DAY – 2 : Insta 75 Days Revision Plan-2025 : ECONOMY

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• Question 1 of 30 1. Question 1 points Viatina-19, recently seen in the news, is related to: (a) A new variant of the COVID-19 virus (b) The world’s most expensive cow of Indian origin (c) A high-yielding rice variety developed in Brazil (d) A newly discovered asteroid named after a Brazilian researcher Correct Solution: B About Viatina-19: • Viatina-19 has set the Guinness World Record as the most expensive cow ever sold. • Belongs to the Nellore breed, originally known as Ongole, native to Prakasam district, Andhra Pradesh, India. • Key Characteristics: o Adapted to tropical climates, known for disease resistance and heat tolerance. o Possesses unique genetics, not focused on milk or meat yield, but rather for breeding value and aesthetic traits (e.g., white fur, prominent hump). o Weighs around 1,100 kg, nearly double that of average Nelore cows. • Status in India: o The Ongole breed is now dwindling in India, with a sharp population decline from 15 lakh (1944) to 6.34 lakh (2019 Livestock Census). Incorrect Solution: B About Viatina-19: • Viatina-19 has set the Guinness World Record as the most expensive cow ever sold. • Belongs to the Nellore breed, originally known as Ongole, native to Prakasam district, Andhra Pradesh, India. • Key Characteristics: o Adapted to tropical climates, known for disease resistance and heat tolerance. o Possesses unique genetics, not focused on milk or meat yield, but rather for breeding value and aesthetic traits (e.g., white fur, prominent hump). o Weighs around 1,100 kg, nearly double that of average Nelore cows. • Status in India: o The Ongole breed is now dwindling in India, with a sharp population decline from 15 lakh (1944) to 6.34 lakh (2019 Livestock Census).

#### 1. Question

Viatina-19, recently seen in the news, is related to:

• (a) A new variant of the COVID-19 virus

• (b) The world’s most expensive cow of Indian origin

• (c) A high-yielding rice variety developed in Brazil

• (d) A newly discovered asteroid named after a Brazilian researcher

Solution: B

About Viatina-19: • Viatina-19 has set the Guinness World Record as the most expensive cow ever sold. • Belongs to the Nellore breed, originally known as Ongole, native to Prakasam district, Andhra Pradesh, India. • Key Characteristics: o Adapted to tropical climates, known for disease resistance and heat tolerance. o Possesses unique genetics, not focused on milk or meat yield, but rather for breeding value and aesthetic traits (e.g., white fur, prominent hump). o Weighs around 1,100 kg, nearly double that of average Nelore cows. • Status in India: o The Ongole breed is now dwindling in India, with a sharp population decline from 15 lakh (1944) to 6.34 lakh (2019 Livestock Census).

Solution: B

• Question 2 of 30 2. Question 1 points Consider the following pairs: (Vitamins/Minerals) (Deficiency Diseases) 1. Cyanocobalamin Anaemia 2. Calciferol Beri-beri 3. Retinol Night blindness 4. Copper Bad teeth How many of the above pairs are correctly matched? (a) Only one (b) Only two (c) Only three (d) All four Correct Solution: B Types of Vitamins/ Minerals Deficiency Diseases A (Retinol) Night blindness B1 (Thiamine) Beri-beri B2 (Riboflavin) Retarded growth, bad skin Anaemia B12 (Cyanocobalamin) Scurvy, Pernicious Anaemia C (Ascorbic acid) Deficiency Diseases D (Calciferol) Rickets K (Phylloquinone) Excessive bleeding due to injury Calcium Brittle bones, excessive bleeding Phosphorus Bad teeth and bones Iron Anaemia Iodine Goitre, enlarged thyroid gland Copper Low appetite, retarded growth Hence, option (b) is correct. Incorrect Solution: B Types of Vitamins/ Minerals Deficiency Diseases A (Retinol) Night blindness B1 (Thiamine) Beri-beri B2 (Riboflavin) Retarded growth, bad skin Anaemia B12 (Cyanocobalamin) Scurvy, Pernicious Anaemia C (Ascorbic acid) Deficiency Diseases D (Calciferol) Rickets K (Phylloquinone) Excessive bleeding due to injury Calcium Brittle bones, excessive bleeding Phosphorus Bad teeth and bones Iron Anaemia Iodine Goitre, enlarged thyroid gland Copper Low appetite, retarded growth Hence, option (b) is correct.

#### 2. Question

Consider the following pairs: (Vitamins/Minerals) (Deficiency Diseases) 1. Cyanocobalamin Anaemia 2. Calciferol Beri-beri 3. Retinol Night blindness 4. Copper Bad teeth How many of the above pairs are correctly matched?

• (a) Only one

• (b) Only two

• (c) Only three

• (d) All four

Solution: B

Types of Vitamins/ Minerals Deficiency Diseases A (Retinol) Night blindness B1 (Thiamine) Beri-beri B2 (Riboflavin) Retarded growth, bad skin Anaemia B12 (Cyanocobalamin) Scurvy, Pernicious Anaemia C (Ascorbic acid) Deficiency Diseases D (Calciferol) Rickets K (Phylloquinone) Excessive bleeding due to injury Calcium Brittle bones, excessive bleeding Phosphorus Bad teeth and bones Iron Anaemia Iodine Goitre, enlarged thyroid gland Copper Low appetite, retarded growth Hence, option (b) is correct.

Solution: B

• Question 3 of 30 3. Question 1 points Consider the followings: 1. In forensic wildlife 2. For criminal identification 3. To identify mutilated remains 4. To resolve disputes of maternity/paternity 5. In cases of exchange of babies in hospital ward How many of above are the uses of DNA Fingerprinting? (a) Only two (b) Only three (c) Only four (d) All five Correct Solution: D DNA fingerprinting is the process of determining an individual’s deoxyribonucleic acid characteristics. DNA fingerprinting is used in many ways, including:  Criminal identification: DNA fingerprinting is used to match DNA samples from a criminal suspect to a crime scene.  Paternity/ maternity testing: DNA fingerprinting can be used to establish paternity/ maternity in custody and child support litigation.  Genetic research: DNA fingerprinting can be used to identify patterns of DNA sequences that are unique to an individual  Identification of mutilated remains: Establishment of biological relationships for immigration, organ transplantation and property inheritance cases.  Forensic wildlife: DNA can assist in establishing whether an animal was captive-bred or wild-sourced or to differentiate between look-alike species.  Child swap DNA testing: This test uses the STR Profiling method. Due to this test, determining a newborn’s biological parents has become much easier now. Hence, option (d) is correct. Incorrect Solution: D DNA fingerprinting is the process of determining an individual’s deoxyribonucleic acid characteristics. DNA fingerprinting is used in many ways, including:  Criminal identification: DNA fingerprinting is used to match DNA samples from a criminal suspect to a crime scene.  Paternity/ maternity testing: DNA fingerprinting can be used to establish paternity/ maternity in custody and child support litigation.  Genetic research: DNA fingerprinting can be used to identify patterns of DNA sequences that are unique to an individual  Identification of mutilated remains: Establishment of biological relationships for immigration, organ transplantation and property inheritance cases.  Forensic wildlife: DNA can assist in establishing whether an animal was captive-bred or wild-sourced or to differentiate between look-alike species.  Child swap DNA testing: This test uses the STR Profiling method. Due to this test, determining a newborn’s biological parents has become much easier now. Hence, option (d) is correct.

