Prelims 2022 Economy Test Paper-1 (Solutions

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Prelims 2022 Economy Test Paper-1 (Solutions)
Time Allowed: Two Hours (120 Minutes)

Total No of Questions: 100
Maximum Marks: 200 (2 Marks per Questions)
Wrong Answer Negative Marking: One Third (-0.66 marks)
Q1
Consider the following:
1 Gross Fixed Capital Formation
2 Change in Stocks
3 Valuables
4 Exports-Imports
5 Net Taxes on Products
Which of the above can be included in Expenditure Components of GDP ?
A 1, 2, 3 and 4
B 1, 2 and 4
C 1, 2, 3 and 5
D 3, 4 and 5
Ans A
https://pib.gov.in/PressReleasePage.aspx?PRID=1801835
Q2
Recently at COP26 summit in Glasgow, UK, PM Modi announced that India will achieve the Net Zero carbon emissions
by year
A 2050
B 2060
C 2070
D 2080
Ans C
Q3
Consider the following statements:
1 National Monetisation Pipeline (NMP) estimates aggregate monetisation potential of Rs 10 lakh crores.
2 Ministry of Finance in consultation with infrastructure line ministries has prepared the report on NMP.
3 NMP is meant to serve as an essential roadmap for the Asset monetisation of various brownfield infrastructure assets.
4 Monetization through disinvestment and monetization of non-core assets have not been included in the NMP.
Which of the statements given above is/are correct ?
A 2 and 3
B 3 and 4
C 1, 2 and 4
D 1, 2, 3 and 4
Ans B
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Q4
Which of following measures should be taken when an economy is going through inflationary pressures?
1. Direct taxes should be increased.
2. Interest rate should be reduced.
3 Public spending should be increased.
Select the correct answer using the code given below.
A 1 only
B 2 only
C 2 and 3
D 1 and 2
Ans A
When direct tax increases then public will have less money for consumption hence demand for goods will fall and
inflation will come under control.
If Interest rate is reduced then cost of borrowing will be lower and public will take loan for expenditure and inflation will
rise.
If public spending is increased then public will have more money to spend and inflation will rise.
Q5
Recently in news, Xiaomi India evaded Rs 653 Cr Custom duty. Which Govt agency investigates the matters relating to
violation of Custom act
A Directorate of Revenue Intelligence
B Enforcement Directorate
C Income Tax Department
D Serious Fraud Investigation Office
Ans A
Q6
1. SEBI is called the Market regulator in India.
2. Any person aggrieved by the order of SEBI, may file an appeal to Securities Appeallate tribunal.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 or 2
Ans C
https://www.thehindu.com/business/markets/sebi-unveils-investor-charter/article37549577.ece
http://sat.gov.in/
Q7
Generally Cost of Debt is lower than cost of Equity because
A Interest payment on debt is tax deductible
B Equity capital comes from funds invested by shareholders
C Debt reflects an obligation
D Debt capital is required to be repaid after agreed time period
Ans A
Interest on debt is expenditure for business hence tax deductible while dividend is appropriation of profit not an expenses
for business.
Suppose Company has profit before interest and tax Rs. 1000, Tax rate 30%, Company pay interest Rs. 100 and Diviend
Rs. 100.
If company pay Interest on Debts If company do not have to pay Interest on Debts
PBIT 1000 1000
Less: Interest 100 0
PBT 900 1000
Less: Tax @30% 270 300
PAT 630 700
Less: Dividend 100 100
Profit after Dividends 530 600
Cost of Rs. 100 (Interest on debt) is Rs. 70 to company because interest exps can be claimed under income tax.
Q8
As per RBI, Domestic Systemically Important Banks in India are
1 SBI
2 ICICI
3 PNB
4 HDFC
5 Canara Bank
A 1, 2, 3 and 4
B 1, 2 and 4
C 1, 2, 3 and 5
D 3, 4 and 5
Ans B
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53045
Q9
Which Interest Rate Benchmark used in financial market will cease or no longer be representative immediately after
31st December, 2021 ?
A Secured Overnight Financing Rate (SOFR)
B Sterling Overnight Interbank Average rate (SONIA)
C Mumbai Interbank Offered Rate (MIBOR)
D London Interbank Offered rate (LIBOR)
Ans D
https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12128&Mode=0
Q10
Consider the following statements wrt India's International Investment Position, December 2021
1. India is a debtor nation.
2. Reserve assets accounted for more than 65% of Indian residents’ foreign assets.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
Q11
