DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE TOLD TO DO SO

VAJIRAM & RAVI

PowerUp Prelims Test Series – 2025
GS Test – 03 – Economics (V4413)
TEST BOOKLET
Time Allowed: Two Hours Maximum Marks: 200

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will select the response which you want to mark on the Answer Sheet. In case you feel that there is more
than one correct response, mark the response which you consider the best. In any case, choose ONLY
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DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE TOLD TO DO SO

 VAJIRAM & RAVI
1. Consider the following statements regarding the 4. Which of the following are the most likely effects
Gross National Income (GNI): if the savings rate in an economy is very high?
1. It is the total income earned by a nation's 1. It may lead to higher investments in the
citizens or businesses, within and outside the economy.
nation's border. 2. It would reduce economic inequality.

2. It is derived by subtracting the income earned 3. It neutralizes the effects of inflation on the
purchasing power of a currency.
by foreigners from the Gross Domestic
Select the correct answer using the code given
Product (GDP).
below:
3. It is always lower than the GDP of a nation.
(a) 1 only
4. It does not include subsidies on production
(b) 3 only
granted by the government to enterprises.
(c) 1 and 3 only
Which of the statements given above are correct?
(d) 1, 2 and 3
(a) 1 and 3 only
(b) 2, 3 and 4 only 5. Which one of the following statements is correct
(c) 1, 2 and 4 only regarding public goods and private goods?
(d) 1, 3 and 4 only (a) Both are non-excludable.
(b) Unlike public goods, the purchasing power
2. A high Incremental Capital Output Ratio (ICOR) of a person determines her access to private
of an enterprise indicates that: goods.
(a) production is highly inefficient (c) Unlike public goods, private goods face a
(b) production is highly efficient free rider problem.
(c) capital investment is optimum (d) Both are generally non-rivalrous in nature.
(d) saturation limit of production
6. Which of the following are included under high

3. Consider the following: powered money?

1. Currency notes and coins held by public
1. Automobiles used by a delivery company
2. Bank reserves held by the Reserve Bank of
2. Machines and technology used to produce
India (RBI)
goods
3. Savings deposits with post office savings
3. Broadband lines
banks
4. Softwares
4. Deposits kept by the Government of India
5. Data centres
with RBI
How many of the above can be capital goods?
Select the correct answer using the code given
(a) Only two below:
(b) Only three (a) 1 and 2 only
(c) Only four (b) 2 and 3 only
(d) All five (c) 1, 2 and 4 only
(d) 1 and 4 only

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 VAJIRAM & RAVI
7. Consider the following pairs: 10. With reference to Regional Rural Banks (RRBs),
consider the following statements:
Inflation Characteristic
Type 1. Their area of operation is restricted to rural
1. Stagflation Slow growth and a high regions only.
unemployment rate
2. Skewflation Economic contraction in two
2. They are supervised by the National Bank
consecutive quarters for Agriculture and Rural Development
3. Reflation Simultaneous occurrence of (NABARD).
inflation and deflation
3. They are jointly owned by the Government
of India (GOI), the Sponsor Bank and the
How many of the pairs given above are correctly
concerned State Government.
matched?
Which of the statements given above are correct?
(a) Only one pair
(a) 1 and 2 only
(b) Only two pairs
(b) 2 and 3 only
(c) All three pairs
(c) 1 and 3 only
(d) None (d) 1, 2 and 3

8. Which one of the following best describes the 11. Consider the following:
‘greenshoe option’? 1. Capital grants
(a) Right to purchase additional shares at a 2. Credit guarantees
discount 3. Tax reliefs
(b) Provision to sell more shares than originally 4. Direct Benefit Transfers (DBT)
planned in an Initial Public Offering (IPO) How many of the above are categorized as
(c) Requirement to buy back shares from the ‘‘above-the-Line’’ fiscal measures in India?
market (a) Only one
(d) Right to buy and sell the same security on (b) Only two
different stock exchanges (c) Only three
(d) All four

9. Which of the following come under the “Net

12. Which one of the following best describes the
Factor Income from Abroad”?
meaning of Scheduled Commercial Banks
1. Net compensation of employees
(SCBs) in India?
2. Rent from a property
(a) A commercial bank which has been
3. Profit from entrepreneurship
included in the Second Schedule of the RBI
4. Interest and dividend from investments Act, 1934.
Select the correct answer using the code given (b) A Public Sector Bank (PSB) that is eligible
below: for loans from the RBI at zero-interest rate.
(a) 1, 2 and 3 only (c) A commercial bank that need not maintain
(b) 2, 3 and 4 only Cash reserve ratio (CRR) with the RBI.
(c) 1 and 4 only (d) A commercial bank that has paid-up capital
(d) 1, 2, 3 and 4 and raised funds more than or equal to Rs.
5 lakhs.