#### 3. Question

Consider the followings: 1. In forensic wildlife 2. For criminal identification 3. To identify mutilated remains 4. To resolve disputes of maternity/paternity 5. In cases of exchange of babies in hospital ward How many of above are the uses of DNA Fingerprinting?

• (a) Only two

• (b) Only three

• (c) Only four

• (d) All five

Solution: D

DNA fingerprinting is the process of determining an individual’s deoxyribonucleic acid characteristics. DNA fingerprinting is used in many ways, including:  Criminal identification: DNA fingerprinting is used to match DNA samples from a criminal suspect to a crime scene.  Paternity/ maternity testing: DNA fingerprinting can be used to establish paternity/ maternity in custody and child support litigation.  Genetic research: DNA fingerprinting can be used to identify patterns of DNA sequences that are unique to an individual  Identification of mutilated remains: Establishment of biological relationships for immigration, organ transplantation and property inheritance cases.  Forensic wildlife: DNA can assist in establishing whether an animal was captive-bred or wild-sourced or to differentiate between look-alike species.  Child swap DNA testing: This test uses the STR Profiling method. Due to this test, determining a newborn’s biological parents has become much easier now. Hence, option (d) is correct.

Solution: D

• Question 4 of 30 4. Question 1 points Which of the followings is the best suitable definition of Bose-Einstein condensate state of matter? (a) It's created when a neutral gas is heated and some of the electrons are freed from the atoms or molecules. (b) It occurs when particles are cooled to near absolute zero. (c) It is a semi rigid structure suspended in a liquid, which we call a “Colloid”. (d) None of these Correct Solution: B In condensed matter physics, a Bose–Einstein condensate is a state of matter that is typically formed when a gas of bosons at very low densities is cooled to temperatures very close to absolute zero. Hence, option (b) is correct. Incorrect Solution: B In condensed matter physics, a Bose–Einstein condensate is a state of matter that is typically formed when a gas of bosons at very low densities is cooled to temperatures very close to absolute zero. Hence, option (b) is correct.

#### 4. Question

Which of the followings is the best suitable definition of Bose-Einstein condensate state of matter?

• (a) It's created when a neutral gas is heated and some of the electrons are freed from the atoms or molecules.

• (b) It occurs when particles are cooled to near absolute zero.

• (c) It is a semi rigid structure suspended in a liquid, which we call a “Colloid”.

• (d) None of these

Solution: B

In condensed matter physics, a Bose–Einstein condensate is a state of matter that is typically formed when a gas of bosons at very low densities is cooled to temperatures very close to absolute zero. Hence, option (b) is correct.

Solution: B

• Question 5 of 30 5. Question 1 points Consider the following statements with reference to Golden rice: 1. It is a genetically modified rice variety consumed to counter vitamin A deficiency. 2. Its production involves gene transfer from a bacterium. 3. The endosperm of Golden Rice is yellow due to the accumulation of beta-carotene and xanthophylls. How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: C Golden rice is a genetically modified rice that contains beta-carotene, a plant pigment that the body converts into vitamin A. (Hence, statement 1 is correct.) Golden rice is produced by transferring genes from a bacterium into rice. The beta-carotene is produced through genetic engineering in the edible parts of the rice. The endosperm of Golden Rice is yellow due to the accumulation of beta-carotene and xanthophylls. Hence, statement 2 and statement 3 both are correct. Incorrect Solution: C Golden rice is a genetically modified rice that contains beta-carotene, a plant pigment that the body converts into vitamin A. (Hence, statement 1 is correct.) Golden rice is produced by transferring genes from a bacterium into rice. The beta-carotene is produced through genetic engineering in the edible parts of the rice. The endosperm of Golden Rice is yellow due to the accumulation of beta-carotene and xanthophylls. Hence, statement 2 and statement 3 both are correct.

#### 5. Question

Consider the following statements with reference to Golden rice: 1. It is a genetically modified rice variety consumed to counter vitamin A deficiency. 2. Its production involves gene transfer from a bacterium. 3. The endosperm of Golden Rice is yellow due to the accumulation of beta-carotene and xanthophylls. How many of the above statements are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: C

Golden rice is a genetically modified rice that contains beta-carotene, a plant pigment that the body converts into vitamin A. (Hence, statement 1 is correct.) Golden rice is produced by transferring genes from a bacterium into rice. The beta-carotene is produced through genetic engineering in the edible parts of the rice. The endosperm of Golden Rice is yellow due to the accumulation of beta-carotene and xanthophylls. Hence, statement 2 and statement 3 both are correct.

Solution: C

• Question 6 of 30 6. Question 1 points With reference to Nanomicelles, consider the following statements: 1. They have a hydrophilic outer shell and hydrophobic CORE. 2. They can help in cancer treatment through overcoming drug resistance. Which of the above statements is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Correct Solution: C • Nanomicelles are typically spherical, but can sometimes take other shapes, such as cylinders and ellipsoids. The small-size and shape of nanomicelles is only possible due to the molecular geometry of the particle. • The shapes formed also depend on the ionic strength, surfactant concentration, and pH strength of the solutions they are placed in. • Nanomicelles are ultramicroscopic structures used in the treatment of disease. They have a hydrophilic outer shell and a hydrophobic core, making them capable of delivering poorly water-soluble drugs and protecting drug molecules. (Hence, statement 1 is correct) • Nanomicelles are also hypothesized to improve cancer treatment through overcoming drug resistance, improving anti-cancer drug efficacy, and reducing drug toxicity. (Hence, statement 2 is correct) Incorrect Solution: C • Nanomicelles are typically spherical, but can sometimes take other shapes, such as cylinders and ellipsoids. The small-size and shape of nanomicelles is only possible due to the molecular geometry of the particle. • The shapes formed also depend on the ionic strength, surfactant concentration, and pH strength of the solutions they are placed in. • Nanomicelles are ultramicroscopic structures used in the treatment of disease. They have a hydrophilic outer shell and a hydrophobic core, making them capable of delivering poorly water-soluble drugs and protecting drug molecules. (Hence, statement 1 is correct) • Nanomicelles are also hypothesized to improve cancer treatment through overcoming drug resistance, improving anti-cancer drug efficacy, and reducing drug toxicity. (Hence, statement 2 is correct)

#### 6. Question

With reference to Nanomicelles, consider the following statements: 1. They have a hydrophilic outer shell and hydrophobic CORE. 2. They can help in cancer treatment through overcoming drug resistance. Which of the above statements is/are correct?

