UPSC Civil Service Examination 1976-2016 Indian Polity IV

1. According to the 1991 Census, the highest percentage of population in India is to be found in the age group of :

(a) 60 years and above

(b) 35 to 55 years

(d) 5 to 14 years

Ans .

Explanation :
The highest percentage of population in India in 1997 is in the age group of 5-14 years.

2. Which of the following pairs are correctly matched?
1. Increase in—Monetary expansion
2. Low import growth rate in India-Recession in Indian industry
3. Euro-issues—Shares held by Indian companies in European countries
4. Portfolio investment—Foreign institutional investors.

(a) 1, 2 and 4

(b) 3 and 4

(d) 1, 2, 3 and 4

Ans .

Explanation :
Euro issue includes issue of ADR (American Depositary Receipts) and GDR (Global Depositary Receipts). A scheme has been initiated during 1992 under which Indian companies are permitted to raise foreign currency resources through issue of Foreign Currency Convertible Bonds (FCCBs) and/or issue of ordinary equity shares through Global Depositary Receipts (GDRs)/American Depositary Receipts (ADRs) to foreign investors i.e. institutional investors or individuals (including NRIs) residing abroad.

3. Which one of the following is true regarding the Jawahar Rozgar Yojana (JRY)?

(a) It was launched during the Prime Ministership of Indira Gandhi

(b) It aims at creating one million jobs annually

(d) Under the scheme 30% of the employment generated is reserved for women

Ans .

Explanation :
Though the people below the poverty line were the target group for employment, the preference was to be given to the Scheduled Castes, Scheduled Tribes and freed bonded labourers. Thirty percent of the employment opportunities were to be reserved for women in rural areas.

4. The Narasimham Committee for financial sector Reforms has suggested reduction in

(a) SLR and CRR

(b) SLR, CRR and Priority Sector Financing

(d) CRR, Priority Sector Financing and Financing to capital goods sector

Ans .

Explanation :
Narasimham Committee for Financial Sector Reforms (1991) has suggested reduction in SLR, CRR and priority sector financing reducing it from 40% to 10%. Most of the suggestion of the committee were not implemented.

5. One of the reasons for India’s occupational structure remaining more or less the same over the years has been that:

(a) investment pattern has been directed towards capital intensive industries

(b) productivity in agriculture has been high enough to induce people to stay with agricultural

(d) people are largely unaware of the significance of transition from agriculture to industry for economic development

Ans .

Explanation :
Our economic planners are not emphasizing development of small scale industries in their plan strategies.

6. The main reason for low growth rate in India, inspite of high rate of savings and capital formation is :

(a) high birth rate

(b) low level of foreign and

(d) high capital output ratio

Ans .

Explanation :
The capital outpur ratio is used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output, hence the resulting capital output ratio is low.

7. Which one of the following is correct regarding stabilization and structural adjustment as two components of the new economic policy adopted in India?

(a) Stabilization is a gradual, multi-step process while structural adjustment is a quick adaptation process

(b) Structural adjustment is a gradual multi-step process, while stabilization is a quick adaptation process

(c) Stabilization and structural adjustment are very similar and complimentary policies. It is difficult to separate one from the other

(d) Stabilization mainly deals with a set of policies which are to be implemented by the Central government while structural adjacent is to be set it motion by the State governments

Ans .

Explanation :
New Economic Policy was adopted in 1991 based on Rao-Manmohan model. Stabilization component of any economy is essentially a short-term programme while the structural readjustment component is a long term process.

8. One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee.
This is being advocated because:

(a) convertibility of the rupee will stabilize its exchange value against major currencies of the world

(b) it will attract more foreign capital inflow in India

(d) it will help India secure loans from the world financial markets at attractive terms

Ans .

Explanation :
The full convertibility of the Indian currency means that the rupee is freely exchangeable into other international currencies and vice versa. Also, this would mean that international investors can buy and sell Indian assets at will. After 1994, the rupee has been partially convertible which means that the currency is changed freely into foreign currency for business and trade expenses. But it cannot be converted freely for acquiring overseas assets. Experts feel full convertibility of rupee would facilitate growth and higher foreign investments.

9. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A) : Though India’s national income has gone up several fold since 1947, there has been no marked improvement in the per capital income level.
Reason (R) : Sizeable proportion of the population of India is still living below the poverty line.

In the context of the above two statements which one of the following is correct?

(a) Both A and R are true and R is the correct explanation of A

(b) Both A and R are true but R is not a correct explanation of A

(d) A is false but R is true

Ans .

Explanation :
Per capita income is NNP (Net National Product) at Factor Cost.

10. A redistribution of income in a country can be best brought about through:

(a) progressive taxation combined with progressive expenditure

(b) progressive taxation combined with regressive expenditure

(d) regressive taxation combined with progressive expenditure

Ans .

Explanation :
Progressive Tax is a process in which as the income of a person increases, rate of income tax on the income also goes up. Regressive Tax is the process according to which as income of a person goes up, rate of tax goes down. A progressive tax structure improves the distribution of income.

11. As per the 1991 Census, which one of the following states has a lower population density than the other three?

(a) Sikkim

(b) Nagaland

(d) Manipur

Ans .

