1.

Consider the following statements regarding James Webb Telescope: 

(1) It is considered a successor of the Hubble Telescope. 

(2) It would be orbiting the sun from 1.5 million kilometres away from the Earth.

(3) Its work involves watching the ultraviolet and the visible spectrum of light most primarily covering between 0.8 to 2.5 microns.

(4) It is currently at a point in space known as the Sun-Earth L1 Lagrange point.

Which of these statements is/are correct?

(a) (1) and (4) are correct

(b) (1) and (2) are correct

(c) (1) and (3) are correct

(d) Only (1) is correct

2.

The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply that

1. Other banks retain their deposits with the RBI.

2. The RBI lends funds to the commercial banks in times of need.

3. The RBI advises the commercial banks on monetary matters.

Select the correct answer using the codes given below:

(a) 2 and 3 only

(b) 1 and 2 only

(c) 1 and 3 only

(d) 1, 2 and 3

3.

1. GNP indicates quantitative as well as qualitative aspects of the economy.

2. GNP is always higher than GDP in India.

Which of the statements given above is/are correct in Indian Context w.r.t. GNP & GDP?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

4.

Consider the following statements w.r.t. the Global Environment Facility (GEF).

1. It finances international environmental conventions but does not support any country-driven initiatives. 

2. The World Bank acts as the its Trustee. 

3. It serves as a financial mechanism for the United Nations Convention to Combat Desertification (UNCCD). 

Which of the statements given above is/are correct? 

(a) 1 only

(b) 2 and 3 only

(c) 2 only

(d) 1 and 3 only

5.

W.r.t “Tariff Rate Quota Scheme”, which of the following is/are true?.

1. It applies limits on the quantity of import of a product.

2. It allows a set quantity of specific products to be imported at a low or zero rate of duty.

3. Under the scheme, the government allows import of four products such as maize (corn), milk and cream in powder, granules, crude sunflower seed or safflower oil and fractions thereof; and refined rape, colza or mustard oil and fractions thereof at concessional rates of customs duty.

4. It is established under trade agreements between countries.

(a) 1, 2 and 4

(b) 1, 2 and 3

(c) 2 and 4

(d) 2, 3 and 4

6.

1) It says that the judiciary should presume statutes enacted by the legislature to be constitutional, unless the law is clearly unconstitutional or a fundamental right is implicated.

2) It is absolute.

Which of the above is/are true w.r.t. Presumption of constitutionality?

(a) 1 and 2 are true

(b) Only 1 is true

(c) Only 2 is true

(d) Neither 1 nor 2 is true

7.

With reference to the Foreign portfolio investment (FPI), which of the following statements is/are correct?

1. It does not provide the investor with direct ownership of a company''s assets.

2. It is a tangible asset.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

8.

Which of the following correctly describes “Fiscal Activism”?.

(a) There is maximum concern about debt and greater emphases on public spending.

(b) There is maximum concern about debt and greater emphases on public spending.

(c) There is maximum concern about debt and lesser emphases on public spending.

(d) There is minimum concern about debt and greater emphases on public spending.

9.

A Negative Real Rate of Interest is associated with

(a) Higher savings and lower inflation

(b) Lower savings and higher inflation

(c) Lower savings and lower investment

(d) Higher savings and higher investment

10.

Monetary Policy Committee was established under the

(a) Reserve Bank of India Act, 1934

(b) Fiscal Responsibility and Budget Management Act, 2003

(c) Finance Act 2000.

(d) Banking Management Act 1927

11.

Which of the following statements are correct regarding the International Monetary Fund (IMF)? 

1. Each member of the IMF is assigned a Quota, which is broadly based on its relative position in the world economy. 

2. The Bilateral Borrowing Agreements (BBAs) serve as a third line of defence, after Quotas and the New Arrangements to Borrow (NAB). 

3. The maximum resources for the IMF loans to its members come from the New Arrangements to Borrow (NAB).

Select the correct answer using the code given below:

(a) 1 and 2 only 

(b) 1 and 3 only 

(c) 2 and 3 only 

(d) 1, 2 and 3

o 12.