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 VAJIRAM & RAVI
13. Consider the following statements: 16. Consider the following pairs with reference to
Statement-I: types of markets and their examples:
In India, subsidies given to farmers is a type of
transfer payment. Market Structure Example in India
Statement-II:
1. Monopoly Railways
There is no exchange of goods or services when
subsidies are given to farmers 2. Oligopoly Telecommunications
Which one of the following is correct in respect of
3. Monopolistic Hotels
the above statements? Competition
(a) Both Statement-I and Statement-II are correct 4. Perfect Agricultural mandis/
and Statement-II explains Statement-I Competition markets
(b) Both Statement-I and Statement-II are
correct, but Statement-II does not explain How many of the pairs given above are correctly
Statement-I matched?
(c) Statement-I is correct, but Statement-II is (a) Only one pair
incorrect
(b) Only two pairs
(d) Statement-I is incorrect, but Statement-II is
(c) Only three pairs
correct
(d) All four pairs
14. With reference to employment elasticity in India,
consider the following statements: 17. Consider the following statements:
1. It reflects the percentage change in Statement-I:
employment rate with a unit change in
Post-liberalisation, the share of formal jobs in
economic growth.
2. Higher level of employment elasticity is an India has remained higher than informal jobs.
indicator of more labour-intensive growth. Statement-II:
3. It has consistently increased in the last two The share of the services sector in India’s Gross
decades. Domestic Product (GDP) is higher than the
How many of the statements given above are
agriculture sector.
correct?
Which one of the following is correct in respect of
(a) Only one
(b) Only two the above statements?
(c) All three (a) Both Statement-I and Statement-II are correct
(d) None and Statement-II explains Statement-I
(b) Both Statement-I and Statement-II are
15. Which one of the following statements is correct?
correct, but Statement-II does not explain
(a) Food and fuel items are included to measure
core inflation. Statement-I
(b) Headline inflation includes all commodities, (c) Statement-I is correct, but Statement-II is
services, and goods. incorrect
(c) Core inflation is more volatile than headline (d) Statement-I is incorrect, but Statement-II is
inflation.
correct
(d) Headline inflation is not relevant for
developing economies.
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 VAJIRAM & RAVI
18. Consider the following statements: 21. With reference to the Urban Cooperative
1. Exchange Traded Funds (ETFs) are usually Banks (UCBs) in India, consider the following
more liquid than the mutual funds.
2. ETFs in India are regulated by the Reserve statements:
Bank of India while mutual funds are 1. They are required to maintain a stipulated
regulated by SEBI. level of Statutory Liquidity Ratio (SLR).
3. ETFs have lower expense ratios compared to
mutual funds. 2. They come under the Supervisory Action
Which of the statements given above are correct? Framework (SAF) of the Reserve Bank of
(a) 1 and 2 only
India (RBI).
(b) 1 and 3 only
(c) 2 and 3 only 3. Some of the UCBs are authorised to deal in
(d) 1, 2 and 3 foreign exchange.
Which of the statements given above are correct?
19. Consider the following statements with reference
to the Reserve Bank of India (RBI): (a) 1 and 2 only
1. Its primary mandate includes earning profits (b) 2 and 3 only
like that of commercial banks.
(c) 1 and 3 only
2. Open market operations are a major source of
income for the RBI. (d) 1, 2 and 3
3. It maintains a Contingent Risk Buffer
amounting to 20 percent of its balance sheet.
22. Consider the following pairs:
How many of the statements given above are
correct? Monetary Policy Meaning
(a) Only one
1. Hawkish Hike in interest rates to
(b) Only two curb money supply
(c) All three 2. Accommodative Expansion of money
(d) None supply to boost
economic growth
3. Calibrated Overall policy stance is
20. Consider the following statements with reference tightening tilted towards a rate cut
to Deposit Insurance and Credit Guarantee 4. Neutral Priority is equal to both
Corporation (DICGC) of India: inflation and growth
1. It does not insure deposits made in foreign How many of the pairs given above are correctly
banks functioning in India.
matched?
2. It does not insure deposits of Central and
State Governments. (a) Only one pair
3. Deposit insurance premium is borne entirely (b) Only two pairs
by the Reserve Bank of India.
(c) Only three pairs
4. Deposits of the same person but in different
banks are separately insured. (d) All four pairs
Which of the statements given above are correct?
(a) 1, 2 and 3 only
(b) 2 and 4 only
(c) 2, 3 and 4 only
(d) 1, 3 and 4 only

