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UPSC PRELIMS QUESTION PAPERS

1995-2005 PRELIMS ORIGINAL ECONOMICS QUESTION PAPER

1. Which one of the following Five year plans recognized human development as the core of all development efforts?
(a) The 3rd Five year plane 
(b) The 5th Five year plane
(c) The 6th Five year plane
(d) The 8th Five year plane
 
2. Which of the following are among the non-plan expenditures of the Government of India?
1. Defense expenditure
2. Subsides
3. All expenditures linked with the previous plan periods 
4. Interest payment
(a) 1 and 2  (b) 1 and 3  (c) 2 and 4  (d) 1,2,3 and 4 
 
3.  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 and 2  (b) 3 and 4  (c) 1, 2 and 3  (d) 1,2,3 and 4 
 
4. What is the annual rate aimed at in the eighth Five Year Plan
(a) 5.6%  (b) 6 %  (c) 6.5%   (d) 7%
 
5. Which one of the following is the largest mutual fund organization in India
(a) SBI Mutual fund 
(b) GIC Mutual Fund 
(c) Ind Bank Mutual Fund
(d) Unit Trust of India 
 
6. Corporation tax:
(a) is levied and appropriated by the states  
(b) is levied by the union and collected and appropriated by the States 
(c) is levied by the Union and shared by the union and the States 
(d) is levied by the Union and belongs to it exclusively
 
7. Which of the following constitute the World Bank?
1. International Bank for Reconstruction and Development t
2. International Finance Corporation
3. International Development association
4. International Monetary Fund
(a) 1,2 and 3 (b) 1 and 2  (c) 3 and 4  (d) 1,2,3 and 4 
 
8. Agricultural income tax is assigned to the State Government by
(a) Finance Commission  
(b) National Development Council  
(c) Inter-State Council 
(d) The Constitution of India
 
9. Which one of the following Is not a instrument of selective credit control in India?
(a) Regulation of consumer credit  
(b) Rationing of credit 
(c) Margin requirements 
(d) Variable coast reserve rations
 
10. The Dinesh Goswami Committee was concerned with:
(a) de-nationalization of banks 
(b)  electoral reforms
(c) steps to put down insurgency in the north-east  (d) the problem of the Chakmas
 
11. Which one of the following is true regarding the Jawahar Rozgar Yojana (JRY)?
(a) It was launched during the Prime Minister ship of India Gandhi 
(b) It aims at creating one million jobs annually
(c) The target group of JRY are the urban poor living below the poverty line  
(d) Under the scheme 30% of the employment generated is reserved for women 
 
12. Bank Rate implies the rate of interest
(a) paid by the Reserve Bank of Indian on the Deposits of Commercial Banks
(b) charged by Banks on loans and advances  
(c) payable on bonds 
(d) at which the Reserve Bank of India discounts the Bills of Exchange
 
13. The Narasimham Committee for financial sector Reforms has suggested reduction in 
(a) SLR and CRR 
(b) SLR and  CRR and Priority Sector Financing  
(c) SLR and Financing to capital goods sector
(d) CRR, Priority Sector Financing and Financing to capital goods sector
 
14. 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
(c)  ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture
(d) people are largely unaware of the significance of transition fro agriculture to industry for economic development
 
15. Which of the following benefits are likely to accrue to India from the World Trade Organization?
(a) 1,2 and 3 (b) 1 and 3  (c) 1 and 2  (d) 2 and 3
 
16. 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 (c) low capital/output ratio (d) high capital/output ratio 
 
17. The largest source of financing the public sector outlay of the Eighth Five Year Plan comes from 
(a) balance from current revenue  
(b) contribution of public enterprises
(c) government borrowings 
(d) deficit financing 
 