Consider the following statements regarding Ways and Means Advance: 

1. It was introduced to meet mismatches in the receipts and payments of the government.

2. When the limits of Ways and Means Advance is crossed the Central and the States Governments take recourse to the overdraft facility of the RBI. The interest rate on overdraft facility is 2 percent more than the repo rate.

Which of the statements given above is/are correct? 

(a) 1 only

(b) 2 only 

(c) Both 1 and 2

(d) Neither 1 nor 2

13.

The sum of Implicit Cost and Explicit Cost is known as

(a) Real Cost

(b) Economic Cost

(c) Opportunity cost

(d) Prime Cost

14.

1. It is instituted under the aegis of the United Nations Conference on Trade and Development (UNCTAD). 

2. It aims to enable the countries to give special preference to the developing and the poor countries, by importing goods and services at zero customs duty. 

Which of the statements given above is/are correct w.r.t. “Generalised System of Preferences (GSP)”? 

(a) 1 only 

(b) 2 only 

(c) Both 1 and 2 

(d) Neither 1 nor 2

15.

Consider the following statements.

1. The orbit at LI is almost parallel to the line joining the Earth and the Sun.

2. Aditya-LI aims to observe the Sun’s photosphere.

(a) Only 1 is correct

(b) 1 and 2 are correct

(c) Only 2 is correct

(d) Neither 1 nor 2 is correct 

16.

What is the significance of SC Judgement in M.C Mehta v. Union of India case?.

(a) Gender sensitisation

(b) Environmental activism

(c) Constituional morality

(d) Secular credentials

17.

1. Statutory Liquidity Ratio is the ratio of total deposit of the bank which is kept with RBI.

2. Statutory Liquidity Ratio is maintained in non-cash form.

(a) 1 and 2 are correct

(b) Only 1 is correct

(c) Only 2 is correct

(d) None is correct

18.

It may result in inflation.

1. Increase in the repo rate.

2. Increase in the indirect taxation rate.

3. Proper maintenance of buffer stock of major agricultural products.

4. Decrease in the crude oil production.

(a) 1, 2 and 4

(b) 1, 2 and 3

(c) 2 and 4

(d) 1, 3 and 4

19.

Which of the following is/are true?.

(a) The Contractionary monetary policy is dear money policy.

(b) Expansionary monetary policy increases aggregate demand. 

(c) Both (a) and (b)

(d) Neither (a) nor (b)

20.

Arthur Okun''s Law is concerned with

(a) Manufacturing industry 

(b) Unemployment 

(c) Taxation 

(d) Poverty line

21.

Sovereign Gold Bond Scheme benefit Indian Economy in the following way(s) 

1. Reduce Gold Imports into India. 

2. Enable Investors to redeem the Bond in terms of Gold upon maturity 

3. Bring vast amount of Idle Gold back into Circulation. 

Select the correct answer using the code given below:

(a) 1 only

(b) 2 and 3 only 

(c) 3 only

(d) 1, 2 and 3

22.

Which of the following terms indicates a mechanism used by commercial banks for providing credit to the government?

(a) Cash Credit Ratio

(b) Debt Service Obligation

(c) Liquidity Adjustment Facility

(d) Statutory Liquidity Ratio

23.

Consider the following statements w.r.t. Social Stock Exchange.

1. The proposal of setting up a Social Stock Exchange in India was made in the Union Budget 2022-23.

2. The Securities and Exchange Board of India had set up an expert panel under the chairmanship of Mr. Ishaat Hussain and the objective was to suggest a feasible architecture and outline recommendations for setting up a Social Stock Exchange mechanism in India. 

3. The Social Stock exchanges would enable only the Not-for-Profit entities to raise finances for social sector projects.

Which of these statements is/are correct?

(a) 1 only

(b) 1 and 3

(c) 2 only

(d) 1, 2 and 3  

24.

Vikas takes his lunch every day to school in a plastic container which has resin code number 6. The container is made of

(a) Polystyrene

(b) PVC

(c) Polypropylene

(d) LDPE

25.