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 VAJIRAM & RAVI
23. Consider the following pairs: 26. Which of the following are most likely implications
Type Description if the US Federal Reserve reduces interest rates?
1. Higher foreign investment in Indian markets
1. Effective Revenue deficit minus 2. Higher import bill for India
Revenue Deficit grants for capital assets
3. Lower income for Indian exporters
2. Primary Deficit Indicates the government’s
borrowing from outside the 4. Cheaper loan for foreign education for
country Indians
3. Monetized Financed through Select the correct answer using the code given
Deficit borrowings from the
central bank below:
4. Fiscal Deficit Total expenditure minus (a) 1, 2 and 3 only
total receipts excluding (b) 1 and 4 only
borrowings
(c) 2 and 3 only
How many of the pairs given above are correctly (d) 2, 3 and 4 only
matched?
(a) Only one pair 27. Consider the following statements:
(b) Only two pairs Statement-I:
(c) Only three pairs Developed countries tend to exhibit lower tax-to-
GDP ratios compared to developing countries.
(d) All four pairs
Statement-II:
Developed countries can finance its expenditure
24. Which one of the following is a wholly owned
from its revenue rather than relying on borrowings.
subsidiary of the Reserve Bank of India (RBI)? Which one of the following is correct in respect of
(a) Small Industries Development Bank of India the above statements?
(SIDBI) (a) Both Statement-I and Statement-II are correct
(b) National Bank for Agriculture and Rural and Statement-II explains Statement-I
Development (NABARD) (b) Both Statement-I and Statement-II are
(c) National Bank for Financing Infrastructure correct, but Statement-II does not explain
and Development (NaBFID) Statement-I
(d) Indian Financial Technology & Allied (c) Statement-I is correct, but Statement-II is
Services (IFTAS) incorrect
(d) Statement-I is incorrect, but Statement-II is
correct
25. Which of the following are most likely
consequences of a ‘‘Dear Money” policy by the
28. Consider the following items:
Reserve Bank of India (RBI)? 1. Food
1. It will decrease the savings rate. 2. Fuel and power
2. It will encourage private investment. 3. Minerals
3. It will increase bond yields. 4. Education
4. It will discourage exporters. How many of the above are included for the
Select the correct answer using the code given calculation of both Consumer Price Index (CPI)
below: and Wholesale Price Index (WPI) in India?
(a) 1 and 2 only (a) Only one
(b) 3 and 4 only (b) Only two
(c) Only three
(c) 1 and 3 only
(d) All four
(d) 2 and 4 only

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 VAJIRAM & RAVI
29. Which of the following is/are most likely to lead 32. Consider the following pairs:
to demand-pull Inflation? Term Description
1. The RBI prints money during times of severe
1. Tax buoyancy Responsiveness of tax
economic stress revenue growth to changes
2. Provision of tax breaks for certain products in in Gross Domestic Product
(GDP)
the Union Budget
2. Tax elasticity Changes in tax revenue in
3. The economy is booming and unemployment response to changes in tax
rate
is low
3. Tax Expenditure incurred on
Select the correct answer using the code given expenditure collection of taxes
below: How many of the pairs given above are correctly
(a) 1 only matched?
(b) 2 and 3 only (a) Only one pair
(c) 3 only (b) Only two pairs
(d) 1, 2 and 3 (c) All three pairs
(d) None
30. Which one of the following statements best
describes the practice of “drip pricing”?
33. Consider the following statements:
(a) As a customer proceeds to purchase a product,
The Indian Depositary Receipts (IDRs):
the original price is decreased by applying
1. enable the foreign companies to raise funds
discount coupons
from the Indian securities markets
(b) After purchasing a product, the customer is
2. are required to be listed in at least one stock
given a cash back to attract them purchase
exchange in India
from the same platform again
3. are denominated in Indian Rupees
(c) Pricing used by online retail sellers to clear
How many of the statements given above are
out their old commodities stock at discounted
correct?
price
(a) Only one
(d) Initially only part of a good's price is
(b) Only two
advertised, with the total bigger amount
(c) All three
revealed at the end of the buying process
(d) None
31. Consider the following:
1. It accounts for income inequality within the 34. Capital gains tax is applied in which of the
country. following cases?
2. It accounts for non-marketed activities. 1. Property received by inheritance
3. It accounts for externalities caused by 2. Sale of rural agricultural land
economic activities. 3. Profits earned on sale of shares
How many of the above represent the reasons 4. Transfer of a copyright
for using Gross Domestic Product (GDP) as an Select the correct answer using the code given
indicator of well-being of the people of a nation? below:
(a) Only one (a) 1 and 2 only
(b) Only two (b) 3 and 4 only
(c) All three (c) 1 and 3 only
(d) None (d) 1, 3 and 4 only

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 VAJIRAM & RAVI
35. Consider the following statements: 38.  Consider the following pairs regarding the various
1. Net Domestic Product (NDP) is generally types of taxation:
used to compare economies of the world.
Taxation Feature
2. NDP accounts for capital that has been
consumed over the year in the form of 1. Progressive Tax rate increases as
taxable income increases
housing, vehicle, or machinery deterioration.
2. Regressive Tax burden decreases as
3. Net National Product (NNP) is always greater income rises
than the Gross National Product (GNP). 3. Proportional Same tax rate for all
Which of the statements given above is/are regardless of income