Unicorn is a term used in the venture capital industry to describe a privately held startup company with a value of over
A $1 Billion
B $5 Billion
C $10 Billion
D $500 Million
Ans A
https://www.investindia.gov.in/indian-unicorn-landscape
Q12
Consider the following statements wrt recently approved National Land Monetization Corporation by Cabinet:
1 National Land Monetization Corporation (NLMC) will be set up by Department of Public Enterprise, Ministry of Finance
as a wholly owned Government of India company.
2 NLMC will have initial authorized share capital of Rs 100 crore.
3 NLMC will undertake monetization of surplus land and building assets of Central Public Sector Enterprises (CPSEs)
and other Government agencies.
A 1 and 3
B 3 only
C 1 and 2
D 1, 2 and 3
Ans A
Q13
Which of the following are the Public Private Partnership Projects for construction of National highways ?
1 Hybrid Annuity Model
2 BOT Toll
3 BOT Annuity
4 EPC
A 1, 2 and 3
B 1, 2, 3 and 4
C 2, 3 and 4
D 1 and 4
Ans A
Q14
Which has a major share in India’s foreign exchange reserves
A Gold
B Reserve Tranche position in IMF
C Special drawings rights-SDR
D Foreign currency assets
Ans D
https://www.rbi.org.in/Scripts/WSSView.aspx?Id=25249
Q15
Which of the following are the instruments of Sustainable Finance:
1. Issuance of Green Bond.
2. Issuance of Social Bond.
3. Issuance of Sustainability Linked Bond.
A 1, 2 and 3
B 3 only
C 1 and 2
D 1 and 3
Ans A
https://www.icmagroup.org/sustainable-finance/
https://www.youtube.com/watch?v=3a33UfMVw2A&t=17s
Q16
Which act as a bank for Central banks
A Bank for International Settlements
B World Bank
C International Monetary Fund
D US Federal Reserve
Ans A
https://www.bis.org/about/index.htm?m=1001
Q17
Consider the following statements wrt Govt Sovereign Credit ratings:
1 Ratings upgrade strengthen the Indian Rupee.
2 A downgrade in Credit ratings increases the borrowing costs.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
High credit rating means an assurance about the safety of the money and that it will be paid back with interest on time.
Higher the credit rating, lower will the rate of interest. Rating upgrade will improve foreign debt inflows and in turn
strengthen the rupee.
Q18
Digital Payment Index capture the extent of digitisation of payments across the India. It is released by
A RBI
B NPCI
C NITI Aayog
D Ministry of Finance
Ans A
Q19
Which of the following leads to decrease in money multiplier ?
1 Increase in Currency Deposit ratio (CDR)
2 Increase in Reserve Deposit ratio (RDR)
3 Increase in Banks Branches in the country
4 Increase in Financial Inclusion.
A 1 and 2
B 1, 2 and 4
C 3 and 4
D 2, 3 and 4
Ans A
Increase in CDR and RDR means banks will have less money for lending hence money multiplier by banks will decrease.
More branches means more people will deposit money and Financial inclusion-Jan dhan account –more deposit hence
money multiplier will increase.
Q20
India attracted highest ever FDI Inflows of US$ 81.72 Billion during 2020-21. India's rank also improved in FDI
restrictiveness index. FDI restrictiveness index is released by
A OECD
B World Bank
C IMF
D UNCTAD
Ans A
Source: RBI Annual report 2020-21 page no 95
https://www.oecd.org/investment/fdiindex.htm
Q21
Which of the following options available with RBI to control inflation ?
1 Increase the Reverse Repo rate
2 Increase the Repo rate
3 Sale of Govt Securities
4 Increase the SLR
A 2, 3 and 4
B 1, 2 , 3 and 4
C 1, 2 and 3
D 1 and 4
Ans B
In all cases money supply in economy will fall and inflation will come down.
Q22
1 PM Gati Shakti is a digital platform.
2 PM Gati Shakti will bring 16 Ministries including Railways and Roadways together for integrated planning and
coordinated implementation of infrastructure connectivity projects.
3 PM Gati Shakti will incorporate the infrastructure schemes of various Ministries and State Governments.
4 PM Gati Shakti will reduce the logistics cost
A 2 and 3
B 3 and 4
C 1, 2 and 4
D 1, 2, 3 and 4
Ans D
Q23
Which of the following serves as a watchdog against unfair trade practices resorted by the producers/ exporters in
foreign countries.
A Directorate of Revenue Intelligence- DRI
B Directorate of Goods and Service Tax Intelligence
C Enforcement Directorate- ED
D Directorate General of Trade Remedies-DGTR
Ans D
Q24
How rise in Crude oil price will impact India ?
1 Inflation will rise if price rise passed on to consumers
2 Fiscal deficit will rise if price rise not passed on to consumers
3 Rupee will depreciate
A 1 and 2
B 1, 2 and 3
C 1 and 3
