DAY – 5 : Insta 75 Days Revision Plan-2025 : ECONOMY

Read about Insights IAS INSTA 75 Days Revision Plan for UPSC Civil Services Prelims – 2025 [ HERE ] :

DOWNLOAD THE INSTA 75 DAYS REVISION TIMETABLE(GS) [HERE] :

DOWNLOAD THE INSTA 75 DAYS REVISION TIMETABLE(CSAT) [HERE] :

Download MITRA booklet (My Insta Tests Revision and Assessment) – It’s for to track your daily progress while following Insta 75 Days plan. [ CLICK HERE ] :

#### Quiz-summary

0 of 30 questions completed

Questions:

#### Information

Wish you Good Luck! 🙂

You have already completed the quiz before. Hence you can not start it again.

Quiz is loading...

You must sign in or sign up to start the quiz.

You have to finish following quiz, to start this quiz:

0 of 30 questions answered correctly

Your time:

Time has elapsed

You have reached 0 of 0 points, (0)

Average score |

Your score |

#### Categories

• Not categorized 0%

Pos. | Name | Entered on | Points | Result

Table is loading

No data available

| | | |

• Question 1 of 30 1. Question 1 points Consider the following: Leverage ratio Net stable funding ratio Market capitalization Liquidity coverage ratio Credit-to-GDP gap Deposit insurance coverage Operational risk capital Under Basel III regulatory framework, the Basel Committee on Banking Supervision does *NOT include how many of the above as primary regulatory standards? a) Only one b) Only two c) Only three d) Only four Correct Solution: C The Basel III regulatory framework, developed by the Basel Committee on Banking Supervision (BCBS), aims to strengthen regulation, supervision, and risk management within the banking sector. Introduced in response to the 2007-2008 financial crisis, Basel III enhances the resilience of banks by setting comprehensive standards for capital adequacy, leverage, and liquidity. Leverage Ratio This is a primary component of Basel III. It serves as a non-risk-based measure to supplement the risk-based capital requirements. The leverage ratio is calculated by dividing Tier 1 capital by the bank’s total leverage exposure and aims to limit excessive leverage in the banking system. It is specifically mentioned as one of the three main pillars of Basel III. Net Stable Funding Ratio (NSFR) This is a primary component of Basel III. The NSFR requires banks to maintain a stable funding profile in relation to their assets and off-balance sheet activities. It is defined as the ratio of available stable funding to required stable funding over a one-year horizon. The NSFR was introduced as part of the liquidity requirements pillar. Market Capitalization This is NOT included as a primary regulatory standard under Basel III. Basel III focuses on capital adequacy, leverage, and liquidity measures rather than market valuation metrics. Liquidity Coverage Ratio (LCR) This is a primary component of Basel III. The LCR requires banks to hold sufficient high-quality liquid assets to cover total net cash outflows over a 30-day stress period. It was introduced alongside the NSFR as part of Basel III’s liquidity requirements to ensure that banks maintain adequate liquidity buffers. Credit-to-GDP Gap This is NOT included as a primary regulatory standard under Basel III. Deposit Insurance Coverage This is NOT included as a primary regulatory standard under Basel III. Deposit insurance is typically a separate regulatory mechanism operated at the national level. Operational Risk Capital This is a component of Basel III. Basel III includes requirements for operational risk capital, with specific methods for calculating capital charges for operational risk. The framework provides options for computing capital requirements for operational risk Incorrect Solution: C The Basel III regulatory framework, developed by the Basel Committee on Banking Supervision (BCBS), aims to strengthen regulation, supervision, and risk management within the banking sector. Introduced in response to the 2007-2008 financial crisis, Basel III enhances the resilience of banks by setting comprehensive standards for capital adequacy, leverage, and liquidity. Leverage Ratio This is a primary component of Basel III. It serves as a non-risk-based measure to supplement the risk-based capital requirements. The leverage ratio is calculated by dividing Tier 1 capital by the bank’s total leverage exposure and aims to limit excessive leverage in the banking system. It is specifically mentioned as one of the three main pillars of Basel III. Net Stable Funding Ratio (NSFR) This is a primary component of Basel III. The NSFR requires banks to maintain a stable funding profile in relation to their assets and off-balance sheet activities. It is defined as the ratio of available stable funding to required stable funding over a one-year horizon. The NSFR was introduced as part of the liquidity requirements pillar. Market Capitalization This is NOT included as a primary regulatory standard under Basel III. Basel III focuses on capital adequacy, leverage, and liquidity measures rather than market valuation metrics. Liquidity Coverage Ratio (LCR) This is a primary component of Basel III. The LCR requires banks to hold sufficient high-quality liquid assets to cover total net cash outflows over a 30-day stress period. It was introduced alongside the NSFR as part of Basel III’s liquidity requirements to ensure that banks maintain adequate liquidity buffers. Credit-to-GDP Gap This is NOT included as a primary regulatory standard under Basel III. Deposit Insurance Coverage This is NOT included as a primary regulatory standard under Basel III. Deposit insurance is typically a separate regulatory mechanism operated at the national level. Operational Risk Capital This is a component of Basel III. Basel III includes requirements for operational risk capital, with specific methods for calculating capital charges for operational risk*. The framework provides options for computing capital requirements for operational risk