Explanation :
Ranking of States and Union territories by density in 1991 :
Sikkim: 57
Nagaland: 73
Meghalaya: 79
Manipur: 82

12. As per the 1991 Census, the average size of households in terms of number of persons per household in respect of the given states follows the sequence (highest first, lowest last)

(a) Haryana, Uttar Pradesh, Kerala, Tamil Nadu

(b) Uttar Pradesh, West Bengal, Gujarat, Kerala

(d) Uttar Pradesh, West Bengal, Tamil Nadu, Kerala

Ans .

Explanation :
No explanation

13. Human Development Index comprises literacy rates, life expectancy at birth and

(a) Gross National Product per head in the US dollars

(b) Gross Domestic Product per head at real purchasing power

(d) National Income per head in US dollars

Ans .

Explanation :
HDI or Human Development Index measures achievements in terms of life expectancy, literacy and adjusted real income (standard of living). First HDR calculations were made in 1990 by Mehboob-ul-Huq.

14. In India, inflation is measured by the:

(a) Wholesale Price Index number

(b) Consumers Price Index for urban non-manual workers

(d) National Income Deflation

Ans .

Explanation :
Inflation means rise in general price level over a period of time with expectations of further increases. It is measured by changes in WPI (Wholesale Price Index). The base year to calculate WPI is 1993-94 since April 2000.

15. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A) : The emergence of economic globalism does not imply the decline of socialist ideology.
Reason (R) : The ideology of socialism believes in Universalism and globalism.

In the context of the above two statements which one of the following is correct?

(a) Both A and R are true and R is the correct explanation of A

(b) Both A and R are true but R is not the correct explanation of A

(d) A is false but R is true

Ans .

Explanation :
Globalism is the policy of placing the interests of the world above those of individual nations. This also means that there would be free movement of goods and services across national boundaries. Socialism is an economic system based on state ownership of means of production including capital. Universalism means application of certain basic principles at universal level.

16. National Income is:

(a) Net National Product at market price

(b) Net National Product at factor cost

(d) Net Domestic Product at factor cost

Ans .

Explanation :
National Income is the money value of all final goods and services produced in an economy during a financial year. At the level of an economy, value of final goods and services is equal to the total income of all factors of production viz labour, capital, land and entrepreneurship.

17. The Minimum Alternative Tax (MAT) was introduced in the Budget of the Government of India for the year:

(a) 1991-92

(b) 1992-93

(d) 1996-97

Ans .

Explanation :
MAT or Minimum Alternative Tax was introduced in the budget of 1996-97. Under MAT a company is required to pay a minimum tax of 7% of the book profit in case the tax on the total income computed under the normal provisions of law works out to less than this amount.

18. Match List-I with List-II and select the correct answer.
List-I (Committee) List-II (Chaired by)
A. Disinvestment of shares in 1. Rajah Chelliah
Public Sector Enterprises
B. Industrial Sickness 2. Omkar Goswami
C. Tax Reforms 3. R.N. Malhotra
D. Reforms in Insurance Sector 4. C. Rangarajan

(a) A- 1, B- 4, C-2, D -3

(b) A- 4, B- 2, C-1, D -3

(d) A- 1, B- 3, C-4, D -2

Ans .

Explanation :
Chelliah Committee on Tax Reforms – 1993; Omkar Goswami Committee on Industrial Sickness – 1994; Rangarajan Committee on Disinvestment of Shares in PSUs – April 1993; RN Malhotra Committee on Reforms in Insurance Sector – 1993.

19. According to the latest census figures sex ratio in India is :

(a) declining

(b) stable

(d) fluctuating

Ans .

Explanation :
In the 1981 Census, the sex ratio in India was 934. By 1991 it had declined to 927 per 1000 men. In 2001 Census it rose to 933. This shows that it keeps on fluctuating depending upon various factors.

20. What is the correct sequence of the descending order of the following States in respect of female literacy rates as per the 2001 census?
1. Mizoram
2. Kerala
3. Goa
4. Nagaland

Choose the correct answer using the codes given below:

(a) 2, 1, 3, 4

(b) 2, 3, 4, 1

(d) 1, 2, 4, 3

Ans .

Explanation :
According to 2001 census the correct sequence in descending order of the states for female literacy rate is Kerala - 87.7%, Mizoram - 86.7%, Goa - 76.5%, Nagaland - 61.5%.

21. According to the World Development Report, low income economics are those for which the per capita GNP in 1994 was:

(a) US $ 925 or less

(b) US $ 825 or less

(d) US $ 525 or less

Ans .

Explanation :
WDR or World Development Report is published by World Bank annually.

22. The Capital Account Convertibility of the Indian Rupee implies:

(a) that the Indian Rupee can be exchanged by the authorised dealers for travel

(b) that the Indian Rupee can be exchanged for any major currency for the purpose of trade in goods and services

(d) None of the above

Ans .

Explanation :
Capital account convertibility means free conversion of cross-border capital flows. Any entity can convert domestic currency into hard currency at the prevailing market rate and take hard currency out of the country without the need of offering any explanation.

23. A consumer is said to be in equilibrium, if:

(a) he is able to fulfil his need with a given level of income

(b) he is able to live in full comforts with a given level of income

(d) he is able to locate new sources of income

Ans .

Explanation :
From the economic point of view equilibrium in the marginal utility derived from the goods consumed and money paid. The consumers would be in equilibrium if the satisfaction derived from each commodity is equal to each other.

24. The supply-side economics lays greater emphasis on the point of view of :

(a) producer

(b) global economy

(d) middle-man

Ans .