correct? Which of the pairs given above is/are correctly

(a) 1 only matched?
(b) 2 only (a) 1 and 2 only
(c) 1 and 3 only (b) 2 and 3 only
(d) 2 and 3 only (c) 3 only
(d) 1, 2 and 3
36. Which one of the following is most likely to occur
when there is an increase in the money supply in 39. With reference to SENSEX in India, consider the
an economy? following statements:
(a) Industries are likely to reduce their level of 1. It tracks the performance of the 30 largest
production companies listed on Bombay Stock Exchange
(BSE).
(b) The high-powered money would witness a
2. It is calculated in terms of both Indian rupees
decline
and U.S. dollars.
(c) The demand for labour in the economy will
3. Its composition is re-evaluated once in every
reduce  
three years as per the performance of stocks
(d) Interest rates in the economy are likely to
of the companies.
decline
Which of the statements given above are correct?
(a) 1 and 2 only
37. Consider the following statements with regard to
(b) 2 and 3 only
the Treasury Bills (T-bills):
(c) 1 and 3 only
1. These can be issued both by the Central
(d) 1, 2 and 3
Government and the State Governments.
2. Retail investors can buy T-bills through RBI’s
40. Consider the following:
Retail Direct Platform.
1. Interest receipts
3. These can be issued for maturity periods of 1
2. Disinvestment proceeds
year to 3 years only.
3. T-bill borrowings
4. These are zero coupon securities and do not
4. Goods and Services Tax (GST)
pay any interest.
How many of the above are included under
How many of the statements given above are revenue receipts of the Government of India?
correct? (a) Only one
(a) Only one (b) Only two
(b) Only two (c) Only three
(c) Only three (d) All four
(d) All four

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 VAJIRAM & RAVI
41. Which one of the following can be considered as 45. Consider the following statements regarding
the best mode of financing the fiscal deficit? methods used to measure unemployment in India:
(a) Borrowing from external sources
1. Under Usual Status Approach, unemployment
(b) Raising tax rates
(c) Borrowing from the Reserve Bank of India is recorded for a person if he/she has no
(RBI) gainful work for a majority of time in the
(d) Issuing government securities in the domestic preceding year.
market 2. Weekly Status Approach records
unemployment for those who did not have
42. Which one of the following situations makes a
product eligible for the 'countervailing duty'? gainful work even for an hour or a day in the
(a) The product fails to meet the quality standards preceding week.
of the importing country Which of the statements given above is/are
(b) The product violates intellectual property
correct?
rights of the importing country
(c) The product is produced using (a) 1 only
environmentally harmful processes (b) 2 only
(d) The product receives a government subsidy (c) Both 1 and 2
in the exporting country (d) Neither 1 nor 2

43. Consider the following statements regarding

External Commercial Borrowings (ECBs) in 46. If the inflation in India is much higher than in the
India: United States of America (USA), then there will
1. Individuals are not allowed to raise ECBs. be:
2. These cannot be raised for funding real estate
(a) fall in investor confidence in the US economy
activities in India.
3. Existing ECBs cannot be refinanced by (b) depreciation of the Indian Rupee (INR)
raising fresh ECBs. against the US Dollar (USD)
How many of the statements given above are (c) decreased costs for imports from the USA in
correct?
India
(a) Only one
(b) Only two (d) lower interest rates in the Indian market
(c) All three
(d) None 47. 'Primary Dealers' in the Indian financial market
are permitted to deal in which of the following?
44. Consider the following pairs:
1. Dealing and underwriting in government
Curve Represents a relation between securities
1. Lorenz Tax rate and tax revenue
Curve collected 2. Investing in Commercial Papers (CPs)
2. Kuznets Economic growth and economic 3. Investing in Certificates of Deposit (CDs)
Curve inequality
4. Investing in both debt and equity derivatives
3. Phillips Inflation and unemployment
Curve Select the correct answer using the code given
How many of the pairs given above are correctly below:
matched? (a) 1, 2 and 3 only
(a) Only one pair (b) 2 and 4 only
(b) Only two pairs
(c) All three pairs (c) 1, 3 and 4 only
(d) None (d) 1, 2, 3 and 4

