UPSC CSE 2024 handbook: Check previous year questions on Economics Part II

Students who wish to attempt the UPSC Civil Service Exam 2024 must be in their last lap of revision before they face the exams on June 16, 2024.

Students who wish to attempt the UPSC Civil Service Exam 2024 must be in their last lap of revision before they face the exams on June 16, 2024. Attempting test series, mock tests and reviewing what you have prepared over these months can help you crack the exam.

Attempting test series, mock tests and reviewing what you have prepared over these months can help you crack the exam. (Hindustan Times)

Check out the following previous year's questions on Economics to test your knowledge.

I. ‘’Rapid Financing Instrument’’ and ‘’Rapid Credit Facility’’ are related to the provisions of lending by which one of the following?

1) Asian Development Bank

2) International Monetary Fund

3) United Nations Environment Programme Finance Initiative

4) World Bank

Solution: ‘’Rapid Financing Instrument’’ and ‘’Rapid Credit Facility’’ are related to the provisions of lending of the International Monetary Fund.

II. With reference to the Indian economy, consider the following statements:

1) An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee

2) An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness

3) An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER

Which of the above statements are correct?

Solution: An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee and an increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER are the right options.

III. With reference to the Indian economy, what are the advantages of “Inflation-Indexed Bonds (IIBs)”?

1) Government can reduce the coupon rates on its borrowing by way of IIBs

2) IIBs provide protection to the investors from uncertainty regarding inflation

3) The interest received as well as capital gains on IIBs are not taxable

Which of the statements given above are correct?

Solution: Government can reduce the coupon rates on its borrowing by way of IIBs and IIBs provide protection to the investors from uncertainty regarding inflation are the right options.

IV. Which of the following activities constitute a real sector in the economy?

1) Farmers harvesting their crops

2) Textile mills converting raw cotton into fabrics

3) A commercial bank lending money to a trading company

4) A corporate body issuing Rupee Denominated Bonds overseas

Solution: Farmers harvesting their crops and Textile mills converting raw cotton into fabrics are the right options.

(Questions and solutions taken from UPSC CSE 2022 Preliminary question paper and key issued by UPSC)