Explanation :
Supply-side economics argues that economic growth can be most effectively generated by lowering barriers to produce goods and services. This means adjusting income tax and capital gains tax rates, and allowing greater flexibility in the production process by reducing government regulation. According to the approach, consumers will then benefit from a greater supply of goods and services which would become available at lower prices.

25. Human Poverty Index was introduced in the Human Development Report of the year:

(a) 1994

(b) 1995

(d) 1997

Ans .

Explanation :
The correct answer is (a)

26. The current Price Index (base 1960) is nearly 330. This means that the price of:

(a) all items cost 3.3 times more than what they did in 1960

(b) the price of certain selected items have gone upto 3.3 times

(d) gold price has gone up 3.3 times

Ans .

Explanation :
The correct answer is (c)

27. The economic crisis in the later half of 1990s most seriously affected Indonesia, Thailand, Malaysia and South Korea. The cause of the crisis was:

(a) mismanagement of the financial resources and financial sector, in general

(b) the prolonged over-valuation of local currencies vis-vis the western currencies

(d) none of these

Ans .

Explanation :
Mismanagement of the financial resources and financial sector were major cause for the economic crisis in later half of 1990.

28. Since 1980, the share of the tertiary sector in the total GDP of India has:

(a) shown an increasing trend

(b) shown a decreasing trend

(d) been fluctuating

Ans .

Explanation :
The share of the tertiary sector in the total GDP or Gross Domestic Product of India is increasing which is a sign of economic development. This reproduces the trend shown by western countries as they were developing.

29. Assertion (A) : Devaluation of a currency may promote export.
Reason (R) : Price of the country’s products in the international market may fall due to devaluation.

(a) Both A and R are true and R is the correct explanation of A

(b) Both A and R are true but R is not a correct explanation of A

(d) A is false but R is true

Ans .

Explanation :
Devaluation is a conscious decision taken by Central Bank of the country to lower the external value of domestic currency. After devaluation of the rupee Indian goods would become cheaper for foreigners.

30. Assertion (A) : Fiscal deficit is greater than budgetary deficit.
Reason (R) : Fiscal deficit is the borrowing from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.

(a) Both A and R are true and R is the correct explanation of A

(b) Both A and R are true but R is not a correct explanation of A

(d) A is false but R is true

Ans .

Explanation :
Fiscal deficit = Revenue receipts + non-debt creating capital receipts – Total expenditure; Budget deficit = Total receipts – Total expenditure

31. From the balance sheet of a company, it is possible to:

(a) judge the extent of profitability of this company

(b) assess the profitability and size of the company

(d) determine the market share, debts and assets of the company

Ans .

Explanation :
In financial accounting, a balance sheet or statement of financial position is a summary of the financial status of an organisation which can be a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership of equity are listed as on a specific date, which is normally the end of the financial year. A balance sheet is the “snapshot of a company’s financial condition”.

32. Persons below the poverty line in India are classified as such based whether:

(a) they are entitled to a minimum prescribed food basket

(b) they get work for a prescribed minimum number of days in a year

(d) their daily wages fall below the prescribed minimum wages

Ans .

Explanation :
Poverty line in India is classified on the basis of calories per day available to a person. It is a simple average and does not show the actual availability to a person or a household.

33. Which one of the following statements regarding the levying. Collecting and distribution of Income Tax is correct?

(a) The Union levies, collects and distributes the proceeds of income tax between itself and the states

(b) The Union levies, collects and keeps all the proceeds of income tax to itself

(d) Only the surcharge levied on income tax is shared between the Union and the states

Ans .

Explanation :
Income tax is levied and collected by Union government or the central government and distributed between itself and states.

34. Assertion (A) : According to statistics, more female children are born each year than male children in India.
Reason (R) : In India, the death rate of a male child is higher than that of the female child.

(a) Both A and R are true and R is the correct explanation of A

(b) Both A and R are true but R is not a correct explanation of A

(d) A is false but R is true

Ans .

Explanation :
Assertion is correct, but the reason is wrong. In India, the sex ratio of female is lower than male, because female foeticide is common across India.

35. Among which one of the following sets of social/ religious groups is the extent of poverty the highest, as per Government statistics for the nineties?

(a) Muslims in Kerala, Gujarat and A.P.

(b) Tribals in Bihar, Orissa, M.P. and Maharashtra

(d) Christians in Gujarat, Maharashtra and Assam

Ans .

Explanation :
According to the recent data made available by Central Statistical Organisation, the incidence of poverty is highest in tribes of Bihar, Orissa and Madhya Pradesh.

36. The first Indian State to have its Human Development Report prepared and released by Amartya Kumar Sen in Delhi is :

(a) West Bengal

(b) Kerala

(d) Andhra Pradesh

Ans .

Explanation :
Madhya Pradesh was the first state to have calculated Human Development Report in 1995, under the guidance of Prof. Amartya Sen.

37. In an open economy, the national income (Y) of the economy is: (C, I, G, X, M stand for Consumption, Investment, Govt. Expenditure, total exports and total imports respectively.)

(a) Y = C + I + G + X

(b) Y = I + G –X + M

(d) Y = C – G + I + (X – M)

Ans .

Explanation :
No explanation

38. Match List I with List II and select the correct answer using the codes given below the lists:
List - I List-II
A. Boom   1. Business activity at high level
  with increasing income, output
  and employment at macro level
B. Recession 2. Gradual fall of income, output
  and employment with business
  activity in a low gear
C. Depression 3. Unprecedented level of under
  employment, and unemployment,
  drastic fall in income output
  and employment.
D. Recovery   4. Steady rise in the general level
  of prices, income, output and
  employment.