D 2 and 3
Ans B
1 Inflation will rise if price rise passed on to consumers
2 Fiscal deficit will rise if price rise not passed on to consumers
3 Rupee will depreciate since payment for crude oil will be made in dollars hence demand for dollars will rise and rupee
depreciate.
Q25
The term 'Saudi Contract Price' sometimes found in news, refers to ]
A Benchmark for International Prices of LPG
B Benchmark for International Prices of Crude oil
C Benchmark for International Prices of Gold
D Benchmark for International Prices of Minerals
Ans A
https://www.pib.gov.in/PressReleasePage.aspx?PRID=1805736
Q26
Consider the following statements wrt 15th Finance Commission:
1. It recommended 41% share in Central divisible pool for the states.
2. It has not recommended any sector specific grant.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans A
https://prsindia.org/policy/report-summaries/report-15th-finance-commission-2021-26
Q27
"Bali Peace Clause" sometimes in news is related to
A WTO
B UN
C WHO
D NATO
Ans A
https://pib.gov.in/PressReleseDetailm.aspx?PRID=1579162
Q28
Which of the following are All India Financial Institutions:
1 National Bank for Financing Infrastructure and Development
2 EXIM Bank
3 NABARD
4 National Housing Bank
5 SIDBI
A 1, 2 , 3 and 5
B 1, 2, 3, 4 and 5
C 1 ,3 and 5
D 2 and 4
Ans B
https://www.rbi.org.in/scripts/FS_PressRelease.aspx?prid=53392&fn=14
Q29
Currently G20 Troika countries are ]
A Italy, Indonesia and India
B India, Brazil and South Africa
C Saudi Arabia, Italy and Indonesia
D Japan, Saudi Arabia and Italy
Ans A
https://mea.gov.in/press-releases.htm?dtl%2F34551%2FIndia_enters_G20_Troika
https://g20.org/about-the-g20/#how
Q30
Consider following statements wrt Reserve Bank Innovation Hub:
1 It is a wholly-owned subsidiary of RBI
2 it will bring world class innovation to financial sector in India
3 RBIH would be guided and managed by a Governing Council (GC) led by a Chairperson
4 It has been set up at Mumbai.
A 2 and 3
B 3 and 4
C 1, 2 and 3
D 1, 2, 3 and 4
Ans C
https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1202
Q31
Recently, Which of the following Indian company issued largest ever foreign currency Jumbo bond worth $4 Billion ]
A Reliance Industries
B TCS
C Infosys
D Indian Oil
Ans A
https://economictimes.indiatimes.com/markets/bonds/reliance-raises-4b-in-largest-ever-foreign-currency-bonds-
issue/articleshow/88745022.cms?from=mdr
Q32
Recently, RBI announces USD/INR 2 years Sell/Buy Swap Auction of $5 Billion. What will be the impact ?
1. Rupee will strengthen
2. Help in controlling Inflation
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
A bank shall buy US Dollars from the Reserve Bank and simultaneously agree to sell the same amount of US Dollars
at the end of the swap period.
Impact
It will provide liquidity to the foreign exchange market. Dollar inflow into the market will strengthen the rupee. Further
RBI will get INR from Swap hence liquidity in the banking system will be reduced and it will help to control the inflation.
Q33
Recently, RBI issued a revised Prompt Corrective Action (PCA) framework for Scheduled commercial banks. What are
the key areas for monitoring?
A Capital, Asset Quality and Leverage
B Capital, Asset Quality and Profitability
C Capital and Asset Quality
D Profitability and Leverage
Ans A
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12186&Mode=0
Q34
Consider following statements wrt Co-Lending model to Priority Sector
1 In CLM, Banks can co-lend with NBFCs/HFCs.
2 Primary focus of CLM is to improve flow of credit to unserved and underserved sector of economy.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
Q35
Recently, India achieved the ambitious target of merchandise exports for 2021-22. Target was
A US$ 400 billion
B US$ 500 billion
C US$ 600 billion
D US$ 300 billion
Ans A
Q36
1 NBFC cannot accept demand deposits.
2 NBFCs do not form part of the payment & settlement system and cannot issue cheques drawn on itself.
3 Deposit insurance facility of DICGC is available to depositors of NBFCs.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans A
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=92
Q37
Global watchdog for combating money laundering and terror financing is
A World Bank
B IMF
C UN
D Financial Action Task Force
Ans D
https://www.fatf-gafi.org/about/
Q38
1 Rise in Interest rate at home often leads to an appreciation of Domestic currency
2 Rise in inflation can make export less competitive in Global market.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