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 VAJIRAM & RAVI
48. Which of the following are most likely to occur 51. Which one of the following best describes the
during a recession in an economy? process of “sterilisation” by the RBI?
1. Increase in the prices of gold (a) It is the practice of dear monetary policy
2. Rise in interest rates by the RBI in case of fiscal prudence by the
3. Higher unemployment Government of India.
4. Higher yields in long-term capital market (b) It is the practice of absorbing excess money
instruments in case of a liquidity trap in the market.
(c) It is the practice of outright sale or buying of
Select the correct answer using the code given
Government security to counter the monetary
below:
impact of foreign inflows or outflows.
(a) 1, 2 and 3 only
(d) It is the practice of expansionary monetary
(b) 1, 3 and 4 only
policy to increase the domestic demand in
(c) 1 and 3 only
case of recession.
(d) 2 and 4 only
52. The Reserve Bank of India (RBI) has launched
49. With reference to the ‘Pradhan Mantri the “PRAVAAH” portal to:
Vishwakarma Scheme,’ consider the following (a) regulate government securities transactions
statements: (b) track inter-bank money transfers
1. It aims to provide support to artisans and (c) facilitate regulatory approvals from the RBI
craftspeople of rural and urban areas across (d) promote seamless access to forex market
India.
2. It provides credit support to the beneficiaries 53. Consider the following:
with a concessional interest rate. 1. Foreign currency reserve
3. Cooperative banks are not eligible to lend 2. Currency notes held by public
under the scheme. 3. Loans and advances to the Central
Which of the statements given above are correct? Government
4. Deposits of the State Government
(a) 1 and 2 only
5. Rupee denominated securities
(b) 2 and 3 only
How many of the above are considered assets of
(c) 1 and 3 only
the Reserve Bank of India (RBI)?
(d) 1, 2 and 3
(a) Only two
(b) Only three
50. An investor thinks that a company is overvalued (c) Only four
at $200 per share and that its price is due to go (d) All five
down. The investor borrows 10 shares of the
company from a broker and then sells the shares 54. Which one of the following best describes the
for the market price of $200. Later, the investor difference between cess and surcharge?
buys back the 10 shares at $125 after the stock (a) Unlike proceeds from the cess, revenue
price has gone down and returns the borrowed collected from surcharge is shared with
shares to the broker. The investor would earn a States.
net profit without investing a single dollar. (b) Cess is mentioned in the Constitution of India
Which market practice is best described above? whereas surcharge is not.
(a) Chargeback (c) Cess is a type of direct tax whereas surcharge
(b) Overstating revenue is an indirect tax.
(c) Short-selling (d) Unlike surcharge, cess is usually levied for a
(d) Embezzlement specific purpose.

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 VAJIRAM & RAVI
55. Consider the following pairs: 58. With reference to Standing Deposit Facility
(SDF) and Marginal Standing Facility (MSF) of
Tax Example the Reserve Bank of India, consider the following
1. Tobin tax Sales tax
statements:
2. Ad valorem tax Import duty 1. The purpose of SDF is to reduce the excess
3. Pigouvian tax Carbon emissions Tax liquidity whereas the purpose of MSF is
to allow banks to borrow from RBI in
Which of the pairs given above is/are correctly emergency.
2. SDF is availed against the collateral of
matched?
government securities whereas MSF is
(a) 1 only collateral free facility.
(b) 2 and 3 only 3. SDF rate is typically lower than repo rate
(c) 3 only whereas MSF rate is generally higher than
(d) 1, 2 and 3 repo rate.
Which of the statements given above are correct?
(a) 1 and 2 only
56. Consider the following statements: (b) 2 and 3 only
The ‘bond yield’ is likely to decrease if there is a: (c) 1 and 3 only
1. increase in market interest rates (d) 1, 2 and 3
2. increase in fiscal deficit
59. Consider the following taxes:
3. increase in foreign direct investments
1. Inheritance tax
4. increase in Inflation 2. Dividend distribution tax
Which of the statements given above is/are 3. Gift tax
correct? 4. Wealth tax
(a) 3 only 5. Estate duty
How many of the above are currently not levied
(b) 1 and 3 only
in India?
(c) 2, 3 and 4 only (a) Only two
(d) 1, 2 and 4 only (b) Only three
(c) Only four
57. Consider the following statements: (d) All five
The money multiplier may increase if there is:
60. Arrange the following sources of income of the
1. an increase in repo rate Government of India in FY 2023-24 based on
2. a decrease in bank rate their share in increasing order:
3. an increase in Cash Reserve Ratio (CRR) 1. Goods and Services Tax
4. a decrease in Statutory Liquidity Ratio (SLR) 2. Corporate Tax
3. Income Tax
Select the correct answer using the code given
4. Excise Duty
below: 5. Customs Duty
(a) 1, 2 and 3 only Select the correct answer using the code given
(b) 2 and 4 only below:
(c) 1 and 3 only (a) 4-5-2-1-3
(b) 5-4-2-1-3
(d) 2, 3 and 4 only
(c) 4-5-3-2-1
(d) 5-4-3-2-1
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 VAJIRAM & RAVI
61. The instrument is issued by the Government of 65. Consider the following pairs:
India to meet the temporary mismatches in the Type of Description
government's cash flows and bridge the short- Shares
term liquidity needs. It is: 1. Sweat share Given to existing shareholders
without any charge
(a) Commercial Bill
2. Scrip share Given to company employees
(b) Commercial Paper without any charge
(c) Certificate of Deposit 3. Preference Dividends are paid to
(d) Cash Management Bill share shareholders prior to the
issuance of common stock
dividends
62. Which one of the following statements is correct? 4. Right Issued to existing
(a) A Nidhi company is regulated by the Ministry shares shareholders at a discounted
price
of Finance whereas a Chit fund is regulated
How many of the pairs given above are correctly
by the Ministry of Corporate Affairs.
matched?
(b) A Nidhi company can distribute its fund to
(a) Only one pair
any person whether a member or not but a
(b) Only two pairs
Chit fund can distribute funds only to its
members. (c) Only three pairs
(c) Unlike Nidhi company, in a Chit fund, every (d) All four pairs
member must get the fund by turns with a
liability to pay future subscriptions. 66. Which of the following factors increase the
(d) Both Nidhi companies and Chit funds are demand of a commodity in the market?
regulated under the Companies Act, 2013. 1. Increase in the income of the consumer
2. Increase in the prices of substitute goods
63. Which of the following are most likely benefits of 3. A large number of consumers of the
a moderate level of inflation? commodity in the market
1. It enables adjustment of relative wages. 4. Endorsement of the product
2. It can lead to lower current account deficit. Select the correct answer using the code given
3. It can help people to anticipate the future below:
price levels. (a) 1 and 3 only
4. It can stimulate economic growth. (b) 2, 3 and 4 only
Select the correct answer using the code given (c) 1, 2 and 4 only
below: (d) 1, 2, 3 and 4
(a) 1 and 2 only
(b) 3 and 4 only
67. Which of the following may indicate the situation
(c) 1, 2 and 3 only
of a liquidity trap in an economy?
(d) 1, 2, 3 and 4
1. Low interest rates
2. High personal savings rate
64. Which one of the following statements is correct
3. Decrease in general level of prices
regarding the RBI’s ‘margin requirements’?
Select the correct answer using the code given
(a) It is a quantitative tool for credit control.
(b) It is the minimum share of a bank's total below:
deposits to be kept by the bank in liquid cash. (a) 1 and 2 only
(c) It is usually increased to control inflation in (b) 2 and 3 only
an economy. (c) 1 and 3 only
(d) It is determined solely by individual banks. (d) 1, 2 and 3