(a) A-1; B-2; C-3; D-4

(b) A-1; B-2; C- 4; D-3

(d) A-2; B-1; C-3; D-4

Ans .

Explanation :
Boom is a period of time during which sales of a product or business activity increases very rapidly. In the stock market, booms are associated with bull markets, whereas busts are associated with bear markets. Recession is A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. Depression is a severe and prolonged downturn in economic activity. In economics, a depression is commonly defined as an extreme recession that lasts two or more years. Economic Recovery is a period of increasing business activity signaling the end of a recession. Much like a recession, an economic recovery is not always easy to recognize until at least several months after it has begun.

39. Indian Human Development Report does not give for each sample village:

(a) Infrastructure and Amenities Index

(b) Education Related Index

(d) Unemployment Related Index

Ans .

Explanation :
The National Human Development Report 2001, is an attempt to map the state of human development in India. While considering the state of human development, and the related economic, educational and health attainments, the report analyses governance for human development. To facilitate monitoring, many process indicators have been created. The Human Development Index, Gender Disparity Index and Human Poverty Index have been calculated for India after modifying the UNDP methodology.

40. Consider the following statements about the megacities of India:
1. Population of each megacity is more than 5 million
2. All the megacities are important sea ports
3. Megacities are either national or state capitals

Which of these statements are correct ?

(a) 1, 2 and 3

(b) 1 and 2

(d) 1 and 3

Ans .

Explanation :
Megacities of India have more than 5 million population. But not all the major megacities are located on the sea coast or are sea ports. Delhi, which is the national capital is not a sea port.

41. Which one of the following ports of India handles the highest tonnage of import cargo?

(a) Calcutta

(b) Kandla

(d) Vishakhapatnam

Ans .

Explanation :
No explanation

42. Which one of the following statements is true according to 1991 Census data?

(a) U.P. has the highest density of population in India

(b) Himachal Pradesh has the highest female to male sex ratio in India

(d) Bihar has the lowest literacy rate in India

Ans .

Explanation :
According to 1991 census data, Bihar had the lowest rate of literacy at 47.53%.

DIRECTIONS : The next two items are based on the following table. Study the same carefully and attempt the two items that follow: 43. Which one of the following statements is false?

(a) All countries other than India have over 80% literacy

(b) Malaysia and Korea have life expectancy higher than all other countries

(d) The life expectancy at birth in India is almost the same as that of Indonesia

Ans .

Explanation :
According to given data, infant mortality rate is both high and low.

44. The best performance in terms of Human Development among Asian countries is by :

(a) China

(b) Malaysia

(d) Philippines

Ans .

Explanation :
Human development in a country depends on life expectancy of the individual and standard of living of the population. Among Asian countries Korea is the best performer in human development index. Its infant mortality rate is 6 and literacy rate is 98%.

45. Which one of the following countries occupies the first place in the "Global Competitive Report" of World Economic Forum?

(a) USA

(b) Singapore

(d) France

Ans .

Explanation :
According to Global Competitive Report of 'World Economic Forum' in 1999, Singapore occupies the first place with Index 2.12, India was at 52nd with Index - 1.30. Russia is at the bottom with Index - 2.02.

46. The most appropriate measure economic growth is its:

(a) Gross Domestic Product of a country’s

(b) Net Domestic Product

(d) Per Capita Real Income

Ans .

Explanation :
Per capita real income is nothing but NNP at factor cost. It means national income is sum total of all factor incomes adjusted for increase in prices.

47. Match List I with List II and select the correct answer using the codes given below the lists:
     List-I (Term) List-II (Explanation)
A. Fiscal deficit   1. Excess of Total Expenditure
   over Total Receipts
B. Budget deficit    2. Excess of Revenue Expenditure
C. Revenue deficit 3. Excess of Total Expenditure over
  Total Receipts less borrowings
D. Primary deficit 4. Excess of Total Expenditure
over Total Receipts less borrowings
and Interest Payments

(a) A-3; B-1; C-2; D-4

(b) A-4; B-3; C-2; D-1

(d) A-3; B-1; C-4; D-2

Ans .

Explanation :
Revenue deficit = revenue receipts – Revenue expenditure; Budget deficit = Total receipts – Total expenditure; Fiscal deficit = Revenue receipts + Nondebt creating capital receipts – Total expenditure (F.D. is government borrowings); Primary deficit = Fiscal deficit – Interest payments.

48. Consider the following taxes:
1. Corporation tax
2. Customs duty
3. Wealth tax
4. Excise duty

Which of these is/are indirect taxes?

(a) 1 only

(b) 2 and 4

(d) 2 and 3

Ans .

Explanation :
Indirect taxes are the charges that are levied on goods and services. Some of the significant indirect taxes include Value Added Tax, Central Sales Tax, Central Excise Duty, Customs Duty, stamp duties and expenditure tax. Property tax, Corporation tax and Wealth tax are examples of direct taxes.

49. The new series of Wholesale Price Index (WPI) released by the Government of India is with reference to the base prices of :

(a) 1981-82

(b) 1990-91

(d) 1994-95

Ans .

Explanation :
Base year for WPI is 1993-94 has been in use since April 2000. Earlier 1981-82 was being used as the base year.