• (a) 1 only

• (b) 2 only

• (c) Both 1 and 2

• (d) Neither 1 nor 2

Solution: C

• Nanomicelles are typically spherical, but can sometimes take other shapes, such as cylinders and ellipsoids. The small-size and shape of nanomicelles is only possible due to the molecular geometry of the particle. • The shapes formed also depend on the ionic strength, surfactant concentration, and pH strength of the solutions they are placed in. • Nanomicelles are ultramicroscopic structures used in the treatment of disease. They have a hydrophilic outer shell and a hydrophobic core, making them capable of delivering poorly water-soluble drugs and protecting drug molecules. (Hence, statement 1 is correct) • Nanomicelles are also hypothesized to improve cancer treatment through overcoming drug resistance, improving anti-cancer drug efficacy, and reducing drug toxicity. (Hence, statement 2 is correct)

Solution: C

• Question 7 of 30 7. Question 1 points With reference to Satellite Internet, consider the following statements: 1. It can offer speeds similar to cable internet. 2. It offers lower latency compared to cable and fibre internet. 3. Satellite transmission is not affected by weather conditions. How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: A Satellite internet is wireless internet beamed down from satellites orbiting the Earth. It’s a lot different from land-based internet services like cable or DSL, which transmit data through wires running underground. Some satellite internet plans can even give you internet speeds similar to cable internet. Hence, statement 1 is correct. Satellite internet isn’t capable of offering lower latency compared to cable or fiber connections, as the signal travels a longer distance. This causes a slight delay between giving a command and getting the output. Hence, statement 2 is incorrect. Satellite Internet works by making use of radio waves. Like TV and radio broadcasts, the energy required to transmit data communications can be absorbed by water molecules in the air. As such, heavy rain or a thunderstorm could result in a weaker satellite Internet signal. (Hence, statement 3 is incorrect.) Incorrect Solution: A Satellite internet is wireless internet beamed down from satellites orbiting the Earth. It’s a lot different from land-based internet services like cable or DSL, which transmit data through wires running underground. Some satellite internet plans can even give you internet speeds similar to cable internet. Hence, statement 1 is correct. Satellite internet isn’t capable of offering lower latency compared to cable or fiber connections, as the signal travels a longer distance. This causes a slight delay between giving a command and getting the output. Hence, statement 2 is incorrect. Satellite Internet works by making use of radio waves. Like TV and radio broadcasts, the energy required to transmit data communications can be absorbed by water molecules in the air. As such, heavy rain or a thunderstorm could result in a weaker satellite Internet signal. (Hence, statement 3 is incorrect.)

#### 7. Question

With reference to Satellite Internet, consider the following statements: 1. It can offer speeds similar to cable internet. 2. It offers lower latency compared to cable and fibre internet. 3. Satellite transmission is not affected by weather conditions. How many of the above statements are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: A

Satellite internet is wireless internet beamed down from satellites orbiting the Earth. It’s a lot different from land-based internet services like cable or DSL, which transmit data through wires running underground. Some satellite internet plans can even give you internet speeds similar to cable internet.

Hence, statement 1 is correct.

Satellite internet isn’t capable of offering lower latency compared to cable or fiber connections, as the signal travels a longer distance. This causes a slight delay between giving a command and getting the output.

Hence, statement 2 is incorrect.

Satellite Internet works by making use of radio waves. Like TV and radio broadcasts, the energy required to transmit data communications can be absorbed by water molecules in the air. As such, heavy rain or a thunderstorm could result in a weaker satellite Internet signal. (Hence, statement 3 is incorrect.)

Solution: A

Hence, statement 1 is correct.

Hence, statement 2 is incorrect.

• Question 8 of 30 8. Question 1 points Molniya orbit is primarily used for: (a) Providing internet services in equatorial regions (b) Continuous coverage of high-latitude regions (c) Global navigation satellite systems like GPS (d) Observing the Sun’s activity Correct Solution: B Molniya orbits are highly elliptical orbits with a high inclination (around 63.4 degrees). • This specific inclination and high eccentricity allow a satellite in a Molniya orbit to spend a significant amount of its orbital period at its apogee (the highest point in its orbit), which is positioned over high-latitude regions. • This long dwell time at high latitudes provides near-continuous coverage of these areas, which would be difficult to achieve with geostationary satellites that are positioned over the equator. • Providing internet services in equatorial regions: Geostationary orbits are much better suited for continuous coverage of equatorial regions. • Global navigation satellite systems like GPS: GPS uses Medium Earth Orbit (MEO) constellations with multiple satellites to provide global coverage. • Observing the Sun’s activity: Satellites designed for solar observation are typically placed in orbits that allow for a continuous or near-continuous view of the Sun, such as orbits around the L1 Lagrange point. Incorrect Solution: B Molniya orbits are highly elliptical orbits with a high inclination (around 63.4 degrees). • This specific inclination and high eccentricity allow a satellite in a Molniya orbit to spend a significant amount of its orbital period at its apogee (the highest point in its orbit), which is positioned over high-latitude regions. • This long dwell time at high latitudes provides near-continuous coverage of these areas, which would be difficult to achieve with geostationary satellites that are positioned over the equator. • Providing internet services in equatorial regions: Geostationary orbits are much better suited for continuous coverage of equatorial regions. • Global navigation satellite systems like GPS: GPS uses Medium Earth Orbit (MEO) constellations with multiple satellites to provide global coverage. • Observing the Sun’s activity: Satellites designed for solar observation are typically placed in orbits that allow for a continuous or near-continuous view of the Sun, such as orbits around the L1 Lagrange point.