Rise in the interest rates at home often leads to an appreciation of the domestic currency.
Suppose government bonds yield in US is 2% and in India is 6%, then investors from US will be attracted by the high
interest rates in India and will buy the Indian currency and sell Dollars for investments. Hence Demand for Indian
Currency will increase and it will appreciate.
As Inflation can lead to higher input costs for export which makes a nation's exports less competitive in global markets.
Q39
Adjusted Gross Revenue (AGR) sometimes seen in news is related to
A Banking Companies
B Telecom companies
C Insurance companies
D IT companies
Ans B
Q40
Consider the following statements wrt RBI Microfinance loan directions 2022:
1 MF loan is a collateral free loan given to household having annual household income upto 1 lac
2 EMI shall not be more than 50% of Monthly household income
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans B
Q41
As per the ownership pattern of Government of India dated securities, which has the highest share
A RBI
B Commercial banks
C Insurance companies
D Provident Funds
Ans B
Q42
Consider the following statements wrt First advance estimates of Horticultural Crops for 2021-22
1 Area increased but production decreased
2 Fruits production increased but production of vegetables and spices decreased.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
Q43
For the First time, India will host the G20 summit in
A 2022
B 2023
C 2024
D 2025
Ans B
https://www.pib.gov.in/PressReleasePage.aspx?PRID=1798510
Q44
Consider the following statements wrt First advance estimates of Horticultural Crops production for 2021-22:
1 Banana has highest share in Fruits.
2 Onion has highest share in vegetables.
3 Garlic has highest share in spices.
A 1 only
B 1 and 3
C 2 and 3
D 1, 2 and 3
Ans B
Q45
Decacorn is a start-up company having valuation of more than
A $1 Billion
B $10 Billion
C $50 Billion
D $100 Billion
Ans B
https://www.investindia.gov.in/indian-unicorn-landscape
Q46
Foreign exchange reserves of a country increases by
1 Import
2 Export
3 FDI in country
4 Foreign Inward remittance
A 1, 2 and 3
B 1, 2, 3 and 4
C 2, 3 and 4
D 1 and 4
Ans C
Q47
Periodic Labour Force survey is conducted by the
A Labour Bureau
B National Statistical Office
C NITI Aayog
D EPFO
Ans B
Q48
Consider the following statements wrt National Bank for Financing Infrastructure and Development (NaBFID):
1 NaBFID will be set up as a development financial institution.
2 Central Government shall hold at least twenty-six per cent of the shares of the NaBFID at all times.
3 Head office of the NaBFID shall be in New Delhi.
4 Authorised share capital of the NaBFID shall be One Lakh crore rupees.
A 1 and 2
B 3 and 4
C 1, 2 and 4
D 1, 2, 3 and 4
Ans C
https://egazette.nic.in/WriteReadData/2021/226210.pdf
Q49
How companies can reward the shareholders?
1 Through Payment of Dividends
2 Issue of Bonus Shares
3 Buy Back of Shares at premium
A 1 and 3
B 1, 2 and 3
C 1 and 2
D 2 and 3
Ans B
https://gailonline.com/PressRelease31032022.html
Q50
Which criteria got the highest weight for Horizontal Devolution among states of aggregate share of 41% in divisible pool
recommended by 15th Finance Commission ?
A Population
B Area
C Income distance
D Demographic performance
Ans C
https://prsindia.org/policy/report-summaries/report-15th-finance-commission-2021-26
Q51
Consider the following statements wrt India's External Debt as at end of 31-12-2021
1.Commercial Borrowings remained the largest component
2 US Dollar denominated Debt remained the largest component
3 Share of outstanding debt of Non-Financial corporations was highest
A 1 and 2
B 1 and 3
C 2 and 3
D 1, 2 and 3
Ans D
https://dea.gov.in/sites/default/files/Quarterly%20Report%20on%20India%27s%20External%20Debt%20as%20at%20
end-December%202021.pdf
Q52
The Chairmen of Central Public Sector Enterprises are selected by the
(a) Banks Board Bureau
(b) Public Enterprises Selection Board
(c) Union Ministry of Finance
(d) Management of concerned bank
Ans B
https://pesb.gov.in/Home/About
Q53
As per India's Sovereign Credit rating it is in lowest investment grade. What India should do to improve Rating ?
1 Improve the Tax collection
2 Stimulate GDP Growth
3 Reduce Debt to GDP ratio
4 Reduce the Fiscal Deficit
A 1 and 4
B 1, 2 and 3
C 1, 2, 3 and 4
D 2, 3 and 4
Ans C
All cases will improve india’s loan repayment capacity.
Q54
0% Real Interest Rate means
A Inflation minus Interest rate = 0