#### 1. Question

Consider the following:

• Leverage ratio

• Net stable funding ratio

• Market capitalization

• Liquidity coverage ratio

• Credit-to-GDP gap

• Deposit insurance coverage

• Operational risk capital

Under Basel III regulatory framework, the Basel Committee on Banking Supervision does *NOT *include how many of the above as primary regulatory standards?

• a) Only one

• b) Only two

• c) Only three

• d) Only four

Solution: C

The Basel III regulatory framework, developed by the Basel Committee on Banking Supervision (BCBS), aims to strengthen regulation, supervision, and risk management within the banking sector. Introduced in response to the 2007-2008 financial crisis, Basel III enhances the resilience of banks by setting comprehensive standards for capital adequacy, leverage, and liquidity.

• Leverage Ratio

This is a primary component of Basel III. It serves as a non-risk-based measure to supplement the risk-based capital requirements. The leverage ratio is calculated by dividing Tier 1 capital by the bank’s total leverage exposure and aims to limit excessive leverage in the banking system. It is specifically mentioned as one of the three main pillars of Basel III.

• Net Stable Funding Ratio (NSFR)

This is a primary component of Basel III. The NSFR requires banks to maintain a stable funding profile in relation to their assets and off-balance sheet activities. It is defined as the ratio of available stable funding to required stable funding over a one-year horizon. The NSFR was introduced as part of the liquidity requirements pillar.

• Market Capitalization

This is NOT included as a primary regulatory standard under Basel III. Basel III focuses on capital adequacy, leverage, and liquidity measures rather than market valuation metrics.

• Liquidity Coverage Ratio (LCR)

This is a primary component of Basel III. The LCR requires banks to hold sufficient high-quality liquid assets to cover total net cash outflows over a 30-day stress period. It was introduced alongside the NSFR as part of Basel III’s liquidity requirements to ensure that banks maintain adequate liquidity buffers.

• Credit-to-GDP Gap

This is *NOT* included as a primary regulatory standard under Basel III.

• Deposit Insurance Coverage

This is *NOT* included as a primary regulatory standard under Basel III. Deposit insurance is typically a separate regulatory mechanism operated at the national level.

• Operational Risk Capital

This is a component of Basel III. Basel III includes requirements for operational risk capital, with specific methods for calculating capital charges for operational risk. The framework provides options for computing capital requirements for operational risk

Solution: C

• Leverage Ratio

• Net Stable Funding Ratio (NSFR)

• Market Capitalization

This is NOT included as a primary regulatory standard under Basel III. Basel III focuses on capital adequacy, leverage, and liquidity measures rather than market valuation metrics.

• Liquidity Coverage Ratio (LCR)

• Credit-to-GDP Gap

This is *NOT* included as a primary regulatory standard under Basel III.

• Deposit Insurance Coverage

This is *NOT* included as a primary regulatory standard under Basel III. Deposit insurance is typically a separate regulatory mechanism operated at the national level.