#### 8. Question

Molniya orbit is primarily used for:

• (a) Providing internet services in equatorial regions

• (b) Continuous coverage of high-latitude regions

• (c) Global navigation satellite systems like GPS

• (d) Observing the Sun’s activity

Solution: B

Molniya orbits are highly elliptical orbits with a high inclination (around 63.4 degrees). • This specific inclination and high eccentricity allow a satellite in a Molniya orbit to spend a significant amount of its orbital period at its apogee (the highest point in its orbit), which is positioned over high-latitude regions. • This long dwell time at high latitudes provides near-continuous coverage of these areas, which would be difficult to achieve with geostationary satellites that are positioned over the equator. • Providing internet services in equatorial regions: Geostationary orbits are much better suited for continuous coverage of equatorial regions. • Global navigation satellite systems like GPS: GPS uses Medium Earth Orbit (MEO) constellations with multiple satellites to provide global coverage. • Observing the Sun’s activity: Satellites designed for solar observation are typically placed in orbits that allow for a continuous or near-continuous view of the Sun, such as orbits around the L1 Lagrange point.

Solution: B

• Question 9 of 30 9. Question 1 points Consider the following statements regarding the Blockchains: 1. They are a new data structure that is secure, cryptography-based, and distributed across a network. 2. Blockchains allows the transfer of digital goods without the need for centralized authorization of transactions. Which of the above statements is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Correct Solution: C  They are a new data structure that is secure, cryptography-based, and distributed across a network. The technology supports cryptocurrencies such as Bitcoin, and the transfer of any data or digital asset. (Hence, statement 1 is correct.)  Spearheaded by Bitcoin, blockchains achieve consensus among distributed nodes, allowing the transfer of digital goods without the need for centralized authorisation of transactions. (Hence, statement 2 is correct.) Incorrect Solution: C  They are a new data structure that is secure, cryptography-based, and distributed across a network. The technology supports cryptocurrencies such as Bitcoin, and the transfer of any data or digital asset. (Hence, statement 1 is correct.)  Spearheaded by Bitcoin, blockchains achieve consensus among distributed nodes, allowing the transfer of digital goods without the need for centralized authorisation of transactions. (Hence, statement 2 is correct.)

#### 9. Question

Consider the following statements regarding the Blockchains: 1. They are a new data structure that is secure, cryptography-based, and distributed across a network. 2. Blockchains allows the transfer of digital goods without the need for centralized authorization of transactions. Which of the above statements is/are correct?

• (a) 1 only

• (b) 2 only

• (c) Both 1 and 2

• (d) Neither 1 nor 2

Solution: C

 They are a new data structure that is secure, cryptography-based, and distributed across a network. The technology supports cryptocurrencies such as Bitcoin, and the transfer of any data or digital asset. (Hence, statement 1 is correct.)  Spearheaded by Bitcoin, blockchains achieve consensus among distributed nodes, allowing the transfer of digital goods without the need for centralized authorisation of transactions. (Hence, statement 2 is correct.)

Solution: C

• Question 10 of 30 10. Question 1 points Consider the followings: 1. Image recognition 2. Medical research 3. Aerospace and Defense 4. Financial Services 5. Law Enforcement How many of the above are the applications of Machine Learning? (a) Only two (b) Only three (c) Only four (d) All five Correct Solution: D Some Applications of Machine Learning:  Image Recognition: It classifies images, clusters them by similarities, and performs object recognition within scenes. For example, ViSENZE has developed commercial applications that can empower image recognition and tagging using their deep learning networks.  Law Enforcement: Deep learning algorithms are important in analyzing transactional data to detect patterns indicative of fraudulent or criminal activity. For example, speech recognition like Siri or Alexa and computer vision technologies  Financial Services: Financial institutions leverage predictive analytics powered by deep learning to inform algorithmic trading, assess business risks for loan approvals, detect fraud, and manage credit and investment portfolios.  Healthcare: Deep learning has found extensive applications in healthcare, particularly in medical imaging detecting disease from X-ray images and classifying them into several disease types in radiology. It aids specialists in interpreting a large volume of images in less time, thereby improving diagnostic accuracy.  Medical Research: Cancer researchers are using deep learning to automatically detect cancer cells. Teams at UCLA built an advanced microscope that yields a high-dimensional data set used to train a deep learning application to accurately identify cancer cells.  Aerospace and Defense: Deep learning is used to identify objects from satellites that locate areas of interest, and identify safe or unsafe zones for troops. Hence, option (d) is correct. Incorrect Solution: D Some Applications of Machine Learning:  Image Recognition: It classifies images, clusters them by similarities, and performs object recognition within scenes. For example, ViSENZE has developed commercial applications that can empower image recognition and tagging using their deep learning networks.  Law Enforcement: Deep learning algorithms are important in analyzing transactional data to detect patterns indicative of fraudulent or criminal activity. For example, speech recognition like Siri or Alexa and computer vision technologies  Financial Services: Financial institutions leverage predictive analytics powered by deep learning to inform algorithmic trading, assess business risks for loan approvals, detect fraud, and manage credit and investment portfolios.  Healthcare: Deep learning has found extensive applications in healthcare, particularly in medical imaging detecting disease from X-ray images and classifying them into several disease types in radiology. It aids specialists in interpreting a large volume of images in less time, thereby improving diagnostic accuracy.  Medical Research: Cancer researchers are using deep learning to automatically detect cancer cells. Teams at UCLA built an advanced microscope that yields a high-dimensional data set used to train a deep learning application to accurately identify cancer cells.  Aerospace and Defense: Deep learning is used to identify objects from satellites that locate areas of interest, and identify safe or unsafe zones for troops. Hence, option (d) is correct.

#### 10. Question

Consider the followings: 1. Image recognition 2. Medical research 3. Aerospace and Defense 4. Financial Services 5. Law Enforcement How many of the above are the applications of Machine Learning?

• (a) Only two

• (b) Only three

• (c) Only four

• (d) All five

Solution: D

Some Applications of Machine Learning:  Image Recognition: It classifies images, clusters them by similarities, and performs object recognition within scenes. For example, ViSENZE has developed commercial applications that can empower image recognition and tagging using their deep learning networks.  Law Enforcement: Deep learning algorithms are important in analyzing transactional data to detect patterns indicative of fraudulent or criminal activity. For example, speech recognition like Siri or Alexa and computer vision technologies  Financial Services: Financial institutions leverage predictive analytics powered by deep learning to inform algorithmic trading, assess business risks for loan approvals, detect fraud, and manage credit and investment portfolios.  Healthcare: Deep learning has found extensive applications in healthcare, particularly in medical imaging detecting disease from X-ray images and classifying them into several disease types in radiology. It aids specialists in interpreting a large volume of images in less time, thereby improving diagnostic accuracy.  Medical Research: Cancer researchers are using deep learning to automatically detect cancer cells. Teams at UCLA built an advanced microscope that yields a high-dimensional data set used to train a deep learning application to accurately identify cancer cells.  Aerospace and Defense: Deep learning is used to identify objects from satellites that locate areas of interest, and identify safe or unsafe zones for troops.