B 0% Repo rate
C Repo rate minus SDF = 0
D Banks Lending rate minus Deposit rate = 0
Ans A
Real Interest rate means interest rate adjusted for inflation.
https://twitter.com/udaykotak/status/1513011269829525509?s=20&t=Ixt0zZn1tXbrXwKgfAqUZQ
Q55
1 Ministry of Finance has developed eSHRAM portal for creating a National Database of Unorganized Workers
2 Universal Account Number is a 12 digits number uniquely assigned to each unorganized worker after registration on
eSHRAM portal.
3 After registering, Unorganized Workers will get an Accidental Insurance cover of 2 Lacs under PMSBY
A 2 only
B 3 only
C 2 and 3
D 1, 2 and 3
Ans C
https://eshram.gov.in/faqs
Q56
“Project Readiness Financing (PRF) Loan” sometimes seen in news, is granted by
A Asian Development Bank
B World Bank
C IMF
D Asian Infrastructure Investment Bank
Ans A
Q57
Consider the following statements wrt to Central Government Debt:
1. The Government raises funds primarily from the domestic market using market-based and fixed rate instruments to
finance its fiscal deficit.
2. The share of short-term debt to the total debt remains low reducing the roll-over risk.
3. The currency risk associated with debt portfolio continues to be low since it is predominantly of domestic origin and
denominated in domestic currency.
4. The low share of external debt provides a safety net from volatility in the international financial markets.
A 1 and 4
B 1, 2 and 3
C 1, 2, 3 and 4
D 2, 3 and 4
Ans C Page no 5
https://dea.gov.in/sites/default/files/Final%20Status%20paper%202020-21.pdf
Q58
Tax buoyancy is a
A measure of growth in tax revenues as compared to GDP growth
B measure of growth in tax revenues as compared to Non tax revenue growth
C measure of growth in tax revenues
D measure of growth in tax revenues against the Budgeted Estimates
Ans A
Q59
Which of the following Budget document presented to the Parliament, are mandated by Constitution of India ?
1 Annual Financial Statement
2 Demands for Grants
3 Finance Bill
4 Fiscal Policy Statements
A 1 and 4
B 1, 2 and 3
C 1, 2, 3 and 4
D 2, 3 and 4
Ans B
https://www.indiabudget.gov.in/doc/Key_to_Budget_Document_2022.pdf
Q60
Which is the predominant source for financing the Gross Fiscal Deficit of the Central Government
A Ways and Means advance from RBI
B Treasury Bills
C Cash Management Bills
D Dated securities
Ans D
Page no 14
https://dea.gov.in/sites/default/files/Final%20Status%20paper%202020-21.pdf
Q61
Consider the following statements wrt to Contingency Fund of India:
1 it is an imprest placed at the disposal of the Prime Minister of India to facilitate meeting of urgent unforeseen
expenditure by the Government pending authorization from the Parliament.
2 Article 267 of the Constitution authorises the existence of a Contingency Fund of India
3 The corpus of the Contingency Fund as authorized by Parliament presently stands at Rs. 30,000 crore.
A 2 only
B 3 only
C 2 and 3
D 1, 2 and 3
Ans C
Q62
Which has the highest share in expenditure as per Union budget 2022-23 ?
A Interest payment
B Subsidy
C Defence
D Pension
Ans A page 10
https://www.indiabudget.gov.in/doc/Budget_at_Glance/budget_at_a_glance.pdf
Q63
Which of the following schemes comes under Core of the Core scheme ?
1 Mahatma Gandhi National Rural employment guarantee program
2 National Social Assistance Progam
3 Jal Jeevan Mission
4 PM-Kisan
A 1 and 2
B 3 and 4
C 1, 2, 3 and 4
D 1, 3 and 4
Ans A page 16
https://www.indiabudget.gov.in/doc/Budget_at_Glance/budget_at_a_glance.pdf
Q64
Recently, Govt refused to renew the registration of Mother Teresa's Missionaries of Charity under Foreign contribution
regulation act. Which ministry is the nodal agency for FCRA registration
A Ministry of Finance
B Ministry of Home affairs
C Ministry of External affairs
D Ministry of Commerce and Industry
Ans B
Q65
Consider the following statements wrt to RBI Retail Direct Scheme:
1. Retail Direct scheme is a one-stop solution to facilitate investment in Government Securities by Individual Investors.
2. Under this scheme Individual Retail investors can open a Gilt Securities Account – “Retail Direct Gilt (RDG)” Account
with the RBI.
3. Using RDG account, retail investors can buy and sell government securities through the RBI Retail Direct online
portal.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans D
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=145#AS1
Q66
Fiscal Monitor is prepared by the
A World Bank
B IMF
C WEF
D UN
Ans B
Source: RBI Annual report 2020-21 page no 1

