IAS Prelims GS Paper-I 2019 Exam (Economy Section)


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

IAS Prelims GS Paper-I 2019 Exam (Economy Section)
Answer with Explanations
Ajit Kumar - 9718411145

1. Atal Innovation Mission is set up under the

(a) Department of Science and Technology
(b) Ministry of Employment
(c) NITI Aayog
(d) Ministry of Skill Development and Entrepreneurship

Answer: c
TheMission has been set up underNITI Aayog, in accordance with the Hon'ble Finance Minister's declaration in the 2015 Budget Speech


2. What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

(a) To lessen the Government of India's perennial burden of fiscal deficit nd current account deficit
(b) To support the infrastructure projects of Central and State Governments
(c) To act as independent regulator in case of applications for loans of Rs. 50 crore or more
(d) To aim at faster resolution of stressed assets of Rs. 50 crore or more which are-under consortium lending

Answer: d

Expl: Indian banks and financial institutions signed an inter-creditor agreement on July 23, 2018 to fast-track the resolution of stressed assets of Rs 50 crore or above that are under consortium lending.

3. The Chairmen of public sector banks are selected by the

(a) Banks Board Bureau

(b) Reserve Bank of India

(c) Union Ministry of Finance

(d) Management of concerned bank

Answer: a
Bureau recommends for selection of heads of Public Sector Banks and Financial Institutions

4. Which of the following statements is / are correct regarding the Maternity Benefit ' (Amendment) Act, 2017?

1. Pregnant women are entitled for three months pre-delivery and three months post-delivery paid leave.

2. Enterprises with creches must allow the mother minimum six creche visits daily.

3. Women with two children get reduced entitlements.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3

Answer: c

Maternity Benefit Amendment Act has increased the duration of paid maternity leave available for women employees from the existing 12 weeks to 26 weeks. Under the Maternity Benefit Amendment Act, this benefit could be availed by women for a period extending up to a maximum of 8 weeks before the expected delivery date and the remaining time can be availed post childbirth. For women who are expecting after having 2 children, the duration of paid maternity leave shall be 12 weeks.
Women employees would be permitted to visit the crèche 4 times during the day (including rest intervals)

5. Which one of the following is not a sub-index of the World Bank's 'Ease of Doing Business Index'?

(a) Maintenance of law and order

(b) Paying taxes

(c) Registering property

(d) Dealing with construction permits

Answer: a

index is based on the average of 10 subindices:

Starting a business
Dealing with construction permits
Getting electricity
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across borders
Enforcing contracts
Resolving insolvency

6. The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus

(a) transportation cost only  
(b) interest cost only     
(c) procurement incidentals and distribution cost             
(d) procurement incidentals and charges for godowns  

Answer: c
economic cost of food grains to FCI is Minimum Support Price and all other cost till delvery of food grains.

7. In the context of any country, which one of the following would be considered as part of its social capital?

(a) The proportion of literates in the population

(b) The stock of its buildings, other infrastructure and machines

(c) The size of population in the working age group

(d) The level of mutual trust and harmony in the society

Answer: d
In financial terms, social capital basically comprises the value of social relationships and networks that complement the economic capital for economic growth of an organization.

8. The Service Area Approach was implemented under the purview of

(a) Integrated Rural Programme

(b) Lead Bank Scheme

(c) Mahatma Gandhi National Rural Employment Guarantee Scheme

(d) National Skill Development Mission

Answer: b
Service area approach (SAA) is an improved version of area approach of Lead Bank Scheme. Under SAA plan each commercial bank / RRB branch in rural and semi-urban area is designated to serve 15 to 25 villages for planned and orderly development of rural and semi-urban areas

9. Consider the following statements:

1. Most of India's external debt is owed by governmental entities.
2. All of India's external debt is denominated in US dollars.

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

Answer: d

In 2018 Governmental debt was $111 bnand non - governmental debt $417 bn.

The US dollar denominated debt continued to be the largest component of India’s external debt with a share of 49.5 per cent at end-March 2018, followed by the Indian rupee (35.8 per cent), SDR (5.5 per cent), Japanese yen (4.8 per cent) and euro (3.4 per cent).

10. Which of the following is not included in the assets of a commercial bank in India?

(a) Advances
(b) Deposits
(e) Investments
(d). Money at call and short notice

Answer: b
Deposits are liabilities of banks.

11. In the context of India, which of the following factors is/are contributor/ contributors to reducing the risk of a currency crisis?

1. The foreign currency earnings of India's IT sector
2. Increasing the government expenditure
3. Remittances from Indians abroad

Select the correct answer using the code given below.

(a) 1 only
(b) 1 and 3 only
(c) 2 only
(d) 1, 2 and 3
Answer: b
Any kind of forex earning helps solve the currency crisis.

11. Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

(a) Certificate of Deposit
(b) Commercial Paper
(c) Promissory Note
(d) Participatory Note

Answer: d
A participatory note, commonly known as a P-note or PN, is an instrument issued by a registered foreign institutional investor (FII) to an overseas investor who wishes to invest in Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India (SEBI).
Promissory note is a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.

12. With reference to India's Five-Year Plans, which of the following statements is/are correct?

1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.

2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.

3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.

Select the correct answer using the code given below.

(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3

Answer: C
Second Five-Year Plan, there was a determined thrust towards establishment of basic and capital good industries.

5th Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.

13. Consider the following statements

1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.

2. In terms of PPP dollars, India is the sixth largest economy in the world.

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

Answer: a
On PPP India is 3rd largest economy

14. Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

(a) Spices
(b) Fresh fruits
(c) Pulses
(d) Vegetable oils

Answer: d
the top eight imported products of India are:
.Mineral Oil.
Precious stones.
Electronics.
Heavy machinery.
Organic chemicals.
Plastics.
Animal and vegetable oil.
Iron and Steel.

15. Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?

(a) Curbing imports of non-essential goods-and promoting exports

(b) Encouraging Indian borrowers to issue rupee denominated Masala Bonds

(c) Easing conditions relating to external commercial borrowing

(d) Following an expansionary monetary policy

Answer: d

Government announces measures to rescue sliding rupee in Sep 2018:
* EASIER EXTERNAL COMMERCIAL BORROWINGS (ECBs)
* MORE ZING FOR MASALA BONDS
- Masala bonds to be exempted from withholding tax
- Indian banks to be allowed to become market makers and underwrite the debt
* NO HEDGING FOR INFRASTRUCTURE ECBs
- Review mandatory hedging for infrastructure ECBs

* REVIEW OF FPI EXPOSURE LIMITS
- Not more than 20% of a FPI’s corporate bond portfolio can be invested with a single corporate group
- Also, 50% of a single issue cannot go to any such group

16. Consider the following statements:

The Reserve Bank of India's recent directives relating to 'Storage of Payment System Data', popularly known as data diktat, command the payment system providers that

1. they shall ensure that entire data relating to payment systems operated by them are stored in a system only in India

2. they shall ensure that the systems are owned and operated by public sector enterprises

3. they shall submit the consolidated system audit report to the Comptroller and Auditor General of India by the end of the calendar year

Which of the statements given above is/are correct?

(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 1, 2 and 3

Answer: a
All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. This data should include the full end-to-end transaction details / information collected / carried / processed as part of the message / payment instruction


17. The money multiplier in an economy increases with which one of the following?

(a) Increase in the cash reserve ratio

(b) Increase in the banking habit of the population

(c) Increase in the statutory liquidity ratio

(d) Increase in the population of the country

Answer: b
The multiplier effect describes how an increase in one economic activity leads to a much greater increase in economic output. In the banking system, money that gets deposited multiplies as it filters through the economy, going from depositor to borrower multiple times.

The size of the multiplier depends on the percentage of deposits that banks are required to hold as reserves. In other words, it is the money used to create more money and is calculated by dividing total bank deposits by the reserve requirement.

18. Consider the following statements:

1. According to the Indian Patents Act, a biological process to create a seed can be patented in India.

2. In India, there is no Intellectual Property Appellate Board.

3. Plant varieties are not eligible to be patented in India.

Which of the statements given above is/are correct?

(a) 1 and 3 only
(b) 2 and 3 only
(c) 3 only             
(d) 1, 2 and 3

Answer: a

Intellectual Property Appellate Board (IPAB) was constituted on September 15, 2003 by the Indian Government to hear and resolve the appeals against the decisions of the registrar under the Indian Trademarks Act, 1999 and the Geographical Indications of Goods (Registration and Protection) Act, 1999.

PatentAmendment Acts which have introduced patents on seed.

19. Consider the following statements:

As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018

1. if rules for fixed-term employment are implemented, it becomes easier for the firms/companies to layoff workers.

2. no notice of termination of employment shall be necessary in the case of temporary workman.

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

Answer: b
As per the amendment, the term "Fixed Term Employment" has been introduced. The amendment says that irrespective of the industry of work, an employer of any industrial establishment shall not change the posts of the permanent workmen existing in his industrial establishment as a fixed term employment.

Fixed-term employment for all sectors will make it easier for companies to hire-and-fire workers along with reducing the role of middlemen.

20. With reference to land reforms in independent India, which one of the following statements is correct?

(a) The ceiling laws were aimed at family holdings and not individual holdings.

(b) The major aim of land reforms was providing agricultural land to all the landless.

(c) It resulted in cultivation of cash crops as a predominant form of cultivation.

(d) Land reforms permitted no exemptions to the ceiling limits.

Answer: only (c ) is incorrect

21. The Global Competitiveness Report is published by the

(a) International Monetary Fund
(b) United Nations Conference on Trade and Development
(c) World Economic Forum
(d) World Bank

Answer: c
Global Competitiveness Report is a yearly report published by the World Economic Forum. Since 2004, the Global Competitiveness Report ranks countries based on the Global Competitiveness Index, developed by Xavier Sala-i-Martin and Elsa V. Artadi. 

22. In a given year in India, official poverty lines are higher in some States than in others because

(a) poverty rates vary from State to State
(b) price levels vary from State to State
(c) Gross State Product varies from State to State
(d) quality of public distribution varies from State to State

Answer: b
The rank is calculated according to the percentage of people below poverty-line and is based on MRP-consumption. Goa ranks best with least poverty of 5.09% while national average stands at 21.92%.

23.With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements

1. AIIB has more than 80 member nations.
2. India is the largest shareholder in AIIB.

3. AIIB does not have any members from outside Asia.

Which of the statements given above is / are correct?

(a) 1 only
(b) 2 and 3 only
(c). 1 and 3 only
(d) 1, 2 and 3

Answer: a
Expl: Asian Infrastructure Investment Bank (AIIB) has 97 members from all over world. China is largest share holder.

24. Among the following, which one is the largest exporter of rice in the world in the last five years?

(a) China
(b) India
(c) Myanmar
(d) Vietnam

Answer: b
countries that exported the highest dollar value worth of rice during 2018 -
India: US$7.4 billion (30.1% of total riceexports)
Thailand: $5.6 billion (22.7%)
Vietnam: $2.2 billion (9%)




Monday, 03rd Jun 2019, 04:20:12 AM

Add Your Comment:
Post Comment