18. The New Exim Policy  announced in 1992, is for period of:
(a) 3 years  (b) 4 years  (c) 7 years  (d) 5 years
 
19. Consider the following 
1. Industrial Finance Corporation of India 
2. Industrial Credit and Investment Corporation of India 
3. Industrial Development Bank of India 
4. Unit Trust of India 
The correct sequence in which the above were established is:
(a)  1,2,3,4 (b)  1,3,2,4 (c) 4,3,2,1,  (d) 1,4,3,2
 
20.  As part of the liberalization programme  and with a view to attract foreign exchange, the government and the RBI have, devised two scheme know as FCNR ‘A’ and FCNR ‘B’ 
Which of the following is/are true regarding these two schemes?
1. under scheme ‘A’ RBI bears exchange rate fluctuations 
2. Under scheme ‘B’ other banks are to meet out the difference in exchange rate fluctuations
3. Both the schemes stand withdrawn now
4. Only scheme ‘A’ has been withdrawn
(a) 3 only   (b) 1 and 2  (c)1, 2 and 3  (d) 1,2 and 4 
 
21. Which one of the following is correct regarding stabilization and structural adjustment as two componenets 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 t 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 adjustment is to be set it motion by the State government 
 
22. Give below are two statements, one labeled as 
Assertion (a) and the other labeled as Reason (R)
Assertion (A): An important policy instrument of economic liberalization  is reduction in import duties on capital goods.
Reason(R): Reduction inimport duties would help the local entrepreneurs to improve technology to face the global markets
In the context of the above two statements, which one of the following is correct?
(a) Both A and R are correct explanation  
(b) Both A and R are true R is not a correct explanation  
(c) A is true but R is false 
(d)  A is false but R is true
 
23. One of the import goals of the economic liberalization policy is to achieve full convertibility of the Indian rupee
This is being advocated because
(a) Convertibility of the rupee will stabilize the exchange value against major currencies of the world 
(b) It will attract more foreign capital inflow in India 
(c) It will help to promote exports 
(d) it will help India secure loans from the world financial markets at attractive terms
 
24. Which of the following were the aims behind the setting up of the World Trade Organizations (WTO)? Across countries
1. Promotion of free trade and resource flows across countries
2. Protection of intellectual property rights
3. Managing balanced trade between different countries
4. Promotion of trade between the former East Bloc countries and the western world 
Select the correct answer by using the codes given below:
(a) 1,2,3 and 4   (b) 1 and 2  (c) 2 and 3  (d) 1 and 4 
 
25. The table given below depicts the composition of India’s exports between 1992-93 and 1994-95:
               Items                                                                             Years
                                                                                       1992-39    1993-94      1994-95
(a) Agriculture and   allied products                            6.9           18.0             15.9         
(b) Ores & Minerals                                                        4.0             4.0              3.7
(c)Manufactured goods                                                 75.5            75.6            78.0
(d)  Petroleum Products
The changing composition of the export trade is indicative of structural transformation of Indian  economy in favour of modernization. The best indicator of this trend is the:
(a) relative  share of petroleum products  
(b) decline in the share of agricultural products in exports 
(c) constant share of ores and minerals in exports 
(d) increase in the shares of manufactured products in exports
 
26. Hawala transactions relate to payments:
(a) received in rupees against overseas currencies and vice versa without going through the official channels 
(b) received for sale/transfer of shares without going through the established stock exchanges 
(c) received as commission for services rendered to overseas investors/buyers/sellers inn assisting them to get over the red tape and /or I getting preferential treatment 
(d) made to political parties or to individuals for meeting election expenses
 
27. The Eighth Five Year Plan is different from the earliest ones.
The critical difference lies in the fact that:
(a) it has a considerably larger outlay compared to the earlier plans 
(b) it as a major thrust on agricultural and rural development  
(c) considerable emphasis is placed on infrastructure growth  
(d) industrial licensing has been abolished
 
28. In India, rural incomes are generally lower then the urban incomes. Which of the following reasons account  for this?
1. A large number of farmers are illiterate and know little abut scientific agriculture 
2. Prices of Primary products are lower than f manufactured products
3. Investment in agriculture has been low when compared to investment in industry
Select the correct answer by using the codes given below:
(a) 1,2 and 3   (b)  1 and 3 (c)  1 and 2  (d) 2 and 3  
 