https://www.imf.org/en/Publications/FM
Q67
The World Bank has set two ambitious goals to achieve by 2030. These are
1 To end extreme poverty, the Bank's goal is to decrease the percentage of people living with less than $1.90 a day to
no more than 3 percent by 2030.
2 To promote shared prosperity, the goal is to promote income growth of the bottom 40 percent of the population in
each country.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
https://www.worldbank.org/en/who-we-are
https://www.worldbank.org/en/news/feature/2013/04/17/ending_extreme_poverty_and_promoting_shared_prosperity
Q68
Wages rates for workers under MGNREGA are notified and revised based on ]
A CPI for Industrial workers
B CPI for Agricultural Labourers
C CPI for Rural Labourers
D CPI for Rural
Ans B
https://pib.gov.in/Pressreleaseshare.aspx?PRID=1558919
Q69
The Central Government notified the following as factors that constitute failure to achieve the inflation target:
1 the average inflation is more than the upper tolerance level of the inflation target for any three consecutive quarters;
2 the average inflation is less than the lower tolerance level for any three consecutive quarters.
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
Ans C
https://www.rbi.org.in/scripts/FS_Overview.aspx?fn=2752
Q70
As per World Migration Report 2022, Which country has the largest emigrant population in the world
A India
B China
C Mexico
D Russia
Ans A
https://worldmigrationreport.iom.int/wmr-2022-interactive/
Q71
1. RBI is vested with the responsibility of conducting monetary policy under the Reserve Bank of India Act, 1934.
2. The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.
3. Inflation target is set by the RBI, in consultation with the Government of India, once in every five years.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans A
https://www.rbi.org.in/scripts/FS_Overview.aspx?fn=2752
Q72
Recently, Sensodyne toothpaste and Sure Vision was charged with penalties of Rs 10 lacs for False and Misleading
advertisements. Which authority takes the action against false and misleading advertisements ]
A Central Consumer Protection Authority
B RBI
C NCLT
D Consumer Protection Councils
Ans A
Q73
Consider the following statements wrt Surety Bonds:
1. As per IRDAI guidelines, only General Insurance Companies can issue Surety Bonds.
2. As per Union Budget 2022-23, Use of surety bonds as a substitute for bank guarantee will be made acceptable in
government procurements.
3. Use of surety bonds as a substitute for bank guarantee will reduce indirect cost for suppliers and work-contractors.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans D
https://www.irdai.gov.in/ADMINCMS/cms/frmGuidelines_Layout.aspx?page=PageNo4623
Q74
Which is the biggest reason for Women migration in India
A Employment
B Marriage
C Education
D Business
Ans B
https://www.thehindu.com/data/india-migration-patterns-2011-
census/article28620772.ece#:~:text=The%20most%20common%20reason%20for,for%20marriage%2C%20the%20d
ata%20shows.
Q75
Consider the following statements wrt taxation of virtual digital assets announced in Union Budget 2022-23:
1. Any income from transfer of any virtual digital asset shall be taxed at the rate of 10 per cent..
2. Gift of virtual digital asset is also to be taxed in the hands of the recipient.
3. No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost
of acquisition.
4. Loss from transfer of virtual digital asset cannot be set off against any other income.
A 1, 2 and 3
B 1 and 4
C 2, 3 and 4
D 1, 3 and 4
Ans C
Q76
Special 301 Report, Sometimes seen in News, is released by ]
A Office of the US Trade Representative
B World Economic Forum
C World Bank
D Financial Action Task Force
Ans A
https://indianexpress.com/article/india/ip-protection-us-puts-india-on-priority-watch-list-7297579/
Q77
Consider the following statements wrt Economic Survey 2021-22:
1. Repo rate was maintained at 4 per cent.
2. Foreign Exchange Reserves crossed US$ 700 billion.
3. As of end-November 2021, India was the fourth largest forex reserves holder in the world after China, Japan and
Switzerland.
4. India has become 3rd largest start-up ecosystem in the world after US and China.
A 1, 2 and 3
B 1 and 4
C 2, 3 and 4
D 1, 3 and 4
Ans D
Q78
Voluntary Retention Route (VRR) ,sometimes, seen in news is related to
A Foreign Portfolio Investors
B External Commercial Borrowings
C Investment in India by NRIs
D Foreign Direct Investments
Ans A
Q79
As per Economic Survey 2021-22, Wholesale inflation based on Wholesale Price Index (WPI) rose to 12.5 per cent
during 2021-22 (April to December). This has been attributed to:
1 Low base in the previous year,
2 Pick-up in economic activity,
3 Sharp increase in international prices of crude oil and other imported inputs,
4 High freight costs.
A 2 and 3
B 1 and 4
C 1, 2, 3 and 4
D 1, 3 and 4
Ans C
Q80
Quad states, sometimes, seen in news are
A Australia, US, India and Japan
B UK, Australia, India and Canada
C Brazil, South Africa, India and China
D UK, US, India and Canada
Ans A
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1757944
Q81
As per Economic Survey 2021-22, which of the following combination will provide an adequate buffer against possible
global liquidity tapering in 2022-23.
1. High foreign exchange reserve
2. Sustained foreign direct investment,
3. Rising export earnings
A 1 and 2
B 1 and 3
C 2 and 3
D 1, 2 and 3
Ans D
Q82
Consider the following statements wrt Economic Survey:
1. This year Economic Survey has shifted from the two-volume format plus separate volume for statistical tables of
