Employment for women
3. Generate exports
4. Generate rapid economic growth
a) 1, 2 and 3
b) 1 and 2 only
c) 1 and 3 only
d) 1, 2, 3 and 4 only
Economic Survey has identified apparel and leather sector as an important sector which has
great potential and opportunities to -
IASbabas Economic Survey 2016-2017 - MCQs
Female labour intensity for apparel and leather industry is very high when compared to major
manufacturing sectors
Opportunity for women means that these could be vehicles for social transformation
Q.21) Arrange the following according to their major percentage share in worlds exports-GDP
ratio:
1. Merchandise exports/GDP
2. Service exports/GDP
3. Non-oil Export/GDP
a) 1-2-3
b) 3-1-2
c) 1-3-2
d) 2-3-1
Q.22) "Wiping every tear from every eye" vision was first given by -
a) Jawaharlal Nehru
b) Mahatma Gandhi
c) Ambedkar
d) Pandit Deendayal Upadhyaya
Q.23) Leather and footwear industry in India has great advantage due to -
The leather and footwear industry uses raw hides and skins of a number of animals like cattle,
buffalo etc. Leather made from cattle hides has greater global demand owing to its strength,
durability and superior quality.
IASbabas Economic Survey 2016-2017 - MCQs
However, despite having a large cattle population, Indias share of global cattle population and
exports of cattle hides is low and declining due to limited availability of cattle for slaughter
despite a large cattle population.
Q.24) With reference to Inflation in India, which among the following is true?
1. The headline inflation as measured by the Consumer Price Index (CPI) remained under
control for the third successive financial year.
2. CPI based Core inflation does not take food and fuel inflations into account while
Headline inflation consists of these two groups.
3. While the headline inflation has dropped sharply in the recent months, the CPI based
core inflation has remained a cause of concern so far during this fiscal year.
a) 2 only
b) 1 and 2 only
c) 1 and 3 only
d) 1, 2 and 3
Inflation:
The headline inflation as measured by the Consumer Price Index (CPI) remained under
control for the third successive financial year. The average CPI inflation declined to 4.9 per
cent in 2015-16 from 5.9 per cent in 2014-15.
The WPI inflation stood at 3.4 per cent in December 2016 and the average inflation was 2.9
per cent during April- December 2016.
CPI based Core inflation does not take food and fuel inflations into account while Headline
inflation consists of these two groups.
While the headline inflation has dropped sharply in the recent months, the CPI based core
inflation has remained a cause of concern so far during this fiscal year.
Q.25) Consider the below statements in regard to Monetary Management and Financial
Intermediation and choose the incorrect statement:
a) As per revised monetary policy framework, the Government do not fix inflation target in
consultation with the Reserve Bank.
b) The monetary policy is now managed by the Monetary Policy Committee.
IASbabas Economic Survey 2016-2017 - MCQs
c) As per the revised monetary policy framework, the Government has fixed the inflation
target of 4 per cent with tolerance level of +/- 2 per cent for the period 2016-21.
d) None of the above.
As per revised monetary policy framework, the Government has fixes inflation target in
consultation with the Reserve Bank.
The monetary policy is now managed by the Monetary Policy Committee as provided in the
amended Reserve Bank of India Act, 1934.
As per the revised monetary policy framework, the Government has fixed the inflation target of
4 per cent with tolerance level of +/- 2 per cent for the period beginning from 5th August, 2016
to March 31, 2021.
Q.26) In order to strengthen Corporate Bond Market, boost investor participation and market
liquidity in the corporate bond market, recently RBI has accepted many of the
recommendations of which one of the following committee -
a) Nayak Committee
b) Khan Committee
c) Urjit Patel Committee
d) Anil Kakodkar Committee
The RBI accepted many of the recommendations of the Khan Committee to boost investor
participation and market liquidity in the corporate bond market. They include:
Permitting commercial banks to issue rupee-denominated bonds overseas (masala bonds)
for their capital requirements and for financing infrastructure and affordable housing
Brokers registered with the SEBI and authorized as market makers in corporate bond
market permitted to undertake repo / reverse repo contracts in corporate debt securities
Banks allowed to increase the partial credit enhancement they provide for corporate bonds
to 50 per cent from 20 per cent.
Permitting primary dealers to act as market makers for government bonds, to give further
boost to government securities by making them more accessible to retail investors
Simplified procedures to ease access to the foreign exchange market for hedging in over the
counter (OTC) and exchange-traded currency derivatives up to a limit of US$30 million at
any given time.
For the first time since 2008 crisis, Net Foreign Portfolio Investments turned negative
because of higher returns in advanced economies.