50. The term National Income represents:

(a) gross national product at market prices minus depreciation

(b) gross national product at market prices minus depreciation plus net factor income from abroad

(d) gross national product at market prices minus net factor income from abroad

Ans .

Explanation :
The option (c) gross national product at market price minus depreciation minus indirect tax plus subsidies.

51. Assertion (A) : Ceiling on foreign exchange for a host of current account transaction heads was lowered in the year 2000.
Reason (R) : There was a fall in foreign currency assets also.

(a) Both A and R are individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans .

Explanation :
No explanation

52. The prices at which the government purchases food grains for maintaining the public distribution system and for building up buffer-stock is known as:

(a) minimum support prices

(b) procurement prices

(d) ceiling prices

Ans .

Explanation :
Procurement price is the support price at which the government will buy whatever quantum farmers wants to sell to the government in the event of private traders not buying the product. This is done to give a fair price to the farmer and to create a buffer stock of food grains to meet public distribution system requirements.

53. India's population growth during the 20th century can be classified into four distinct phases. Match List-I (Period) with List-II (Phase) and select the correct answer using the codes given below the lists:
List-I (Period) List-II (Phase)
A. 1901-1921 1. Steady growth
B. 1921 -1951 2. Rapid high growth
C. 1951-1981 3. Stagnant growth
D. 1981 -2001 4. High growth with definite
signs of slowdown

(a) A-3; B-1; C-4; D-2

(b) A-1; B-3; C-2; D-4

(d) A-1; B-3; C-4; D-2

Ans .

Explanation :

54. With reference to Power Sector in India, consider the following statements:
1. Rural electrification has been treated as a Basic Minimum Service under the Prime Minister’s Gramodaya Yojana
2. 100 percent Foreign Direct Investment in power is allowed without upper limit
3. The Union Ministry of Power has signed a Memoranda of Understanding with 14 States

Which of these statements is/are correct?

(a) 1 only

(b) 1 and 2

(d) 3 only

Ans .

Explanation :
Up to 100% FDI allowed in respect of projects relating to electricity generation, transmission and distribution, other than atomic reactor power plants. There is no limit on the project cost and quantum of foreign direct investment.

55. Consider the following statements:
Full convertibility of the rupee may mean:
1. Its free float with the international currencies
2. Its direct exchange with any other international currency at any prescribed place inside and outside the country
3. It acts just like any other international currency

Which of these statements are correct?

(a) 1 and 2

(b) 1 and 3

(d) 1, 2 and 3

Ans .

Explanation :
Capital account convertibility means free conversion of cross-border capital flows, implying that anybody can convert domestic currency into hard currency at the market rate and take the hard currency out of the country.

56. Consider the following statements:
In India, stamp duties on financial transactions are:
1. levied and collected by the State Government
2. appropriated by the Union Government

Which of these statements is/are correct?

(a) Only 1

(b) Only 2

(d) Neither 1 nor 2

Ans .

Explanation :
Stamp duty is a form of tax that is levied on documents. It is levied by the union or the central government and collected and appropriated by the state governments. (Entry 91 in the union list; entry 63 in the state list of Seventh Schedule of Constitution of India)

57. Which amongst the following States has the highest population density as per Census-2001 ?

(a) Kerala

(b) Madhya Pradesh

(d) West Bengal

Ans .

Explanation :
As per the census 2001, West Bengal has the highest population density of 904, Kerala has 819, Madhya Pradesh has 196 and Uttar Pradesh has 689.

58. Life expectancy is the highest in the world in :

(a) Canada

(b) Germany

(d) Norway

Ans .

Explanation :
Life expectancy in Canada is 79.7 years, Germany - 77.8 years, Japan - 80.9, Norway - 78.9 years. Japan has the highest in life expectancy in the world.

59. Which one among the following States has the highest female literacy rate as per the Census 2001?

(a) Chhattisgarh

(b) Madhya Pradesh

(d) Rajasthan

Ans .

Explanation :
As per the census of 2001, Chhattisgarh has the highest female literacy of 51.85, Orissa has 50.51%, Madhya Pradesh - 50.29 and Rajasthan has 43.85%.

60. Which of the following is not a recommendation of the task force on direct taxes under the chairmanship of Dr. Vijay L. Kelkar in the year 2002?

(a) Abolition of Wealth Tax

(b) Increase in the exemption limit of personal income to Rs. 1.20 lakh for widows

(d) Exemption from tax on dividends and capital gains from the listed equity

Ans .

Explanation :
Increase in the exemption limit of personal income to `1.50 lakh for widows was not one of the recommendations of the Kelkar commission in 2002.

61. As per 1991 Census, which one of the following groups of Union Territories had the highest literacy rate?

(a) Chandigarh and Dadra & Nagar Haveli

(b) Delhi and Andaman & Nicobar Islands

(d) Pondicherry and Delhi

Ans .

Explanation :
As per 1991 census, Pondicherry and Delhi had the literacy rates of 75.3 and 74.7 respectively

62. Consider the following statements: As per 2000 Census
1. the two States with the lowest sex ratio are Haryana and Punjab
2. the two States with the lowest population per sq. km. of area are Meghalaya and Mizoram
3. Kerala has both the highest literacy rate and sex ratio

Which of the statements given above is/are correct?

(a) 3 only

(b) 2 and 3

(d) 1 and 3

Ans .