“Pratush” in news refer to

(a) Optical Telescope

(b) Radio Telescope

(c) Super Computer

(d) Humanaoid

1.

Difference between Hubble & James Webb Telescope

§ Wavelength:

o   The James Webb Space Telescope would be observing infrared radiations most primarily covering between 0.6 to 28 microns.

o   Hubble’s work involved watching the ultraviolet and the visible spectrum of light. It observes the range of 0.8 to 2.5 microns.

§ Orbits:

o   Webb Telescope would not be orbiting the Earth. It would be orbiting the sun from 1.5 million kilometres away from the Earth.

o   Hubble orbits the Earth at an altitude of 575 kilometres from it.

§ Vision:

o   As per NASA, Hubble can see the smallest and the newest of all galaxies.

o   Webb would be able to see the Newborn galaxies as well.

o   Webb''s near and mid-infrared instruments would be helpful in studying the first formed galaxies and exoplanets.

https://www.sciencefocus.com/space/lagrange-points/

A 

2.

The 7 main functions of RBI are:-

1.      Monopoly of Note Issue

·        Like any other cen­tral bank, the RBI acts as a sole currency authority of the country. It issues notes of every denomination, except one-rupee note and coins and small coins, through the Issue Department of the Bank.

·        One- rupee notes and coins and small coins are issued by the Government of India. In actuality, the RBI also issues these coins on behalf of the Government of India. At present, notes of denominations of rupees two, five, ten, twenty, fifty, one hundred and five hundred are issued by the RBI.

·        Prior to 1956, the principle of note issue of the RBI was based on proportional reserve system. This system was replaced by the minimum reserve sys­tem in 1956 under which the RBI was required to hold at least Rs. 115 crores worth of gold as back­ing against the currency issued.

·        The rest (Rs. 85 crores) should be in foreign securities, so that to­gether with gold and foreign exchange reserve the minimum value of these assets is Rs. 200 crores.

2.      Banker’s Bank:

·        As bankers’ bank, the RBI holds a part of the cash reserves of commercial banks and lends them funds for short periods. All banks are required to maintain a certain percentage (lying between 3 per cent and 15 per cent) of their total liabilities. The main objective of changing this cash reserve ratio by the RBI is to control credit.

·        The RBI provides financial assistance to com­mercial banks and State cooperative banks through rediscounting of bills of exchange. As the RBI meets the need of funds of commercial banks, the RBI func­tions as the Tender of the last resort’.

·        The RBI has been empowered by law to super­vise, regulate and control the activities of commer­cial and cooperative banks. The RBI periodically in­spects banks and asks them for returns and neces­sary information.

3.      Banker to the Government:

·        The RBI acts as the banker to the government of India and State Governments (except Jammu and Kashmir). As such it transacts all banking business of these Govern­ments.

i.     Accepts and pays money on behalf of the Government.

ii.   It carries out exchange remittances and other banking operations.

·        As the Government’s banker, the RBI provides short-term credit to the Government of India. This short-term credit is obtainable through the sale of treasury bills. Not only this, the RBI also provides ways and means of advances (repayable with 90- days) to State Government. It may be noted that the Central Government is empowered to borrow any amount it likes from the RBI.

·        The RBI also acts as the agent of the Govern­ment in respect of membership of the IMF and World Bank.

·        Furthermore, the RBI acts as the adviser of the Government not only on banking and financial mat­ters but also on a wide range of economic issues (like financing patterns, mobilisation of resources, insti­tutional arrangements with regard to banking and credit matters, arrangements with regard to bank­ing and credit matters, international finance) etc.

4.      Controller of Credit:

·        The RBI controls the total supply of money and bank credit to sub serve the country’s interest. The RBI controls credit to en­sure price and exchange rate stability.

·        To achieve this, the RBI uses all types of credit control instru­ments, quantitative, qualitative and selective. The most extensively used credit instrument of the RBI is the bank rate. The RBI also relies greatly on the selective methods of credit control. This function is so important that it requires special treatment.