Hence, option (d) is correct.

Solution: D

Hence, option (d) is correct.

• Question 11 of 30 11. Question 1 points Consider the following statements regarding Artificial Solar Eclipse (ASE): 1. ASE can be created using two satellites, acting as occulter and coronograph respectively. 2. ASE helps to study coronal mass ejections and predict geomagnetic storms. 3. The Proba-3 Mission involves formation of ASE. How many of the statements given above is/are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: C • An artificial Solar eclipse mimics the natural phenomenon where the Moon blocks sunlight allowing detailed observation of the sun’s corona. • It can be created by using two satellites aligned to block the sun’s light, creating a controlled shadow for scientific study • This is helpful to study Sun’s corona, coronal mass injections as well as predict geomagnetic storms and disruptions to satellite and Earth based systems. Hence statements 1 and 2 are correct • The Proba – 3 mission or the Project for Onboard Autonomy has been launched by European Space Agency and ISRO. • It is led by European Space Agency and has been launched by ISRO under its commercial arm New Space India Limited. • The mission includes two spacecrafts, which will fly in formation with one satellite acting as occulter and the other as coronograph, the creating an artificial solar eclipse. Hence statement 3 is correct Incorrect Solution: C • An artificial Solar eclipse mimics the natural phenomenon where the Moon blocks sunlight allowing detailed observation of the sun’s corona. • It can be created by using two satellites aligned to block the sun’s light, creating a controlled shadow for scientific study • This is helpful to study Sun’s corona, coronal mass injections as well as predict geomagnetic storms and disruptions to satellite and Earth based systems. Hence statements 1 and 2 are correct • The Proba – 3 mission or the Project for Onboard Autonomy has been launched by European Space Agency and ISRO. • It is led by European Space Agency and has been launched by ISRO under its commercial arm New Space India Limited. • The mission includes two spacecrafts, which will fly in formation with one satellite acting as occulter and the other as coronograph, the creating an artificial solar eclipse. Hence statement 3 is correct

#### 11. Question

Consider the following statements regarding Artificial Solar Eclipse (ASE): 1. ASE can be created using two satellites, acting as occulter and coronograph respectively. 2. ASE helps to study coronal mass ejections and predict geomagnetic storms. 3. The Proba-3 Mission involves formation of ASE. How many of the statements given above is/are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: C • An artificial Solar eclipse mimics the natural phenomenon where the Moon blocks sunlight allowing detailed observation of the sun’s corona. • It can be created by using two satellites aligned to block the sun’s light, creating a controlled shadow for scientific study • This is helpful to study Sun’s corona, coronal mass injections as well as predict geomagnetic storms and disruptions to satellite and Earth based systems. Hence statements 1 and 2 are correct • The Proba – 3 mission or the Project for Onboard Autonomy has been launched by European Space Agency and ISRO. • It is led by European Space Agency and has been launched by ISRO under its commercial arm New Space India Limited. • The mission includes two spacecrafts, which will fly in formation with one satellite acting as occulter and the other as coronograph, the creating an artificial solar eclipse. Hence statement 3 is correct

• Question 12 of 30 12. Question 1 points Consider the following: 1. Millimetre waves 2. Particle beams 3. Germ aerosol sprays How many of the above are categorised as Directed Energy Weapons? (a) Only one (b) Only two (c) All three (d) None Correct Solution: B Directed Energy Weapons use concentrated energy from electromagnetic or particle Technology rather than kinetic energy to degrade or destroy targets. Most common DEWs include: • High Energy lasers that have significant advantages over conventional munitions such as the ability to engage targets at the speed of light and with pinpoint accuracy. • High power microwave weapons have a shorter range than HELs and their beam degrades over long distances; but they are not affected by weather and can impact target over a wide area. • Millimetre wave directed energy has various non lethal military applications including crowd control and area denial • Particle beams are weapons that have strong penetration ability, high speed, high energy and can operate in all weather conditions. Hence options 1 and 2 are correct • Germ Aerosol spray is a form of biological weapon, also known as bioweapon. • Bioweapons include lethal agents like Anthrax, plague, smallpox, botulinum and other harmful viruses along with toxins or incapacitating agents that harm population at large. Hence option 3 is incorrect Incorrect Solution: B Directed Energy Weapons use concentrated energy from electromagnetic or particle Technology rather than kinetic energy to degrade or destroy targets. Most common DEWs include: • High Energy lasers that have significant advantages over conventional munitions such as the ability to engage targets at the speed of light and with pinpoint accuracy. • High power microwave weapons have a shorter range than HELs and their beam degrades over long distances; but they are not affected by weather and can impact target over a wide area. • Millimetre wave directed energy has various non lethal military applications including crowd control and area denial • Particle beams are weapons that have strong penetration ability, high speed, high energy and can operate in all weather conditions. Hence options 1 and 2 are correct • Germ Aerosol spray is a form of biological weapon, also known as bioweapon. • Bioweapons include lethal agents like Anthrax, plague, smallpox, botulinum and other harmful viruses along with toxins or incapacitating agents that harm population at large. Hence option 3 is incorrect

#### 12. Question

Consider the following: 1. Millimetre waves 2. Particle beams 3. Germ aerosol sprays How many of the above are categorised as Directed Energy Weapons?

• (a) Only one

• (b) Only two

• (c) All three

Solution: B

Directed Energy Weapons use concentrated energy from electromagnetic or particle Technology rather than kinetic energy to degrade or destroy targets. Most common DEWs include: • High Energy lasers that have significant advantages over conventional munitions such as the ability to engage targets at the speed of light and with pinpoint accuracy. • High power microwave weapons have a shorter range than HELs and their beam degrades over long distances; but they are not affected by weather and can impact target over a wide area. • Millimetre wave directed energy has various non lethal military applications including crowd control and area denial • Particle beams are weapons that have strong penetration ability, high speed, high energy and can operate in all weather conditions. Hence options 1 and 2 are correct • Germ Aerosol spray is a form of biological weapon, also known as bioweapon. • Bioweapons include lethal agents like Anthrax, plague, smallpox, botulinum and other harmful viruses along with toxins or incapacitating agents that harm population at large. Hence option 3 is incorrect