29.  Given below are two statements, one labeled as Assertion (A) and the other labeled 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 correct explanation  
(b) Both A and R are true R is not a correct explanation  
(c) A is true but R is false 
(d)  A is false but R is true
 
30. Consider the following statements:
Most international agencies which find Development programme in India on intergovernmental bilateral agreements, mainly provide.
1. Technical assistance
2. Soft loans which are required to be paid back with interest 
3. Grants, not required to be paid back 
4. Food assistance to be paid back
(a) 2 and 4 are correct 
(b) 1,2 and 3 are correct 
(c) 1,2 and 4 are correct 
(d) 3 and 4 are correct
 
31. Consider the following items imported by India:
1. Capital goods
2. Petroleum
3. Pearls and precious stones 
4. Chemicals 
5. Iron and Steel
The correct sequence of the decreasing order of these items (as per 94-95 figures), in terms of value is
(a) 12345         (b) 12435       (c) 21345      (d) 21453
 
32. 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 
(c) regressive taxation combined with regressive expenditure 
(d) regressive taxation combined with progressive expenditure
 
33. The economic and monetary union of 15 European countries is proposed to be made by 1999. But the currencies of two countries, franc, have already the same value and circulate freely in both the countries.  The countries are:
(a) France and Switzerland  
(b) Switzerland and Luxemburg 
(c) Luxemurg and Belgium  
(d) France and Belgium 
 
34. The average rate of domestic savings (gross) for the Indian economy is currently estimated to be in the range of 
(a)  15 to 20 percent 
(b) 20 to 25 percent  
(c) 25 to 30 percent 
(d) 30 to 35 percent 
 
35. The number of industries for which industrial licensing is required has now been reduced to:
(a)  15         (b)    6            (c)     35          (d)   20 
 
36. The sum of which of the following constitutes Broad Money in India?
1. Currency with the public 
2. Demand deposits with banks 
3. Time deposits with banks 
4. Other deposits wit RBI
(a) 1 and 2  (b) 1,2 and 3  (c) 1,2,3 and 4  (d) 1,2 and 4 
 
37. One of the important agreements reached in the 1996 Ministrial Conference of WTO refers to: 
(a) Commerce in Information Technology 
(b) Multilateral Agreement on Investment  
(c) Multi-fiber Agreement 
(d) Exchange of technical personal
 
38. Human, Development Index comprises literacy rates, life expectancy at birth and 
(a) Gross National Product per head in the US dollars 
(b) Gross Domestics product per head at real purchasing power 
(c) Gross National Product in US dollars 
(d) National Income per head in US dollars
 
39. In India, inflation is measured by the
(a) Wholesale Price Index number 
(b) Consumers Price Index for urban non-manual workers  
(c) Consumers Price index for agricultural workers  
(d) National Income Deflation
 
40. The sixth and the Eighth Five Year Plans covered the period 1930-1985 and 1992-1997 respectively
(a)  1987 -1992  (b) 1986 – 1991  (c)  1985 -1990  (d) 1988 – 1994
 
41. Scheme of (i) Urban Micro-Enterprises, (ii) Urban Wage Employment and (iii) Housing and Shelter Up gradation  
(a) Integrated Rural Development programme   
(b)  Nehru Rojgar Yojana
(c) Jawahar Rojgar Yojana  
(d) Prime Minister’s Rojagar Yojana 
 
42. Give below are two statements, one labeled a  
Assertion (A) and the other labeled as Reason ®
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 correct explanation  
(b) Both A and R are true R is not a correct explanation  
(c) A is true but R is false 
(d)  A is false but R is true
 
43. The contribution of India’s small scale sector to the gross turnover in the manufacturing sector since 1992 has been of the order of :
      (a) 40%  (b) 34 %  (c) 30 %  (d) 45 %
 