5.      Exchange Management and Control:

·        One of the essential central banking functions performed by the Bank is that of maintaining the external value of rupee. The external stability of the currency is closely related to its internal stability the inherent economic strength of the country and the way it con­ducts its economic and monetary affairs.

·        Domestic, fiscal and monetary policies have, therefore, an im­portant role in maintaining the external value of the currency. Reserve Bank of India has a very impor­tant role to play in this area.

·        The RBI has the author­ity to enter into foreign exchange transactions both on its own account and on behalf of the Govern­ment.

·        The official external reserves of the country consist of monetary gold and foreign assets of the Reserve Bank, besides SDR holdings. The Reserve Bank, as the custodian of the country’s foreign ex- change reserves, is vested with the duty of managing the investment and utilisation of the reserves in the , most advantageous manger.

6.      Miscellaneous Functions:

·        The RBI collects, collates and publishes all monetary and banking data regularly in its weekly statements in the RBI Bulletin (monthly) and in the Report on Currency and Finance (annually).

7.      Promotional and Developmental Functions:

·        Apart from these traditional function, the RBI performs various activities of promotional and developmental nature. It attempts to mobilise savings for productive purposes. This is done in various ways. For instance, RBI has helped a lot in building the huge financial infrastructure that we see now.

·        ‘This consists of such institutions as the Deposit Insurance Corporation (to safeguard the interests of depositors against bank failure), the Agricultural Re­finance and Development Corporation (to meet the needs of agriculturists), IFCI, SFCs, IDBI, UTI (to meet the long and medium term needs of industry), etc.

·        As for cooperative credit movement, the RBI’s performance in really commendable. This has re­sulted in curbing the activities of moneylenders in the rural economy.

Thus, it is clear that RBI is not a typical Cen­tral Bank as is traditionally understood. It is some­thing more than a Central Bank. It regulates not only currency and credit but aids the development of the Indian economy by conducting various types of promotional activities. As such, in RBI we see many activities combined into one.

A

3.

Gross National Product (GNP) is the GDP of a country added to its ‘income from abroad. so, the transboundary economic activities of the economy are also taken into account.

The item that comes under the segment ‘income from abroad’ are:

1.  Private Remittances: This is the net outcome of the money which inflows and outflows on account of the ‘private transfers’ by Indian nationals working outside India and the foreign nationals working in India (to their home countries).

2.  Interest on external loans

3.  External grants

The balance of all three components of the ‘income from abroad’ segment may turn out to be positive or negative. In the case of India, it is always negative because of heavy outflows on account of the trade deficits and interest payments of foreign loans.

GNP = GDP + (- Income from abroad)

i.e., GDP – Income from abroad, in the case of India

The GNP is always lower than GDP in India.

A

4.

·      https://www.thehindu.com/sci-tech/energy-and-environment/will-global-forest-expansion-hit-tribals/article68009310.ece

·      The Global Environment Facility (GEF) is the world’s largest funder of biodiversity protection, nature restoration, pollution reduction, and climate change response in developing countries. It finances international environmental conventions and country-driven initiatives that generate global benefits. The GEF partnership connects 184 member governments with civil society, Indigenous Peoples, and the private sector, and works closely with other environmental financiers for efficiency and impact.

·      GEF funding is provided by participating donor countries and made available to developing countries and countries with economies in transition to meet the objectives of international environmental conventions and agreements. Financial contributions by donor countries are provided via several trust funds administered by the World Bank acting as the GEF Trustee and serviced by a functionally independent Secretariat housed at the World Bank. As the GEF Trustee, the Bank is accountable to the GEF Council for the performance of its fiduciary responsibilities.