Solution: B

• Question 13 of 30 13. Question 1 points SEBI recently revised the definition of “connected persons” under its insider trading regulations. Which of the following scenarios would now fall under the broadened scope of “connected persons” according to the new amendments? (A) A casual acquaintance who occasionally interacts with a company’s CFO at public events. (B) A roommate sharing a residence with a company insider who is privy to unpublished price-sensitive information (UPSI). (C) A distant relative living abroad, never meeting or communicating with the insider. (D) A former employee who left the company five years ago and has no current means of accessing UPSI. Correct Answer: B Explanation: SEBI’s recent amendments to the Prohibition of Insider Trading (PIT) Regulations significantly broaden the definition of “connected persons.” Previously, “connected persons” focused on those who had a direct link to the company or its insiders, often through employment or professional associations. Now, the definition extends to include individuals who may not be directly employed by or formally associated with the company, but who nonetheless have potential access to unpublished price-sensitive information (UPSI). For instance, individuals living in the same household as someone with UPSI—such as roommates, family members, or even long-term housemates—can now be classified as “connected persons.” This reflects SEBI’s intent to close loopholes where sensitive information could be leaked or shared informally at home. Option (B) fits this criterion perfectly: a roommate sharing residence with an insider is likely to overhear or access UPSI indirectly. Incorrect Answer: B Explanation: SEBI’s recent amendments to the Prohibition of Insider Trading (PIT) Regulations significantly broaden the definition of “connected persons.” Previously, “connected persons” focused on those who had a direct link to the company or its insiders, often through employment or professional associations. Now, the definition extends to include individuals who may not be directly employed by or formally associated with the company, but who nonetheless have potential access to unpublished price-sensitive information (UPSI). For instance, individuals living in the same household as someone with UPSI—such as roommates, family members, or even long-term housemates—can now be classified as “connected persons.” This reflects SEBI’s intent to close loopholes where sensitive information could be leaked or shared informally at home. Option (B) fits this criterion perfectly: a roommate sharing residence with an insider is likely to overhear or access UPSI indirectly.

#### 13. Question

SEBI recently revised the definition of “connected persons” under its insider trading regulations. Which of the following scenarios would now fall under the broadened scope of “connected persons” according to the new amendments?

• (A) A casual acquaintance who occasionally interacts with a company’s CFO at public events.

• (B) A roommate sharing a residence with a company insider who is privy to unpublished price-sensitive information (UPSI).

• (C) A distant relative living abroad, never meeting or communicating with the insider.

• (D) A former employee who left the company five years ago and has no current means of accessing UPSI.

Answer: B

Explanation: SEBI’s recent amendments to the Prohibition of Insider Trading (PIT) Regulations significantly broaden the definition of “connected persons.” Previously, “connected persons” focused on those who had a direct link to the company or its insiders, often through employment or professional associations. Now, the definition extends to include individuals who may not be directly employed by or formally associated with the company, but who nonetheless have potential access to unpublished price-sensitive information (UPSI).

For instance, individuals living in the same household as someone with UPSI—such as roommates, family members, or even long-term housemates—can now be classified as “connected persons.” This reflects SEBI’s intent to close loopholes where sensitive information could be leaked or shared informally at home. Option (B) fits this criterion perfectly: a roommate sharing residence with an insider is likely to overhear or access UPSI indirectly.

Answer: B

• Question 14 of 30 14. Question 1 points Consider the following statements : Statement – I : Participatory Notes promote inflow of foreign capital into the Indian stock market. Statement – II : Participatory notes are issued by Foreign Institutional Investors to foreign investors. Which of the following is correct in respect of the above statements ? (a) Both Statement -I and Statement -II are correct and Statement -II explains Statement -I (b) Both Statement -I and Statement -II are correct but Statement -II does not explain Statement -I (c) Statement- I is correct but Statement -II is incorrect (d) Statement- I is incorrect but Statement -II is correct Correct Solution : A Participatory Notes are offshore derivative instruments used for making investment in stock markets. However they are not used within the country; these are used outside India for making investment in shares listed in the Indian stock market; hence are called Offshore Derivative Instrument. P-Notes are a significant source of foreign capital inflow into the Indian market. They contribute to the liquidity in Indian capital markets and makes it easier to buy and sell securities. Hence statement 1 is correct P-Notes are issued by Foreign Institutional Investors (FIIs) to foreign investors. FIIs registered with SEBI and brokers issue these stock market instruments. These allows foreign high net worth individuals, hedge funds and other investors to put money directly in Indian market, thus increasing inflow of foreign capital. Hence statement 2 is correct and it correctly explains statement 1. Incorrect Solution : A Participatory Notes are offshore derivative instruments used for making investment in stock markets. However they are not used within the country; these are used outside India for making investment in shares listed in the Indian stock market; hence are called Offshore Derivative Instrument. P-Notes are a significant source of foreign capital inflow into the Indian market. They contribute to the liquidity in Indian capital markets and makes it easier to buy and sell securities. Hence statement 1 is correct P-Notes are issued by Foreign Institutional Investors (FIIs) to foreign investors. FIIs registered with SEBI and brokers issue these stock market instruments. These allows foreign high net worth individuals, hedge funds and other investors to put money directly in Indian market, thus increasing inflow of foreign capital. Hence statement 2 is correct and it correctly explains statement 1.

#### 14. Question

Consider the following statements :

Statement – I :

Participatory Notes promote inflow of foreign capital into the Indian stock market.

Statement – II :

Participatory notes are issued by Foreign Institutional Investors to foreign investors.

Which of the following is correct in respect of the above statements ?

• (a) Both Statement -I and Statement -II are correct and Statement -II explains Statement -I

• (b) Both Statement -I and Statement -II are correct but Statement -II does not explain Statement -I

• (c) Statement- I is correct but Statement -II is incorrect

• (d) Statement- I is incorrect but Statement -II is correct

Solution : A

• Participatory Notes are offshore derivative instruments used for making investment in stock markets.

• However they are not used within the country; these are used outside India for making investment in shares listed in the Indian stock market; hence are called Offshore Derivative Instrument.

• P-Notes are a significant source of foreign capital inflow into the Indian market.

• They contribute to the liquidity in Indian capital markets and makes it easier to buy and sell securities.

Hence statement 1 is correct

• P-Notes are issued by Foreign Institutional Investors (FIIs) to foreign investors.

• FIIs registered with SEBI and brokers issue these stock market instruments.

• These allows foreign high net worth individuals, hedge funds and other investors to put money directly in Indian market, thus increasing inflow of foreign capital.

Hence statement 2 is correct and it correctly explains statement 1.

Solution : A

• Participatory Notes are offshore derivative instruments used for making investment in stock markets.

• However they are not used within the country; these are used outside India for making investment in shares listed in the Indian stock market; hence are called Offshore Derivative Instrument.

• P-Notes are a significant source of foreign capital inflow into the Indian market.

• They contribute to the liquidity in Indian capital markets and makes it easier to buy and sell securities.