recent years to a single volume plus a separate volume for statistical tables.
2. The central theme of this year’s Economic Survey is the “Agile approach”, implemented through India’s economic
response to the COVID-19 Pandemic shock.
3. Economic Survey is presented after the Union Budget.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans A
Q83
Consider the following statements wrt recently introduced SDF by RBI:
1.Through an amendment in 2018, RBI Act empowered the Reserve Bank to introduce the Standing Deposit Facility
(SDF) – an additional tool for absorbing liquidity without any collateral.
2. The SDF rate will be 25 basis points (bps) below the policy repo rate.
3. The SDF would replace the Fixed Rate Reverse Repo (FRRR) as the floor of the LAF corridor.
4. Deposits under the SDF shall be reckoned as balances eligible for the maintenance of the cash reserve ratio (CRR)
and statutory liquidity ratio (SLR).
A 2 and 3
B 1 and 4
C 1, 2 and 3
D 1, 2, 3 and 4
Ans C
https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53536
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53539#AN1
Q84
Reserve Bank provides financial accommodation to State Governments / Union Territories (UTs) through
1. Ways and Means Advances (WMA),
2. Special Drawing Facility (SDF)
3. Overdraft (OD)
A 1 and 2
B 1 and 3
C 2 and 3
D 1, 2 and 3
Ans D
Q85
Consider the following statements wrt recently held 5th BIMSTEC Summit:
1. 5th BIMSTEC Summit hosted in virtual mode by India, the current chair of BIMSTEC.
2. BIMSTEC Charter was signed and adopted during the Fifth BIMSTEC Summit.
3. Member States of BIMSTEC are Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.
A 1 and 2
B 3 only
C 2 and 3
D 1, 2 and 3
Ans C
https://www.mea.gov.in/press-releases.htm?dtl/35093/5th+BIMSTEC+Summit
Q86
National Statistical Office, under Ministry of Statistics & Programme Implementation has been bringing out the
employment related statistics in the formal sector using information on the number of subscriber who have subscribed
under the following schemes:
1. Employees’ Provident Fund (EPF) Scheme,
2. Employees’ State Insurance (ESI) Scheme
3. National Pension Scheme (NPS)
4. Atal Pension Yojana (APY)
A 2 and 3
B 1 and 4
C 1, 2 and 3
D 1, 2, 3 and 4
Ans C
https://static.pib.gov.in/WriteReadData/specificdocs/documents/2022/jan/doc20221258001.pdf
Q87
Government has established two Defence Industrial Corridors (DICs) in the country. These are located in
A West Bengal and Karnataka
B UP and Tamil Nadu
C Orissa and Haryana
D Jharkhand and Maharastra
Ans B
Q88
Which of the following measures will help in Job Creation in Indian Economy ?
1 Increasing Govt spending on Infrastructure
2 Reduction in Interest rate by RBI
3 Reduction in Tax rate by Govt
4 Export incentives by Govt
A 1, 2, and 3
B 1, 3 and 4
C 1, 2, 3 and 4
D 2 and 4
Ans C
Jobs will be created when spending/consumption increases in Economy or export increases.
1 In case of Increased Govt spending, public will have more money to spend hence consumption will increase and
production will also increase which will lead to more job creation.
2 In case of Reduction in Interest rate by RBI, Borrowing cost will be lower and public will borrow more and consumption
will increase
3 In case of Reduction in Tax rate by Govt, public will have more money to spend
4 In case of Export incentives by Govt, Export will be increased hence production will also increase which will lead to
more job creation.
Q89
Which of the following expenditure may be charged on Consolidated Fund of India and are not required to be voted by
the Lok Sabha ?
1 Interest on Loans raised by Govt
2 Salary of C&AG of India
3 Payments made to satisfy decrees of courts.
4 Salary of CVC
A 1, 2 and 3
B 1 and 2
C 3 and 4
D 1, 2, 3 and 4
Ans D
Q90
Which state was featured the top performer in Export Preparedness Index 2021 ranking given by NITI Aayog ?
A Gujarat
B Maharashtra
C Tamil Nadu
D Telangana
Ans A
Q91
Consider the following statements wrt Financial Inclusion Index:
1 NITI Aayog introduced Financial Inclusion Index to capture the extent of financial inclusion across the country.
2 0 represents complete financial exclusion and 100 indicates full financial inclusion.
3 The Financial Inclusion Index has been constructed without any base year.
A 1 and 2
B 3 only
C 2 and 3
D 1, 2 and 3
Ans C
Q92
Consider the following statements wrt National Asset Reconstruction Company Limited (NARCL):
1. NARCL has been set up by the banks.
2. PSBs will maintain 51% ownership in NARCL.
3. NARCL proposes to acquire stressed loan assets of about Rs. 5 Lakh crore
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans A
Q93
As per IRDAI, Domestic Systemically Important Insurers in India are
1 United India Insurance Company Limited
2 General Insurance Corporation of India
3 New India Assurance Co. Ltd
4 ICICI Lombard General Insurance Company Ltd
5 Life Insurance Corporation of India
A 1, 2, 3 and 5
B 1, 3 and 4
C 2, 3 and 5
D 2, 4 and 5
Ans C
https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_Layout.aspx?page=PageNo4617&flag=1
Q94
World Investment Report is released by
A World Bank
B International Monetary Fund
C UN conference on trade and development (UNCTAD)
D World Economic Forum
Ans C
https://unctad.org/webflyer/world-investment-report-2021
Q95
1. Effective exchange rates (EERs) is a summary indicator of movements of the home currency against a basket of
currencies of trading partners.
2. Reserve Bank releases indices of Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate
(REER) of the Indian rupee for 6 and 40-Currency Basket.
3. EERs reflect the India’s external competitiveness.