·      Over the past three decades, the GEF has provided more than $22 billion in grants and blended finance and mobilized another $120 billion in co-financing for more than 5,000 national and regional projects, plus 27,000 community-led initiatives through its Small Grants Programme. In addition to funding projects through grants and blended finance, the GEF also serves as financial mechanism for the following conventions:

1)   Convention on Biological Diversity (CBD)

2)   United Nations Framework Convention on Climate Change (UNFCCC)

3)   United Nations Convention to Combat Desertification (UNCCD)

4)   Stockholm Convention on Persistent Organic Pollutants

Minamata Convention on Mercury

C 

5.

https://www.thehindubusinessline.com/books/reviews/business-economy/rbi-allows-trq-holders-to-make-advance-payment-for-gold-import-via-gift-city/article67797458.ece

https://www.financialexpress.com/policy/economy-india-may-give-quota-based-duty-concession-on-gold-imports-from-switzerland-under-efta-trade-pact-bkg-3415773/

D  

6.

https://indianexpress.com/article/opinion/columns/voter-funds-political-parties-supreme-court-protected-9206139/

https://iasgoogle.com/editorial_detail/the-judicial-role-in-improving-lawmaking

B

7.

Foreign portfolio investment (FPI)

·      FPI consists of securities and other financial assets held by investors in another country.

·      It does not provide the investor with direct ownership of a company''s assets and is relatively liquid depending on the volatility of the market.

·      FPI holdings can include stocks, ADRs, GDRs, bonds, mutual funds, and exchange traded funds.

Lorentz Curve

·      Developed in 1906 by Max Lorentz

·      It shows the graphical representation of income inequality

Gini Coefficient 

·      It shows the inequality in a single figure

·      0 means  no inequality

·      1 means total inequality

Kuznets Curves

·      It developed in 1950 by Simon Kuznets

·      It shows the relationship between growth and inequality 

·      It also shows the relationship between development and environmental loss.

·      Inverted "U" shaped

Phillips Curve

·      Developed in 1958 by William Phillips

·      There is an inverse relationship between unemployment and inflation

·      High employment generated with the high inflation rate

·      It is L-shaped.

Laffer Curve

·      It shows the relation between tax rates and revenue collected by the government.

·      Developed in 1974 by Arthur Laffer

·      Inverted "U" shaped curve

Engel Curve

·      Demographic variable influences the expenditure

·      Expenditure vs income

·      Spending for certain goods varies with household income

Rahn Curve

·      Government spending vs Economic growth

Wage Curve

The inverse relationship between Unemployment and Wage

A

8.

Fiscal policy deals with the taxation and expenditure decisions of the governments including debts and public spending. The path chosen by the advanced economies under fiscal activism was to shift the emphasis “from debt to spending.” The more public spending is there, more will is generate economic activities. Thus, Fiscal activism implies that there is minimum concern about debt and greater emphases on public spending.

D   

9.

https://indianexpress.com/article/explained/explained-how-does-negative-rate-policy-work-5903321/

The Nominal Rate of Interest is the rate of  interest which a person is expected to get  as a saver or pay as a borrower from the  bank. However, if this rate of interest is  adjusted for inflation, then it is known as  the Real Rate of Interest, i.e., the Real Rate  of Interest = Nominal Rate of Interest -  Inflation. 

For example, let us say that a person  deposits Rs. 100 in the bank for a period of  1 year, for which the bank is expected to pay him 5% Nominal Rate of Interest.  However, let us say, after 1 year, the rate of inflation is expected to be around 6%. In  this case, the Real Rate of Interest would be  negative (Nominal Rate of Interest of 5% -  Inflation Rate of 6%). Hence, the person would be discouraged from depositing his  money in the bank due to negative returns.

https://indianexpress.com/article/business/economy/india-may-gain-from-lower-inflation-if-prices-stay-low-8439428/

B

10.

https://www.thehindu.com/business/Economy/the-hindu-explains-what-is-inflation-and-what-is-the-rbis-role-in-tackling-it/article33260131.ece

A

11.

· https://indianexpress.com/article/explained/explained-economics/imf-bailout-when-is-it-provided-to-a-country-lending-conditions-8523959/

A

12.

https://www.business-standard.com/about/what-is-ways-and-means-advances

C 

13.