Explanation :
The Statement–2 is not correct. Arunachal Pradesh is the state with lowest population density of 13. In Mizoram it is 42 and Meghalaya it is 103.

63. Consider the following statements:
1. Poverty Reduction and Growth Facility (PRGF) has been established by the International Development Association (IDA) to provide further assistance to low income countries facing high level of indebtedness.
2. Singapore regional Training Institute (STI) is one of the institutes that provides training in macroeconomic analysis and policy and related subject as a part of programme of the IMF institute.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
In 1999, the IMF established the Poverty Reduction and Growth Facility (PRGF) to make the objectives of poverty reduction and growth more central to lending operations in its poorest member countries.

64. Which one of the following statements is not correct?

(a) There is no definition of the Scheduled Tribe in the constitutions of India.

(b) North-East India accounts for a little over half of the country's tribal population.

(d) Lotha is a language spoken in Nagaland.

Ans .

Explanation :
Bulk of the tribal population is found in 5 states, i.e., Madhaya Pradesh, Maharashtra, Orissa, Gujarat and Bihar.

65. Consider the following statements:
1. India is the second country in the world to adopt a National Family Planning Programme.
2. The National Population Policy of India 2000 seeks to achieve replacement level of fertility by 2010 with a population of 111 crores.
3. Kerala is the first state in India to achieve replacement level of fertility.

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 2

(d) 1, 2 and 3

Ans .

Explanation :
Family Planning programme was started in 1952 by Government of India. Kerala is the first state in India to achieve replacement level of fertility.

66. Which one of the following statements is true on the basis of Census - 2001?

(a) Bihar has the highest percentage of the scheduled castes of its population.

(b) The decadal growth of population of India (1991- 2001) has been below 20%.

(d) Pondicherry has the highest sex ratio among the Union Territories.

Ans .

Explanation :
Pondicherry, a Union Territory, has the sex ratio of 1001. Chandigarh has 777, Delhi has 861, Daman and Diu has 710, Dadra and Nagar Haveli has 812.

67. According to the census 2001, which one of the following Indian States has the maximum population in India after Uttar Pradesh?

(a) West Bengal

(b) Maharashtra

(d) Tamil Nadu

Ans .

Explanation :
According to 2001 census, Maharashtra had the maximum population in India after Uttar Pradesh. The total population in Maharashtra is 193,977,000.

68. Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns:

(a) Fiscal Deficit only

(b) Revenue deficit only

(d) Neither fiscal deficit nor revenue deficit

Ans .

Explanation :
Fiscal responsibility and budget management act aims to bring down Fiscal deficit to 2% by 2008 and the revenue deficit to zero by 2008.

69. Which one of the following is the correct sequence in the decreasing order of contribution of different sectors to the Gross Domestic Product of India?

(a) Services - Industry - Agriculture

(b) Services - Agriculture - Industry

(d) Industry - Agriculture - Services

Ans .

Explanation :
Contribution of different sectors to national income. Services – 55.1%, Industry – 26.4%, Agriculture – 18.5%

70. Which one among the following States of India has the lowest density of population?

(a) Himachal Pradesh

(b) Meghalaya

(d) Sikkim

Ans .

Explanation :
Population density of Arunachal Pradesh is 13, Himachal Pradesh is 109, Meghalaya is 103, and Sikkim is 76.

71. As per India’s National Population Policy, 2000, by which one of the following years is it our long-term objective to achieve population stabilization?

(a) 2025

(b) 2035

(d) 2055

Ans .

Explanation :
As per India’s National Population Policy - 2000, by 2045 India will achieve population stability which means that the size of population will not go up.

72. What is the approximate percentage of persons above 65 years of age in India’s current population?

(a) 14-15%

(b) 11-12%

(d) 5-6%

Ans .

Explanation :
The correct answer is (c)

73. Amongst the following States, which one has the highest percentage of rural population to its total population (on the basis of the Census, 2001)?

(a) Himachal Pradesh

(b) Bihar

(d) Uttar Pradesh

Ans .

Explanation :
On the basis of 2001 census, 9.8% of population Himachal Pradesh, 10.5% of population of Bihar, 15% of population of Orissa & 20.8 % of population of Uttar Pradesh live in rural areas.

74. Among the following, which one has the minimum population on the basis of data of Census of India, 2001?

(a) Chandigarh

(b) Mizoram

(d) Sikkim

Ans .

Explanation :
Population of Sikkim is 54,0851. Population of Chandigarh is 901,000, Population of Pondicherry is 974000 and population of Mizoram is 889,000.

75. Which of the following pairs about India’s economic indicator and agricultural production (all in rounded figures) are correctly matched?
1. GDP per capita (current prices): ₹ 37,000
2. Rice : 180 million tons
3. Wheat : 75 million tons

Select the correct answer using the code given below:

(a) 1, 2 and 3

(b) 1 and 2 only

(d) 1 and 3 only

Ans .

Explanation :
Rice production was 96.69 Million tonnes in 2007-08.

76. Consider the following statements with reference to Indira Gandhi National Old Age Pension Scheme (IGNOAPS):
1. All persons of 60 years or above belonging to the households below poverty line in rural areas are eligible.
2. The Central Assistance under this Scheme is at the rate of ₹ 300 per month per beneficiary. Under the Scheme, States have been urged to give matching amounts.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
Indira Gandhi National Old Age Pension Scheme was launched on 19/11/2007. It covers all senior citizens of 65 and above living in of poverty level families. (BPL) Pension will be ` 400 per month, with Centre giving ` 200, and the State matching it. The pension will be credited, wherever possible, into a post office or bank account of the beneficiary.