4. REER is computed based on Wholesale Price Index
A 1, 2 and 3
B 1 and 2
C 3 and 4
D 1, 2, 3 and 4
Ans A
https://rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=20979
https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=20020
Q96
Consider the following statements wrt Appellate Body of WTO:
1 It is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought by WTO
Members.
2 The Appellate Body has its seat in Geneva, Switzerland.
3 Currently, the Appellate Body is unable to review appeals as term of all sitting members expired and no new
appoinments made.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans D
https://www.wto.org/english/tratop_e/dispu_e/appellate_body_e.htm
Q97
1 India is the largest importer of vegetable oils in the world.
2 Around 60% of the edible oils consumed in the country is met through imports.
3 Palm oils import constitutes around 60% of the total edible oil imported.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans D
https://www.thehindubusinessline.com/data-stories/edible-oil-production-not-in-sync-with-growth-in-
consumption/article65230626.ece
Q98
Which of the following penalises companies for indulging into bid rigging and cartelization:
A Competition Commission of India
B Ministry of Corporate affairs
C Serious fraud investigation office
D RBI
Ans A
Q99
1 The Agricultural and Processed Food Products Export Development Authority (APEDA) was established by the
Government of India under the Agricultural and Processed Food Products Export Development Authority Act, 1985.
2 The APEDA replaced the Processed Food Export Promotion Council (PFEPC).
3 APEDA works under the Ministry of Agriculture & Farmers Welfare.
A 1 and 2
B 1 only
C 2 and 3
D 1, 2 and 3
Ans A
https://apeda.gov.in/apedawebsite/about_apeda/About_apeda.htm
Q100
1 National Credit Guarantee Trustee Company Ltd (NCGTC) was established by the Department of Financial Services,
Ministry of Finance, as a wholly owned company of the Government of India.
2 NCGTC act as a common trustee company for multiple credit guarantee funds.
3 Credit guarantee programmes are designed to share the lending risk of the lenders and in turn, facilitate access to
finance for the prospective borrowers.
4 Under Emergency Credit Line Guarantee Scheme for Businesses, including MSMEs, 100% guarantee is provided by
NCGTC to Member Lending Institutions.
A 1, 2 and 3
B 1 and 2
C 3 and 4
D 1, 2, 3 and 4
Ans D
https://ncgtc.in/en/about-us/organization
https://www.eclgs.com/
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Prelims 2022 Economy Test Paper-1 (Solutions)

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Which of the above can be included in Expenditure Components of GDP ?

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Source: RBI Annual report 2020-21 page no 95

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

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Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

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Which of the statements given above is/are correct ?

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Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Source: RBI Annual report 2020-21 page no 1

Select the correct answer using the code given below.

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

Select the correct answer using the code given below.

Jobs will be created when spending/consumption increases in Economy or export increases.

Select the correct answer using the code given below.

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?

Select the correct answer using the code given below.

3. EERs reflect the India’s external competitiveness.

Which of the statements given above is/are correct ?

Which of the statements given above is/are correct ?