Refer our Cost and Revenue analysis chapter in Indian Economy book.

https://www.financialexpress.com/economy/food-subsidy-govt-to-clear-all-fci-dues-for-fy22/2398457/

B

14.

https://indianexpress.com/article/explained/explained-sci-tech/india-us-trade-policy-meeting-starts-today-gsp-laptop-import-monitoring-system-on-table-9105997/

The Generalised System of Preferences  (GSP) was instituted in 1971, under the  aegis of the UNCTAD (The United Nations  Conference on Trade and Development). It  aims to reduce the trade barriers and  enables the countries to give special  preference to the developing and the poor  countries, by importing goods and  services at zero customs duty.

India was the largest beneficiary of the  programme in 2017, with $5.17 billion in  imports to the US. The USA revoked the  GSP status to India, as it alleged that  India has failed to give the US companies  equitable and reasonable access to its  markets.

C

15.

The orbit at LI is almost perpendicular to the line joining the Earth and the Sun.

https://indianexpress.com/article/opinion/editorials/here-comes-the-sun-2-9099262/#:~:text=So%20far%2C%20Indian%20scientists%20have,and%20understand%20its%20extreme%20heat.

https://www.thehindu.com/sci-tech/science/iia-study-scientists-now-one-step-closer-to-identifying-the-source-of-solar-mean-magnetic-field/article67008307.ece#:~:text=Field%20(IMF).-,The%20sun%20contains%20the%20corona%20(the%20outer%20shell%20of%20the,magnetic%20dynamo%20inside%20the%20sun.

D

16.

https://indianexpress.com/article/cities/delhi/air-quality-hc-informed-supreme-court-direction-capital-neighbouring-states-9010638/

1.      The Taj Mahal Case-

The Taj Mahal Case, also known as the Taj Trapezium Case, was fought between M.C. Mehta and the Union of India. He filed a writ petition in 1986.

Taj Mahal is considered one of India’s most epic Mughal structures. The Taj Trapezium zone, which is of 10,400 sq. km., is built to protect it from pollution. Mehta visited Taj in 1984 and noticed the white marble of Taj turning yellow. To bring this matter into limelight, he filed a petition in the Supreme Court.

Facts of the case-

• The petitioner stated pollution as the main cause of the yellow colour. Emission of pollutant gases like sulphur dioxide and oxygen turned into acid rain. This rain was harmful to the monument and caused the marbles to turn yellow.
• Therefore, the petitioner asked for the protection of the monument.
• As a result, the Central Board for Prevention and Control of Water published “Inventory and Assessment of Pollution Emission in and Around Agra-Mathura Region”.
• The report declared the pollution levels as high and measures to reduce them.
• One of the measures was to shut down thermal power stations. Another step was to reduce emissions of Sulphur Dioxide by 50%.

Judgements- the Supreme Court observed that other than chemicals, socio-economic factors too influenced the degradation of Taj. The people living in the Trapezium Zone were at risk due to air pollution. The court ordered 292 industries to operate using safe fuels like propane instead of coke/coal, otherwise they would have to relocate. The Gas Authority of India Limited was in charge of applications of gas. The court also gave few fundamental rights to workers of these industries and demanded payment of their wages during the time taken for relocation.

2.      The Oleum Gas Leak Case

The case took place between MC Mehta and Union of India in 1985. This was a year after the Bhopal Gas tragedy took place. Mehta demanded that Shriram Industries, located in a congested place in Delhi, needed to close down. On 4th and 6th December, the industry leaked petroleum gas.

Facts of the Case-

• Social activist lawyer M.C. Mehta filed a writ petition for the closure of Shriram Food and Fertiliser Industry as it posed a hazardous risk to people’s lives because of its location.
• The Assistant Commissioner of Factories and the Inspector of Factories issued two orders to shut down the plant under the Factories Act (1948) on 7th and 24th December.

Judgements- The court observed that these hazardous industries contributed to people’s economic development and advancement. For example, these produce chlorine which helps in water disinfection. These industries also support employment of people. Thus, the final decision taken by the judges was to relocate such factories to less populated areas so that they would not pose a threat to human life. The court suggested the government adopt a national policy for the location of such toxic plants. It should be thoroughly checked if the plants are causing any risk to the community.