77. Which one among the following South Asian countries has the highest population density?

(a) India

(b) Nepal

(d) Sri Lanka

Ans .

Explanation :
Overall population density of India is 324. Nepal is 102, Pakistan is 146, Sri Lanka is 280 person per square kilometers.

78. Consider the following statements:
1. Infant mortality rate takes into account the death of infants within a month after birth.
2. Infant mortality rate is the number of infant deaths in a particular year per 100 live births during that year.

Which of the above statements is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
Infant mortality rate indicates the number of infant death under one years of age per 1000 live birth under one year of age.

79. Consider the following statements:
1. Between Census 1951 and Census 2001, the density of the population of India has increased more than three times.
2. Between Census 1951 and Census 2001, the annual growth rate (exponential) of the population of India has doubled.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
The rate of population density increase in India is as follows: Density 1951 – 117 per sq km, 2001 – 324 per sq km; Annual growth rate in population density : 1951 – 1.25%, 2001 – 1.93%

80. Which one of the following statements is an appropriate description of deflation?

(a) It is a sudden fall in the value of a currency against other currencies

(b) It is a persistent recession in both the financial and real sectors of economy

(d) It is a fall in the rate of inflation over a period of time

Ans .

Explanation :
Deflation is a decrease in the prices of goods and services. It occurs when the annual inflation rate falls below 0% which is a negative inflation rate. This is different from Disinflation which is a slow-down in the inflation rate. This is a situation when inflation declines to lower levels but prices continue to rise.

81. Which of the following is/are treated as artificial currency?

(a) ADR

(b) GDR

(d) Both ADR and SDR

Ans .

Explanation :
SDR means special drawing rights. It is also known as paper gold. It is created by IMF or International Monetary Fund.

82. When the Reserve Bank of India announces an increase of the Cash Reserve Rate, what does it mean?

(a) The commercial banks will have less money to lend

(b) The Reserve Bank of India will have less money to lend

(d) The commercial banks will have more money to lend

Ans .

Explanation :
CRR or the Cash Reserve Ratio is that ratio of the total deposits held by a bank which it has to keep with the central bank of country.

83. With reference to India, consider the following statements:
1. The Wholesale Price Index (WPI) in India is available on a monthly basis only.
2. As compared to Consumer Price Index for Industrial Workers (CPIIW), the WPI gives less weight to food articles.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
Weightage of food articles in WPI or the Wholesale Price Index is 22% and in CPI (IW) – 57%. WPI is available on a weekly basis with base year 1993-94.

84. With reference to Indian economy, consider the following statements:
1. The Gross Domestic Product (GDP) has increased by four times in the last 10 years.
2. The percentage share of Public Sector in GDP has declined in the last 10 years.

Which of the statements, given above is/ are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
The correct answer is (b).

85. India is regarded as a country with "Demographic Dividend". This is due to

(a) Its high population in the age group below 15 years.

(b) Its high population in the age group of 15–64 years.

(d) Its high total population.

Ans .

Explanation :
The demographic dividend is a rise in the rate of economic growth due to a rising share of working age people in a population. This usually occurs late in the demographic transition when the fertility rate falls and the youth dependency rate declines.

86. Which one of the following is not a feature of "Value Added Tax" ?

(a) It is multi-point destination-based system of taxation.

(b) It is a tax levied on value addition at each stage of transaction in the production distribution chain.

(d) It is basically a subject of the central government and the state governments are only a facilitator for its successful implementation.

Ans .

Explanation :
VAT, being a 'tax on sale or purchase of goods within a State' is a State Subject by virtue of Entry 54 of State List of the Seventh Schedule of the Constitution of India. Since VAT/Sales tax is a State subject, the Central Government has been playing the role of a facilitator for successful implementation of VAT.

87. Karl Marx explained the process of class struggle with the help of which one of the following theories?

(a) Empirical liberalism

(b) Existentialism

(d) Dialectical materialism

Ans .

Explanation :
Darwin’s "struggle for existence" in natural history is analogous to the class struggle in "human History". So option (c) stands incorrect. The sketch of dialectical materialism given by Karl Marx explains that Dialectical principle is of universal application and all the development is "struggle of opposites" or "conflict of opposites". Thus option d stands correct in this question.

88. All revenues received by the Union Government by way of taxes and other receipts for the conduct of Government business are credited to the ?

(a) Contingency Fund of India

(b) Public Account

(d) Deposits and Advances Fund

Ans .

Explanation :
Under Article 266 (1) of the Constitution of India, all revenues (example tax revenue from personal income tax, corporate income tax, customs and excise duties as well as non-tax revenue such as licence fees, dividends and profits from public sector undertakings etc.) received by the Union government as well as all loans raised by issue of treasury bills, internal and external loans and all moneys received by the Union Government in repayment of loans shall form a consolidated fund.

89. In the context of Indian economy, consider the following statements
1. The growth rate of GDP has steadily increased in the last five years.
2. The growth rate in per capita income has steadily increased in the last five years.

Which of the statements given above is/are correct ?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :

90. In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities?

(a) Commercial Banks

(b) Cooperative Banks

(d) Microfinance Institutions

Ans .