Hence statement 1 is correct

• P-Notes are issued by Foreign Institutional Investors (FIIs) to foreign investors.

• FIIs registered with SEBI and brokers issue these stock market instruments.

• These allows foreign high net worth individuals, hedge funds and other investors to put money directly in Indian market, thus increasing inflow of foreign capital.

Hence statement 2 is correct and it correctly explains statement 1.

• Question 15 of 30 15. Question 1 points With reference to economy of India, *Short* *Selling* refers to : (a) Providing Angel investors with more than 40% equity stake in a company for increased funding (b) An investment strategy that speculates on the decline in price of stock. (c) A situation when an investor lends security and sell it with the plan to buy it back for more money. (d) A strategy involving selling stakes of a company for a short period temporarily with a promise to buy it back at a later date Correct Solution : B Short Selling is a trading strategy based on the expectation that the price of the security will fall. It is an investment or trading strategy that speculates on the decline in a stock or other security’s price. It occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money. Short sellers bet on and profit from a drop in security’s price; this is in contrast to long investors who want the price of security to increase. Short selling has high risk/reward ratio; it can offer big profits but losses can mount quickly and infinitely due to marginal calls. Hence option B is correct Incorrect Solution : B Short Selling is a trading strategy based on the expectation that the price of the security will fall. It is an investment or trading strategy that speculates on the decline in a stock or other security’s price. It occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money. Short sellers bet on and profit from a drop in security’s price; this is in contrast to long investors who want the price of security to increase. Short selling has high risk/reward ratio; it can offer big profits but losses can mount quickly and infinitely due to marginal calls. Hence option B is correct

#### 15. Question

With reference to economy of India, *Short* *Selling* refers to :

• (a) Providing Angel investors with more than 40% equity stake in a company for increased funding

• (b) An investment strategy that speculates on the decline in price of stock.

• (c) A situation when an investor lends security and sell it with the plan to buy it back for more money.

• (d) A strategy involving selling stakes of a company for a short period temporarily with a promise to buy it back at a later date

Solution : B

• Short Selling is a trading strategy based on the expectation that the price of the security will fall.

• It is an investment or trading strategy that speculates on the decline in a stock or other security’s price.

• It occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money.

• Short sellers bet on and profit from a drop in security’s price; this is in contrast to long investors who want the price of security to increase.

• Short selling has high risk/reward ratio; it can offer big profits but losses can mount quickly and infinitely due to marginal calls.

Hence option B is correct

Solution : B

• Short Selling is a trading strategy based on the expectation that the price of the security will fall.

• It is an investment or trading strategy that speculates on the decline in a stock or other security’s price.

• It occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money.

• Short sellers bet on and profit from a drop in security’s price; this is in contrast to long investors who want the price of security to increase.

• Short selling has high risk/reward ratio; it can offer big profits but losses can mount quickly and infinitely due to marginal calls.

Hence option B is correct

• Question 16 of 30 16. Question 1 points Which of the following best describes the term ‘Finfluencer’ ? (a) An investment platform that uses repeated advertisements in between an online programme to promote mutual funds (b) A Survey to study the impact of online financial advices on stock market activities (c) Persons who offer advise and share personal experiences regarding finances on social media platforms (d) A popular celebrity endorsing a particular financial instrument on social media platforms Correct Solution : C Finfluencers are persons with public social media platforms offering advise and sharing personal experience about money and investment in stocks. Their videos cover budgeting, investing, property buying, cryptocurrency advise and financial trained tracking. Recently the Securities and Exchange Board of India has made guidelines for finfluencers. SEBI has asked brokers and mutual funds to stop using the services of unregulated financial influencers for marketing and advertising campaigns. Such regulations are required as the number of unregistered investment advisors giving unsolicited stock tips on social media platforms has increased many fold Also, certain companies use social media platform to boost their share prices through these finfluencers. Hence option C is correct Incorrect Solution : C Finfluencers are persons with public social media platforms offering advise and sharing personal experience about money and investment in stocks. Their videos cover budgeting, investing, property buying, cryptocurrency advise and financial trained tracking. Recently the Securities and Exchange Board of India has made guidelines for finfluencers. SEBI has asked brokers and mutual funds to stop using the services of unregulated financial influencers for marketing and advertising campaigns. Such regulations are required as the number of unregistered investment advisors giving unsolicited stock tips on social media platforms has increased many fold Also, certain companies use social media platform to boost their share prices through these finfluencers. Hence option C is correct

#### 16. Question

Which of the following best describes the term ‘Finfluencer’ ?

• (a) An investment platform that uses repeated advertisements in between an online programme to promote mutual funds

• (b) A Survey to study the impact of online financial advices on stock market activities

• (c) Persons who offer advise and share personal experiences regarding finances on social media platforms

• (d) A popular celebrity endorsing a particular financial instrument on social media platforms

Solution : C

• Finfluencers are persons with public social media platforms offering advise and sharing personal experience about money and investment in stocks.

• Their videos cover budgeting, investing, property buying, cryptocurrency advise and financial trained tracking.

• Recently the Securities and Exchange Board of India has made guidelines for finfluencers.

• SEBI has asked brokers and mutual funds to stop using the services of unregulated financial influencers for marketing and advertising campaigns.

• Such regulations are required as the number of unregistered investment advisors giving unsolicited stock tips on social media platforms has increased many fold

• Also, certain companies use social media platform to boost their share prices through these finfluencers.

Hence option C is correct

Solution : C

• Finfluencers are persons with public social media platforms offering advise and sharing personal experience about money and investment in stocks.

• Their videos cover budgeting, investing, property buying, cryptocurrency advise and financial trained tracking.

• Recently the Securities and Exchange Board of India has made guidelines for finfluencers.

• SEBI has asked brokers and mutual funds to stop using the services of unregulated financial influencers for marketing and advertising campaigns.

• Such regulations are required as the number of unregistered investment advisors giving unsolicited stock tips on social media platforms has increased many fold

• Also, certain companies use social media platform to boost their share prices through these finfluencers.