44. Which of the following come under Non-plan expenditure? 
1. Subsidies 
2. Interest payments
3. Defenses expenditure
4. Maintenance expenditure for the infrastructure created in the previous plans
Choose the correct answer using the codes given below
(a)  1 and 2   (b) 1 and 3  (c) 2 and 4  (d) 1,2,3 and 4 
 
45. National Income as: 
(a) Net National Product at market price 
(b) Net National Product at factor cost 
(c) Net National Product at market price 
(d) Net National Product at factor cost
 
46. The minimum Alternative Tax (MAT) was initially introduced in the budget of the Government of India for the year:
          (a) 1991- 92       (b) 1992 – 93     (c) 1993- 96      (d) 1996-97 
 
47. Match List I with List II and select the correct answer
List I (Committee)
(a) Disinvestment of shares in Public Sector Enterprises  
(b) Industrial Sickness
(c) Tax Reforms 
(d) Reforms in Insurance Sector
List II (Chaired by)
1. Rajah Chelliah 
2. Onkar Goswami 
3. R.N. Malhotra 
4. C. Rangarajan
(a) 1423  (b) 4213  (c) 4123  (d) 1342
 
48. According to the world Development Report, low income economics are those for which the percapita GNO in 1994 was:
(a) US$ 925 or less 
(b) US$ 825 or less 
(c) US$ 725 or less 
(d) US$ 525 or less
 
49. The banks are required to maintain a certain ratio between their cash in hnd and total assets. This is called
(a) SBR (Statutory Bank Ratio) 
(b) SLR (Statutory Liquid Ratio) 
(c)CBR (Central Liquid Reserve) 
(d) CLR (Central Liquid Reserve)
 
50. Noble Prize in Economics for the year 1997 was awarded for contribution in the area of :
(a) International Economics 
(b) Financial Economics 
(c) Public Economics  
(d) Development Economics
 
51. The accounting year of the Reserve Bank of India is
(a) April –March   
(b) July – June  
(c) October-September
(d) January-December
 
52. Which one of the following is the correct sequence of decreasing order of the given currencies in  terms of their value in Indian Rupees?
(a) US dollar, Canadiann dollar, New Zealand dllar, Hong Kong dollar 
(b) US dollar New Zealand dollar, Canadian dollar, Hong Kong dollar 
(c) US dollar, Hong Kong dollar, Canadian dollar, New Zealand dollar 
 
53. The Capital Account Convertibility of the Indian Rupee implies:
(a) that the Indian Rupee can be exchanged by the authorized dealers for travel  
 (b) that the Indian Rupee can be exchanged for any major currency for the purpose of trade in goods and services 
(c) that the Indian Rupee can be exchanged for any major currency for the purpose of trading financing assets  
(d) None of  the above
 
54. Economic Survey in India is published officially every year by the :
(a) Reserve Bank of India 
(b) Planning Commission of India
(c) Ministry of Finance, Govt of India 
(d) Ministry of Industries, Govt of India
 
55. Some time back, the Government of India decided to delicense ‘white goods’ industry ‘While goods’ include
(a) Stainless steel and aluminium utensils  
(b) milk and milk products 
(c) items purchased for conspicuous consumption 
(d) soaps , detergents and other mass consumption goods.
 
56. Which one of the following regions of the world supplies of maximum of our imported commodities (in terms of rupee value)?
(a) Africa       (b) America  (c) Asia and Oceania  (d) Europe
 
57. The currency of the proposed European Monetary Union will be 
(a)  Dollar      (b)  Euro       (c) Guilder                   (d) Mark
 
58. ‘MERCOSUR’ consists of group of countires of 
(a) Africa  (b) Asia  (c) Latin America  (d) South East Asia
 
59. Consider the following statements
The price of any currency international market is decided by the 
1. World Bank
2. Demand for goods/services provided by the country concerned 

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