Explanation :
Commercial Banks – 75%
Co-operative Banks – 15%
RRB – 10%

91. Which of the following are the methods of Parliamentary control over public finance in India?
1. Placing Annual Financial Statement before the Parliament
2. Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill
3. Provisions of supplementary grants and vote-onaccount
4. A periodic or at least a mid-year review of programme of the Government against macroeconomic forecasts and expenditure by a Parliamentary Budget Office
5. Introducing Finance Bill in the Parliament

Select the correct answer using the codes given below:

(a) 1, 2, 3 and 5 only

(b) 1, 2 and 4 only

(d) 1, 2, 3, 4 and 5

Ans .

Explanation :
1. Placing Annual Financial Statement before the Parliament
2. Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill
3. Provisions of supplementary grants and voteon- account
5. Introducing Finance Bill in the Parliament

92. The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following?
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

(d) 1, 2 and 3

Ans .

Explanation :
All the statements are correct.

93. In India, deficit financing is used for raising resources for

(a) economic development

(b) redemption of public debt

(d) reducing the foreign debt

Ans .

Explanation :
Deficit financing refers to the difference between expenditure and receipts. In public finance, it means the govt. is spending more than what it is earning. Deficit financing is a necessary evil in a welfare state as the states often fail to generate tax revenue which is sufficient enough to take care of the expenditure of the state. The basic intention behind deficit financing is to provide the necessary impetus to economic growth by artificial means.

94. Priority Sector Lending by banks in India constitutes the lending to

(a) agriculture

(b) micro and small enterprises

(d) All of the above

Ans .

Explanation :
Priority sector lending constitutes the lending to– agriculture, micro and small enterprises, micro credit, education, housing and weaker sections.

95. Which one of the following groups of items is included in India’s foreign-exchange reserves?

(a) Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries

(b) Foreign-currency assets, gold holdings of the RBI and SDR’s

(d) Foreign-currency assets, gold holdings of the RBI and loans from the World Bank

Ans .

Explanation :
In India’s foreign exchange reserve, it includes foreign currency deposits, bonds, gold reserves, SDRs and IMF reserve position. Foreign exchange reserves are an important part of the international investment position of a country

96. Who among the following constitute the National Development Council?
1. The Prime Minister
2. The Chairman, Finance Commission
3. Ministers of the Union Cabinet
4. Chief Ministers of the States

Select the correct answer using the codes given below.

(a) 1, 2 and 3 only

(b) 1, 3 and 4 only

(d) 1, 2, 3 and 4

Ans .

Explanation :
The National Development Council includes the Prime Minister, Union ministers, Chief ministers of all states, administrative heads of the Union Territories and members of the planning commission.

97. The national income of a country for a given period is equal to the

(a) total value of goods and services produced by the nationals

(b) sum of total consumption and investment expenditure

(d) money value of final goods and services produced

Ans .

Explanation :
National Income is the money value of all the final goods and services produced by a country during a period of one year. National Income consists of a collection of different types of goods and services of different types.

98. Which of the following constitute Capital Account?
1. Foreign Loans
2. Foreign Direct Investment
3. Private Remittances
4. Portfolio Investment

Select the correct answer using the codes given below.

(a) 1, 2 and 3

(b) 1, 2 and 4

(d) 1, 3 and 4

Ans .

Explanation :
Capital Account comprises of Foreign loans, Foreign Direct Investment and Portfolio Investment. Capital Account is the net result of public and private international investments flowing in and out of a country. Portfolio investment is the buying of shares and bonds. FDI is the investments by foreigners in a country or the citizens investing in foreign countries.

99. In the context of Indian economy, 'Open Market Operations' refers to

(a) borrowing by scheduled banks from the RBI

(b) lending by commercial banks to industry and trade

(d) None of the above

Ans .

Explanation :
It is an activity by a central bank(RBI) to buy or sell government securities. The aim of open market operations is to manipulate the short term interest rate and the supply of base money in an economy, and indirectly control the total money supply.

100. Consider the following statements regarding a No- Confidence Motion in India :
1. There is no mention of a No-Confidence Motion in the Constitution of India.
2. A Motion of No-Confidence can be introduced in the Lok Sabha only.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
Article 75 says that the Council of Ministers shall be collectively responsible to Loksabha. In other words, Lok Sabha can remove them by passing a noconfidence motion. But the word “no confidence motion” itself is not given in Constitution itself, it comes from Rule 198 of Lok Sabha Rules. Rajya Sabha cannot pass or remove council of ministers by passing no-confidence motion. No confidence motion can be introduced, only in Lok Sabha.

101. The main objective of the 12th Five-Year Plan is

(a) inclusive growth and poverty reduction

(b) inclusive and sustainable growth

(d) faster, sustainable and more inclusive growth

Ans .

Explanation :
12th Five Year Plan of the Government of India (2012-17) aims at faster, sustainable and more inclusive growth.

102. The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time Liabilities’, sometimes appearing in news, are used in relation to

(a) banking operations

(b) communication networking

(d) supply and demand of agricul tural products

Ans .

Explanation :
Marginal Standing Facility rate is the rate at which banks borrow funds overnight from the Reserve Bank of India (RBI) against approved government securities. Net Demand and time liability is the sum of demand and time liability of Banks with public and other banks wherein assets with other banks is subtracted to get net liability of other bank.

103. With reference to Indian economy, consider the following statements:
1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans .

Explanation :
Both statements are correct.

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