Home > Daily-static-mcqs

Daily-static-mcqs 23 May 2024

Daily Static MCQs for UPSC & State PSC Exams - Economics 23 May 2024

image
Daily Static MCQs for UPSC & State PSC Exams - Economics

Q1:

The Reserve Bank of India (RBI) can print hard currency to complete the fiscal deficit in extraordinary circumstances. But why does RBI not take such measures?

A: The Reserve Bank of India Act, 1935 has no provision to print currency to complete the deficit.

B: RBI has to follow the criteria of the International Monetary Fund, completing the deficit.

C: The Reserve Bank of India has to get permission from the President to print currencies, which is a cumbersome process.

D: Printing of hard currency to complete the deficit can cause hyperinflation.

Answer: D

Explanation:

Printing money just to meet the deficit increases the flow of money in the market, leading to hyperinflation. Therefore, RBI generally does not adopt such a measure. Hence, option (d) is correct.


Q2:

Consider the following statements regarding India Infrastructure Fund (IIF).

1. It is a Sebi-regulated domestic enterprise capital fund focused on investing in infrastructure projects.

2. It only invests in greenfield projects.

Which of the statements given above is/are correct?

A: 1 only

B: 2 only

C: Both 1 and 2

D: Neither 1 nor 2

Answer: A

Explanation:

India Infrastructure Fund (IIF) is a SEBI-Penked Domestic Enterprise Capital Fund focused on long-term equity investment in a diverse portfolio of infrastructure projects. The IIF has been sponsored as founding investors by IDFC Limited (IDFC), Citigroup Inc., and India Infrastructure Finance Company Limited (IIFCL).


The IIF aims primarily to invest equity for the long-term in companies that are working in the field of development and operation of infrastructure property/projects in India. The resulting portfolio includes transport (toll roads, rail, ports, and airports), energy and utilities (power generation, renewable, pipeline, transmission, distribution and storage), telecom infrastructure, and urban infrastructure.


IIF investment objectives:


Getting attractive risk-doubtful returns by investing in infrastructure in India by investing in infrastructure.


Searching for investment in infrastructure that is to provide strong, projected, and stable cash flow as dividend distribution, which is likely to have low instability and capital growth of returns.


Hence, option (a) is correct.


Q3:

Which of the following is not an example of 'Sunrise' industry?

A: Hydrogen fuel production

B: Petrochemical industry

C: Automobile industry

D: Space tourism

Answer: C

Explanation:

The sunrise industry is one that is new or relatively new, rapidly growing and expected to be important in the future. Examples of sunrise industries include hydrogen fuel production, petrochemical industry, food processing industry and space tourism.


Hence, option (c) is correct.


Q4:

Which of the following activities/activities in the economy is related to quaternary activities?

1. Medical tourism

2. Production and spread of information

3. Research and development

4. Consultancy services

How many of the statements given above are correct? 

A: Only one

B: Only two

C: Only three

D: All four

Answer: C

Explanation:

Quaternary Activities include the following: Collection, production, and spread of information or information. Quaternary activities focus on research and development and can be considered an advanced form of services with specialized knowledge and technical skills.


Medical tourism is classified into the tertiary sector of the economy. Hence, option (c) is correct.


Q5:

Consider the following statements:

1. The first outline of planning in India was presented by M. Vishwaiwariah.

2. The National Planning Committee was formed in 1938 at the initiative of Congress President Subhash Chandra Bose.

3. Jawaharlal Nehru was made the first chairman of the National Planning Committee formed in 1938.

How many of the statements given above are correct? 

A: Only one

B: Only two

C: All three

D: None

Answer: C

Explanation:

By the 1930s, the idea of planning had made a place in the intellectual and political discussions in India. Many proposals were presented showing the necessity of planning in India. The credit for presenting the first outline of Indian planning goes to M. Visvesvaraya, former Dewan of Mysore Raj, which was published in his book “The Planned Economy of India”.


The National Planning Committee was formed in 1938 on the initiative of Congress President Subhash Chandra Bose. Jawaharlal Nehru was the chairman of this committee. Hence, all the statements are correct.