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68. Consider the following statements regarding the 71. With reference to the ‘Property tax’ in India,
trend of employment in India in the last five years: consider the following statements:
1. The female Labour Force Participation Rate 1. It is assessed and collected by the municipal
(LFPR) has continuously increased. authorities.
2. The LFPR has increased more in the rural 2. It comprises water tax and drainage tax.
sector compared to the urban sector. 3. Its collection amounts to more than 5 percent
3. The Worker Population Ratio (WPR) of males of the GDP.
has increased more than that of females. Which of the statements given above are correct?
4. The Unemployment Rate (UR) of females in (a) 1 and 2 only
(b) 2 and 3 only
the rural sector was higher compared to the
(c) 1 and 3 only
urban sector.
(d) 1, 2 and 3
Which of the statements given above is/are
correct?
72. According to the Reserve Bank of India’s (RBI)
(a) 1 only recent report, the fiscal position of Indian States is
(b) 1 and 4 only presently characterised by:
(c) 2 and 3 only (a) Increasing gross fiscal deficit and rising
(d) 1, 3 and 4 only revenue deficit
(b) Decreasing gross fiscal deficit but increasing
69. The ‘price elasticity of demand’ is usually high outstanding liabilities
for which of the following? (c) Contained gross fiscal deficit and reduction
1. Electricity in revenue deficit
2. Airline tickets (d) Elimination of revenue deficit but increasing
3. Rice gross fiscal deficit
4. Luxury cars
5. Over The Top (OTT) services 73. Which one of the following statements is correct?
Select the correct answer using the code given (a) Commercial Papers are secured, while
below: Commercial Bills are unsecured promissory
(a) 2, 4 and 5 only note.
(b) 1, 3 and 4 only (b) Commercial Papers are issued by companies,
(c) 1, 2, 3, and 5 only while Commercial Bills are drawn by sellers.
(c) Both Commercial Papers and Commercial
(d) 1, 2, 4 and 5 only
Bills are long-term money market instruments.
(d) Both Commercial Papers and Commercial
70. Consider the following statements:
Bills are suitable for financing fixed assets.
1. Zero-based budget considers the previous
year as the base year to calculate budgetary 74. Consider the following statements:
allocations and estimates. 1. Deflation is a sustained decrease in the
2. Gender budget involves gender-sensitive general price level, resulting in negative
formulation of legislation, policies, programs inflation rates.
and schemes. 2. Disinflation signifies rise in prices but at a
3. Outcome budget links the outlay of funds slower pace compared to previous periods.
of various government ministries with their 3. Both deflation and disinflation may lead to
expected outcomes. reduced demand and lower economic growth.
Which of the statements given above is/are Which of the statements given above are correct?
correct? (a) 1 and 2 only
(a) 1 and 2 only (b) 2 and 3 only
(b) 3 only (c) 1 and 3 only
(c) 2 and 3 only (d) 1, 2 and 3
(d) 1, 2 and 3