IASbabas Economic Survey 2016-2017 - MCQs
1. Fertilizers
2. Refinery Products
3. Natural Gas
4. Iron
5. Cement
6. Electricity
a) 1,2,4,5 and 6
b) 1,2,3,4 and 6
c) 1,2,3,5 and 6
d) 1,2,3,4,5 and 6
There are eight core sector industries - Coal, Crude Oil, Natural Gas, Refinery Products,
Fertilizers, Steel (Note: No Iron or Iron ore), Cement and Electricity.
The scheme Upgrading the Skills and Training in Traditional Arts/Crafts for Development
(USTTAD) was launched in May, 2015.
Q.29) Which among the below are possible benefits from implementing UBI as highlighted by
Economic Survey 2017?
a) 1, 2 and 5 only
b) 1, 2, 4 and 5 only
c) 1, 2, 3 and 4 only
d) All of the above
Universal Basic Income does not guarantee equality in income. Hence option (c) is the correct
answer.
1. Labour Force Participation Rate (LFPR) is obtained by dividing the number of persons in
the labour force by total population.
2. The All India LFPR of females is much lower than that for males.
3. The North Eastern and Southern States, in general, display high female LFPR as
compared to low levels in Northern States.
a) 2 and 3 only
b) 1 and 3 only
c) 1 only
d) 1, 2 and 3
Survey shows that overall employment increased by 135 thousand (Dec-2014 to Dec 2015).
The All India LFPR of females is much lower than that for males. The North Eastern and
Southern States, in general, display high female LFPR as compared to low levels in Northern
States.
1. Infant mortality rate (IMR) is the number of deaths of children under one year of age
per 1000 live births.
2. The maternal mortality ratio (MMR) is the ratio of the number of maternal deaths
during a given time period per 100,000 live births during the same time-period.
3. Neonatal death is the death of a baby before or during birth after 28 weeks of gestation.
a) 1 only
b) 3 only
c) 2 and 3 only
d) None
Infant mortality: refers to deaths of young children, typically those less than one year of age. It
is measured by the infant mortality rate (IMR), which is the number of deaths of children under
one year of age per 1000 live births.
The maternal mortality ratio (MMR) is the ratio of the number of maternal deaths during a
given time period per 100,000 live births during the same time-period.
Stillbirth: the death of a baby before or during birth after 28 weeks of gestation (according to
WHO definition).
Neonatal death: the death of a baby within the first 28 days of life. (So statement 2 is wrong)
Q.33) The Government of India has set a target of 175 GW renewable power installed
capacity by the end of 2022. In this context, arrange the following renewable energy sources
in the decreasing order of their specific targets:
a) 2-4-3-1
b) 4-2-1-3
c) 1-3-2-4
d) 4-2-3-1
The government has up-scaled the target of renewable energy capacity to 175GW by the year
2022. This includes:
100 GW from solar power
60 GW from wind power
10 GW from biomass power and
5 GW from small hydro power
a) Enable persons with disabilities to gain universal access, independent living and
participation in all aspects of life.
b) Enable Senior Citizens to gain universal access, equal opportunity for development,
independent living and participation in all aspects of life.
c) Enable Vulnerable groups (Women, Children, SCs/STs) to gain universal access, equal
opportunity for development, independent living and participation in all aspects of life.
d) None of the above
Enable persons with disabilities to gain universal access, independent living and participation in
all aspects of life.
IASbabas Economic Survey 2016-2017 - MCQs
It is the vision of the Government to have an inclusive society in which equal opportunities and
access is provided for the growth and development of Persons with Disabilities (PwDs) to lead
productive, safe and dignified lives.
The campaign targets at enhancing the accessibility of built environment, transport system and
Information & communication eco-System.
Q.35) Economy survey mentions about a clear shift in employment to secondary and tertiary
sectors from the primary sector. What does this reflect?
a) Huge number of employment opportunities have been created in secondary and tertiary
sectors
b) Average level of real income per head is increased
c) Indian economy is moving towards development
d) All of the above
General economic theory - whenever a country is experiencing a clear shift in employment from
primary sector to secondary and tertiary sectors, it can be opined that the country is moving
towards development.
In every progressive economy, there has been a steady shift of employment and investment
from the essential primary activities to secondary activities of all kinds and to a still greater
extent into tertiary production.
This phase represents a society which is scientifically not yet very developed, with a negligible
use of machinery. The state of development corresponds to that of European countries in the
early Middle Ages, or that of a modern-day developing country.
More machinery is deployed in the primary sector, which reduces the number of workers
needed. As a result, the demand for machinery production in the secondary sector increases.
The transitional phase begins with an event which can be identified with industrialisation: far-
reaching mechanisation (and therefore automation) of manufacture, such as the use of
conveyor belts.
The tertiary sector begins to develop, as do the financial sector and the power of the state.
The primary and secondary sectors are increasingly dominated by automation, and the demand
for workforce numbers falls in these sectors. It is replaced by the growing demands of the
tertiary sector. The situation now corresponds to modern-day industrial societies and the
society of the future, the service or post-industrial society.