Hence option C is correct

• Question 17 of 30 17. Question 1 points Consider the following statements regarding Black Box Trading: It uses computer program to execute trade based on mathematical model in financial markets. Under Securities and Exchange Board of India guidelines 2008, only retail investors can participate in Black Box trading. 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 Correct Solution: A Black Box trading, better known as Algorithmic trading uses a computer program that follows defined set of instructions or an algorithm to place a trade based on timing, price, quantity or any mathematical model. It combines computer programming and financial markets to execute trade at precise moments. It eliminates human intervention and emotions allowing trade based on mathematical models, historical data and market conditions. It follows pre-coded algorithms to identify trading opportunities and execute orders. It uses technical indicators, price movements, volume and other data to determine trade entry and exit points. Hence statement 1 is correct In 2008 SEBI introduced Black box trading for the first time only for institutional investors. Recently SEBI has proposed a framework to allow retail investors to participate in such trading through stock brokers. Retail investors will be required to conduct back testing of their algorithms and provide proof of their efficiency. Also, algorithms may require certification from the exchanges to ensure they adhere to market standards. Hence statement 2 is incorrect Incorrect Solution: A Black Box trading, better known as Algorithmic trading uses a computer program that follows defined set of instructions or an algorithm to place a trade based on timing, price, quantity or any mathematical model. It combines computer programming and financial markets to execute trade at precise moments. It eliminates human intervention and emotions allowing trade based on mathematical models, historical data and market conditions. It follows pre-coded algorithms to identify trading opportunities and execute orders. It uses technical indicators, price movements, volume and other data to determine trade entry and exit points. Hence statement 1 is correct In 2008 SEBI introduced Black box trading for the first time only for institutional investors. Recently SEBI has proposed a framework to allow retail investors to participate in such trading through stock brokers. Retail investors will be required to conduct back testing of their algorithms and provide proof of their efficiency. Also, algorithms may require certification from the exchanges to ensure they adhere to market standards. Hence statement 2 is incorrect

#### 17. Question

Consider the following statements regarding Black Box Trading:

• It uses computer program to execute trade based on mathematical model in financial markets.

• Under Securities and Exchange Board of India guidelines 2008, only retail investors can participate in Black Box trading.

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

Solution: A

• Black Box trading, better known as Algorithmic trading uses a computer program that follows defined set of instructions or an algorithm to place a trade based on timing, price, quantity or any mathematical model.

• It combines computer programming and financial markets to execute trade at precise moments.

• It eliminates human intervention and emotions allowing trade based on mathematical models, historical data and market conditions.

• It follows pre-coded algorithms to identify trading opportunities and execute orders.

• It uses technical indicators, price movements, volume and other data to determine trade entry and exit points.

Hence statement 1 is correct

• In 2008 SEBI introduced Black box trading for the first time only for institutional investors.

• Recently SEBI has proposed a framework to allow retail investors to participate in such trading through stock brokers.

• Retail investors will be required to conduct back testing of their algorithms and provide proof of their efficiency.

• Also, algorithms may require certification from the exchanges to ensure they adhere to market standards.

Hence statement 2 is incorrect

Solution: A

• It combines computer programming and financial markets to execute trade at precise moments.

• It eliminates human intervention and emotions allowing trade based on mathematical models, historical data and market conditions.

• It follows pre-coded algorithms to identify trading opportunities and execute orders.

• It uses technical indicators, price movements, volume and other data to determine trade entry and exit points.

Hence statement 1 is correct

• In 2008 SEBI introduced Black box trading for the first time only for institutional investors.

• Recently SEBI has proposed a framework to allow retail investors to participate in such trading through stock brokers.

• Retail investors will be required to conduct back testing of their algorithms and provide proof of their efficiency.

• Also, algorithms may require certification from the exchanges to ensure they adhere to market standards.

Hence statement 2 is incorrect

• Question 18 of 30 18. Question 1 points Consider the following statements : Statement – I : Devaluation of domestic currency triggers inflation in the economy. Statement – II : By Devaluation, an Economy promotes exports over imports. Which of the following is correct in respect of the above statements ? (a) Both Statement -I and Statement -II are correct and Statement -II explains Statement -I (b) Both Statement -I and Statement -II are correct but Statement -II does not explain Statement -I (c) Statement- I is correct but Statement -II is incorrect (d) Statement- I is incorrect but Statement -II is correct Correct Solution : A Devaluation in foreign exchange market refers to the situation when exchange rate of a domestic currency is cut down by the government deliberately against any foreign currency. By Devaluing its currency, a country makes its money cheaper and this promotes exports rendering more competition in the Global market. Conversely, foreign products become more expensive so the demand for imports fall. Governments use devaluation to combat a trade balance and have exports exceed imports. Increasing the price of import protects domestic Industries, but they may become less efficient without the pressure of competition. Higher exports relative to imports can also increase aggregate demand which leads to inflation. Devaluation increases the price of imported goods in the domestic economy, there by fuelling inflation. This in turn increases the cost in the domestic economy including demands for wage increases, all of which eventually go into exported goods. Hence statements 1 and 2 are correct and statement 2 correctly explains statement 1 Incorrect Solution : A Devaluation in foreign exchange market refers to the situation when exchange rate of a domestic currency is cut down by the government deliberately against any foreign currency. By Devaluing its currency, a country makes its money cheaper and this promotes exports rendering more competition in the Global market. Conversely, foreign products become more expensive so the demand for imports fall. Governments use devaluation to combat a trade balance and have exports exceed imports. Increasing the price of import protects domestic Industries, but they may become less efficient without the pressure of competition. Higher exports relative to imports can also increase aggregate demand which leads to inflation. Devaluation increases the price of imported goods in the domestic economy, there by fuelling inflation. This in turn increases the cost in the domestic economy including demands for wage increases, all of which eventually go into exported goods. Hence statements 1 and 2 are correct and statement 2 correctly explains statement 1

#### 18. Question

Consider the following statements :

Statement – I :

Devaluation of domestic currency triggers inflation in the economy.

Statement – II :

By Devaluation, an Economy promotes exports over imports.

Which of the following is correct in respect of the above statements ?

• (a) Both Statement -I and Statement -II are correct and Statement -II explains Statement -I

• (b) Both Statement -I and Statement -II are correct but Statement -II does not explain Statement -I

• (c) Statement- I is correct but Statement -II is incorrect

• (d) Statement- I is incorrect but Statement -II is correct

Solution : A

• Devaluation in foreign exchange market refers to the situation when exchange rate of a domestic currency is cut down by the government deliberately against any foreign currency.

• By Devaluing its currency, a country makes its money cheaper and this promotes exports rendering more competition in the Global market.

• Conversely, foreign products become more expensive so the demand for imports fall.

• Governments use devaluation to combat a trade balance and have exports exceed imports.

• Increasing the price of import protects domestic Industries, but they may become less efficient without the pressure of competition.

• Higher exports relative to imports can also increase aggregate demand which leads to inflation.

• Devaluation increases the price of imported goods in the domestic economy, there by fuelling inflation.

• This in turn increases the cost in the domestic economy including demands for wage increases, all of which eventually go into exported goods.

Hence statements 1 and 2 are correct and statement 2 correctly explains statement 1