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75. Consider the following: 78. Consider the following:
1. Aircraft operated by residents of a country 1. Foreign Banks in India
2. Companies owned by nationals in foreign 2. Regional Rural Banks (RRBs)
countries 3. Small Finance Banks
3. Oil and natural gas platforms operated by a 4. Payment Banks
country in international waters
5. Urban Cooperative Banks
4. Embassies, consulates and military bases of a
How many of the above are required to lend
country located abroad
How many of the above are included for the under Priority Sector Lending (PSL) norms of the
calculation of a nation’s Gross Domestic Product Reserve Bank of India?
(GDP)? (a) Only two
(a) Only one (b) Only three
(b) Only two (c) Only four
(c) Only three (d) All five
(d) All four
79. With reference to the National Statistical Office
76. Consider the following pairs:
(NSO), consider the following statements:
Type of Goods Characteristics 1. It was established in 2005 based on the
recommendations of the Rangarajan
1. Inferior goods An increase in income
leads to a decrease in Commission.
demand 2. It is an autonomous body under the Ministry
2. Luxury goods An increase in the price
leads to an increase in of Commerce and Industry.
demand 3. It is responsible for implementing and
3. Giffen goods An increase in income maintaining statistical standards in India.
leads to a proportionally
larger increase in demand Which of the statements given above is/are
correct?
Which of the pairs given above is/are correctly
(a) 1 only
matched?
(b) 2 and 3 only
(a) 1 only
(b) 2 only (c) 3 only
(c) 1 and 3 only (d) 1, 2 and 3
(d) 2 and 3 only
80. This type of inflation can occur in circumstances
77. With reference to inflation targeting in India, affecting the underlying production economy.
consider the following statements: To keep from paying more for goods tomorrow,
1. The Reserve Bank of India (RBI) is tasked people begin hoarding today. It benefits those
with maintaining inflation at 4%. who took out loans and those who are involved
2. The Central Government sets the inflation
in export business. It is a rare event for developed
target every five years in consultation with
economies and occurs mostly in least developed
the RBI.
and developing economies.
3. The RBI must provide explanation if it fails
to meet the inflation targets. Which one of the following market situations is
Which of the statements given above are correct? best described above?
(a) 1 and 2 only (a) Hyperinflation
(b) 2 and 3 only (b) Deflation
(c) 1 and 3 only (c) Creeping inflation
(d) 1, 2 and 3 (d) Stagflation

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81. Which of the following would most likely lead to 84. Which one of the following statements is correct
inflation in the Indian economy? regarding the Marginal Cost of Funds based
1. Depreciation of rupee Lending Rate (MCLR)?
2. Increase in exports (a) It is the interest rate above which a bank
3. Increase in fiscal deficit cannot lend.
4. Decrease in disposable income (b) It is not influenced by the bank’s operating
Select the correct answer using the code given costs or deposit rates.
below: (c) It is calculated internally by the banks based
(a) 1, 2 and 3 only on the tenure of the loan.
(b) 2, 3 and 4 only (d) It is reviewed and published by banks once a
(c) 1, 3 and 4 only year.
(d) 1, 2 and 4 only
85. Central banks around the world are accumulating
82. Which of the following actions can be taken by a gold in large quantities for which of the following
government/central bank to tackle inflation in an reasons?
economy? 1. To diversify reserves and reduce dependency
1. Increase the repo rate on the US dollar
2. Higher tax rates 2. To hedge against economic and geopolitical
3. Increase public expenditure risks
4. Reduce the import duty 3. To safeguard against potential currency
Select the correct answer using the code given devaluations and financial instability
below: Select the correct answer using the code given
(a) 1, 2 and 3 only below:
(b) 2, 3 and 4 only (a) 1 and 2 only
(c) 1, 3 and 4 only (b) 2 and 3 only
(d) 1, 2 and 4 only (c) 1 and 3 only
(d) 1, 2 and 3
83. Consider the following statements regarding
the Index of Industrial Production (IIP) and the 86. With reference to the capital expenditure of the
Purchasing Managers Index (PMI): Government of India, consider the following
1. IIP measures actual production output, while statements:
PMI assesses activity at the purchasing stage. 1. It includes the expenditure incurred on
2. Unlike PMI, IIP accounts for both acquiring fixed assets like land.
manufacturing and service sectors. 2. It currently stands at around 10% as a
3. IIP is calculated by S&P Global, while percentage of GDP.
PMI is calculated by the Central Statistical 3. It has consistently increased in the past five
Organisation (CSO). years.
Which of the statements given above is/are Select the correct answer using the code given
correct? below:
(a) 1 only (a) 1 and 2 only
(b) 2 and 3 only (b) 2 and 3 only
(c) 1 and 3 only (c) 1 and 3 only
(d) 1, 2 and 3 (d) 1, 2 and 3

