1062 practice questions covering Economy, organised into 17 topics.
1062 questions include a written explanation; 273 are from previous year papers.
Pick a topic below, or try the samples first.
The lowering of Bank Rate by the Reserve Bank of India leads to
AMore liquidity in the market
BLess liquidity in the market
CNo change in the liquidity in the market
DMobilization of more deposits by commercial banks
Show answer and explanation
Correct answer: A - More liquidity in the market
Correct answer (a) More liquidity in the market. The Bank Rate is the rate at which the RBI lends to banks; lowering it makes central bank funds cheaper, encouraging banks to borrow and lend more, which increases liquidity in the system. (b) is the opposite effect, produced by raising the rate. (c) is wrong because a rate change does affect liquidity, and (d) is wrong because a lower Bank Rate eases credit rather than directly mobilising more deposits.
Q2
Previous year questionmedium
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if
Aindustrial output fails to keep pace with agricultural output.
Bagricultural output fails to keep pace with industrial output.
Cpoverty and unemployment increase.
Dimports grow faster than exports.
Show answer and explanation
Correct answer: C - poverty and unemployment increase.
Economic development is broader than mere growth in output; it implies improvement in welfare and distribution, so if poverty and unemployment rise even while GNP grows, the higher GNP does not reflect genuine development, making option (c) correct. Options (a) and (b) concern sectoral balance, which may matter for structure but a mismatch alone does not negate development. Option (d) about the trade balance affects external accounts but a higher GNP with a trade deficit can still represent development. The decisive condition is worsening poverty and unemployment, so option (c) is the answer.
Q3
Previous year questioneasy
Among the following, which one is the largest exporter of rice in the world in the last five years?
AChina
BIndia
CMyanmar
DVietnam
Show answer and explanation
Correct answer: B - India
India has consistently been the largest rice exporter in the world in the years preceding 2019, having overtaken Thailand, helped by large surpluses of both basmati and non-basmati rice. China, despite being the largest producer of rice, is a net importer because of its enormous domestic consumption. Vietnam and Myanmar are notable exporters but their volumes are far below India's annual exports.
Q4
Previous year questionmedium
Consider the following statements :
Statement I : Of the two major ethanol producers in the world, i.e., Brazil and the United States of America, the former produces more ethanol than the latter.
Statement II : Unlike in the United States of America where corn is the principal feedstock for ethanol production, sugarcane is the principal feedstock for ethanol production in Brazil.
Which one of the following is correct in respect of the above statements?
ABoth Statement I and Statement II are correct and Statement II explains Statement I
BBoth Statement I and Statement II are correct but Statement II does not explain Statement I
CStatement I is correct but Statement II is not correct
DStatement I is not correct but Statement II is correct
Show answer and explanation
Correct answer: D - Statement I is not correct but Statement II is correct
The United States is the world's largest ethanol producer, ahead of Brazil, so statement I, which claims Brazil produces more, is incorrect. Statement II is correct because the US relies mainly on corn while Brazil uses sugarcane as its principal feedstock. Therefore statement I is wrong while statement II is right.
Q5
Previous year questioneasy
Which of the following can aid in furthering the Government's objective of inclusive growth?
1. Promoting Self-Help Groups
2. Promoting Micro, Small and Medium Enterprises
3. Implementing the Right to Education Act
Select the correct answer using the codes given below:
A1 only
B1 and 2 only
C2 and 3 only
D1, 2 and 3
Show answer and explanation
Correct answer: D - 1, 2 and 3
Correct answer (d) 1, 2 and 3. Inclusive growth aims to spread the benefits of growth widely. Self-Help Groups bring poor and rural women into formal credit and livelihoods, MSMEs generate broad-based employment and entrepreneurship, and the Right to Education Act builds human capital among disadvantaged children, so all three further inclusive growth. Because every measure qualifies, the narrower options (a), (b) and (c) are incorrect.
Q6
Previous year questionmedium
With reference to 'Financial Stability and Development Council', consider the following statements:
1. It is an organ of NITI Aayog.
2. It is headed by the Union Finance Minister.
3. It monitors macroprudential supervision of the economy.
Which of the statements given above is/are correct?
A1 and 2 only
B3 only
C2 and 3 only
D1, 2 and 3
Show answer and explanation
Correct answer: C - 2 and 3 only
The Financial Stability and Development Council (FSDC) was set up by the Government in 2010 as an apex body under the Ministry of Finance and is not an organ of NITI Aayog, so statement 1 is incorrect. It is chaired by the Union Finance Minister, making statement 2 correct, and one of its core mandates is macro-prudential supervision and monitoring of the financial system, so statement 3 is correct. With statements 2 and 3 valid, the answer is (c). Options (a), (b) and (d) either include the false NITI Aayog claim or drop a correct statement.
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