3.      Ganga Pollution Case

River Ganga is the lifeline to many civilizations. But along with domestic waste, industrial waste is also polluting this river. M.C. Mehta filed a PIL under article 32 of constitution in the Supreme Court. It has been stated that the water of this river is Holy, and many people consume it. Thus protecting it is vital for human life.

Facts-

• Tanneries discharged the maximum industrial waste in Kanpur.
• The tanneries defended themselves by stating that they are not directly discharging this waste into Ganges. Instead, they discharge into municipal drains and it is the Municipality’s responsibility not to mix the two.
• In addition, they stated that the equipment required for regulatory mechanisms is too expensive and shutdown of these tanneries would lead to unemployment.

Judgement- The court declared that unemployment and revenue is a matter that is incomparable to public health. The court also blamed the Municipality for being a total failure and asked the Municipality to take proper action against this. The court demanded an adequate drainage and sewage system.

B

17.

Ø The statutory liquidity ratio (SLR) is the ratio (fixed by the RBI) of the total deposits of a bank which is to be maintained by the bank with itself in non-cash form prescribed by the Government.

·  The cash reserve ratio (CRR) is the ratio (fixed by the RBI) of the total deposits of a bank in Indiawhich is kept with the RBI in cash form.

C

18.

Ø Inflation is a sustained rise in overall price levels.

Ø Repo rate is the rate at which the RBI lends money to commercial banks. In the event of inflation, central banks increase repo rate as this acts as a disincentive for banks to borrow from the central bank. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.

Ø Introduction of increased taxes is one of the fiscal policies to control inflation. But sometimes this may result in cost-push inflation, as increased indirect tax rate increases cost of production.

Ø Maintenance of buffer stock of major agricultural products could be used in supply management which maintains price stability.

Decrease in crude oil production increases crude oil price, which in turn increases cost of production.

C

19.

ü    Expansionary policy is cheap money policy when a monetary authority uses its tools to stimulate the economy. An expansionary policy maintains shortterm interest rates at a lower than usual rate or increases the total supply of money in the economy more rapidly than usual. It is traditionally used to try to combat unemployment by lowering interest rates in the hope that less expensive credit will entice businesses into expanding. This increases aggregate demand (the overall demand for all goods and services in an economy), which boosts short-term growth as measured by gross domestic product (GDP) growth.

• The Contractionary monetary policy is dear money policy, which maintains short-term interest rates higher than usual or which slows the rate of growth in the money supply or even shrinks it. This slows short-term economic growth and lessens inflation. Contractionary monetary policy can lead to increased unemployment and depressed borrowing and spending by consumers and businesses, which can eventually result in an economic recession if implemented too vigorously.

C 

20.

Okun''s law, named after economist Arthur Okun, examines the relationship between two important macroeconomic variables, unemployment, and output. According to the statement, "for every 1% reduction in unemployment in an economy, GDP will increase by 2% and GNP will increase by 3%." It implies an inverse relationship between unemployment and GDP and GNP. This statute is well-known for its clarity and precision.

B

21.

https://indianexpress.com/article/explained/explained-economics/rbi-gold-bonds-sense-to-invest-8329948/  

https://indianexpress.com/article/explained/why-it-makes-sense-to-invest-in-sovereign-gold-bonds-7323669/

A 

22.

SLR (Statutory Liquidity Ratio) is the ratio used by the RBI as a monetary tool. Banks prefer to keep a part of the prescribed ratio in the form of treasury bills, thus financing the government’s short-term borrowing.

D

23.

https://www.thehindubusinessline.com/opinion/power-of-social-stock-exchanges/article67064940.ece  

C

24.

https://www.timesnownews.com/health/fitness/whats-safe-unveiling-the-best-plastics-for-food-storage-article-108933140

A

25.

https://www.thehindu.com/sci-tech/science/astronomers-optical-radio-telescopes-moon-far-side-pratush-india/article68023622.ece

B