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87. Consider the following statements with reference 89. With reference to India's external debt, consider
to Prompt Corrective Action (PCA) framework of the following statements:
1. India's external debt to GDP ratio presently
the RBI: stands at around 5%.
1. It is initiated when a bank’s Capital Adequacy 2. India's external debt has consistently
Ratio (CAR) goes above 10%. increased in the past five years.
3. Most of India's external debt is denominated
2. It expects all banks to keep the net Non-
in Indian rupee.
Performing Assets (NPAs) at below 3%. 4. Loans comprise the largest component of
3. The RBI has decided to extend the PCA India's external debt.
How many of the statements given above are
framework for NBFCs to government owned
correct?
NBFCs from 2024. (a) Only one
4. The RBI can liquidate a Public Sector (b) Only two
(c) Only three
Bank under the PCA framework, without
(d) All four
Government’s approval.
How many of the statements given above are 90. Consider the following statements:
1. Production taxes are imposed on the factors of
correct?
production, while product taxes are imposed
(a) Only one on the final goods and services produced or
(b) Only two sold.
(c) Only three 2. Production taxes are levied based on the
quantity of goods produced, while product
(d) All four taxes are levied regardless of the quantity of
the goods produced.
88. With reference to the Medium Term Expenditure 3. Goods and Services Tax (GST) is a production
tax, while stamp duty is a product tax.
Framework (MTEF), consider the following
Which of the statements given above are correct?
statements: (a) 1 only
1. It is provided under the Fiscal Responsibility (b) 1 and 3 only
(c) 2 and 3 only
and Budget Management (FRBM) Act, 2003.
(d) 1, 2 and 3
2. It sets a three-year rolling target for the
expenditure indicators. 91. Which one of the following statements best
describes the “Net International Investment
3. It should contain detailed break-up of grants
Position”?
for creation of capital assets. (a) It refers to the sum total of a country’s
Which of the statements given above is/are investments in all other countries in a
particular year.
correct?
(b) It is the total value of the financial assets held
(a) 1 and 2 only abroad by the central bank of a country.
(b) 2 only (c) It is the balance sheet of a country’s external
(c) 1 and 3 only assets and liabilities.
(d) It is the total value of a country’s reserves
(d) 1, 2 and 3
held with the International Monetary Fund.

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92. Consider the following: 95. "A hedge fund manager in London wants to invest
1. Foreign exchange reserves in Indian stocks but is deterred by the complex
2. Total money supply registration process with SEBI. She discovers
a financial instrument that allows her to gain
3. National Income
exposure to Indian securities, receive dividends,
4. Import and export
and benefit from capital gains without direct
How many of the above are flow variables in an
registration". This is the most likely description
economy? of:
(a) Only one (a) Foreign Currency Exchangeable Bonds
(b) Only two (b) Participatory Notes
(c) Only three (c) Foreign Currency Convertible Bonds
(d) All four (d) External Commercial Borrowings

96. Consider the following pairs:

93. With reference to Additional Tier 1 (AT-1) Bonds,
consider the following statements: Type of Example
Unemployment
1. These bonds have no maturity date. 1. Frictional A person resigns from a
job in order to look for a
2. Their primary purpose is to secure short-term better opportunity
capital for the issuing banks. 2. Structural A person losing a job due
to lack of required skills
3. The investors do not get their principal
3. Cyclical A person loses a job in a
amount back. skiing resort in summer
months
4. The issuing banks can convert them into
equity at any time. How many of the pairs given above are correctly
matched?
Which of the statements given above are correct?
(a) Only one pair
(a) 1 and 4 only
(b) Only two pairs
(b) 2 and 3 only
(c) All three pairs
(c) 1, 3 and 4 only (d) None
(d) 1, 2, 3 and 4
97. In India, one can sell and buy Government
94. The theory suggests that the people tend to spend Securities (G-Secs) in secondary market through
more as the value of their assets increases. It which of the following?
believes that this happens because people feel 1. National Stock Exchange
2. Over-the-counter market
more financially secure and richer, despite their
3. RBI's Retail Direct platform
incomes and fixed costs remaining the same as
Select the correct answer using the code given
before. This is the most likely description of:
below:
(a) Wealth effect (a) 1 and 2 only
(b) Income effect (b) 2 and 3 only
(c) Fisher effect (c) 1 and 3 only
(d) Domino effect (d) 1, 2 and 3

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98. Consider the following: 100. Consider the following statements:

1. Adopt progressive tax regime Statement-I:

2. Increase the minimum wage During the period of inflation, a surplus budget is
advisable.
3. Encourage higher savings rates
Statement-II:
How many of the above steps can be taken by the
A surplus budget reduces the money supply and
government to reduce economic inequality?
aggregate demand in the market.
(a) Only one
Which one of the following is correct in respect of
(b) Only two
the above statements?
(c) All three (a) Both Statement-I and Statement-II are correct
(d) None and Statement-II explains Statement-I
(b) Both Statement-I and Statement-II are
99. Consider the following statements with reference correct, but Statement-II does not explain
to Corporate Debt Market Development Fund Statement-I

(CDMDF): (c) Statement-I is correct, but Statement-II is

incorrect
1. It aims to enhance secondary market liquidity
(d) Statement-I is incorrect, but Statement-II is
in the corporate bond market during stressed
correct
market situations.

2. It will provide liquidity support in the event of

a financial crisis.
3. The entire corpus fund will be contributed by

Asset Management Companies.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

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