• Operational Risk Capital

• Question 2 of 30 2. Question 1 points Which of the following statements accurately describes the relationship between currency values and economic indicators? Increasing demand for a country’s goods tends to increase demand for its currency. A strengthening currency generally makes a country’s exports more competitive. Changes in currency exchange rates can significantly impact a country’s GDP. Select the correct answer using the code given below: a) 1 and 3 only b) 2 only c) 1 and 2 only d) 1, 2 and 3 Correct Solution: A Understanding the relationship between currency values and economic indicators is essential in international economics. When a country’s goods and services are in higher demand internationally, foreign buyers need to exchange their currencies for the exporting country’s currency to complete transactions. This increased demand for the currency can lead to its appreciation. This relationship aligns with the basic principles of supply and demand in foreign exchange markets. Hence statement 1 is correct A stronger (appreciating) currency makes a country’s exports more expensive for foreign buyers, potentially reducing demand for these exports. Consequently, exports may become less competitive in international markets. Conversely, a weaker (depreciating) currency can make exports cheaper and more competitive abroad. Hence statement 2 is incorrect. Exchange rate fluctuations influence the relative prices of imports and exports, affecting trade balances. A depreciated currency can boost exports by making them cheaper internationally, potentially increasing GDP. Conversely, an appreciated currency can reduce export competitiveness, potentially decreasing GDP. These dynamics are central to models like the Mundell–Fleming model, which analyzes the interplay between exchange rates and economic output. Hence statement 3 is correct Incorrect Solution: A Understanding the relationship between currency values and economic indicators is essential in international economics. When a country’s goods and services are in higher demand internationally, foreign buyers need to exchange their currencies for the exporting country’s currency to complete transactions. This increased demand for the currency can lead to its appreciation. This relationship aligns with the basic principles of supply and demand in foreign exchange markets. Hence statement 1 is correct A stronger (appreciating) currency makes a country’s exports more expensive for foreign buyers, potentially reducing demand for these exports. Consequently, exports may become less competitive in international markets. Conversely, a weaker (depreciating) currency can make exports cheaper and more competitive abroad. Hence statement 2 is incorrect. Exchange rate fluctuations influence the relative prices of imports and exports, affecting trade balances. A depreciated currency can boost exports by making them cheaper internationally, potentially increasing GDP. Conversely, an appreciated currency can reduce export competitiveness, potentially decreasing GDP. These dynamics are central to models like the Mundell–Fleming model, which analyzes the interplay between exchange rates and economic output. Hence statement 3 is correct

#### 2. Question

Which of the following statements accurately describes the relationship between currency values and economic indicators?

• Increasing demand for a country’s goods tends to increase demand for its currency.

• A strengthening currency generally makes a country’s exports more competitive.

• Changes in currency exchange rates can significantly impact a country’s GDP.

Select the correct answer using the code given below:

• a) 1 and 3 only

• c) 1 and 2 only

• d) 1, 2 and 3

Solution: A

Understanding the relationship between currency values and economic indicators is essential in international economics.

When a country’s goods and services are in higher demand internationally, foreign buyers need to exchange their currencies for the exporting country’s currency to complete transactions. This increased demand for the currency can lead to its appreciation. This relationship aligns with the basic principles of supply and demand in foreign exchange markets.

Hence statement 1 is correct

A stronger (appreciating) currency makes a country’s exports more expensive for foreign buyers, potentially reducing demand for these exports. Consequently, exports may become less competitive in international markets. Conversely, a weaker (depreciating) currency can make exports cheaper and more competitive abroad.

Hence statement 2 is incorrect.

Exchange rate fluctuations influence the relative prices of imports and exports, affecting trade balances. A depreciated currency can boost exports by making them cheaper internationally, potentially increasing GDP. Conversely, an appreciated currency can reduce export competitiveness, potentially decreasing GDP. These dynamics are central to models like the Mundell–Fleming model, which analyzes the interplay between exchange rates and economic output.

Hence statement 3 is correct

Solution: A

Understanding the relationship between currency values and economic indicators is essential in international economics.

Hence statement 1 is correct

Hence statement 2 is incorrect.

Hence statement 3 is correct

• Question 3 of 30 3. Question 1 points With reference to the Financial Stability Board (FSB), consider the following statements: It was established after the 2008 financial crisis to coordinate financial regulation among G20 countries. From India, both the Reserve Bank of India and the Ministry of Finance are members of the FSB. 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: C The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established in April 2009 as the successor to the Financial Stability Forum (FSF), with an expanded mandate to promote financial stability. In response to the 2008 financial crisis, the G20 nations recognized the need for a more robust mechanism to oversee and coordinate international financial regulation. Consequently, at the G20 summit in April 2009, the Financial Stability Board was established as the successor to the Financial Stability Forum, with an expanded membership and a strengthened mandate to promote financial stability. Hence statement 1 is correct The FSB includes representatives from major economies, and India’s representation comprises both the Reserve Bank of India (RBI) and the Ministry of Finance. This dual representation ensures that both monetary and fiscal perspectives are considered in discussions pertaining to global financial stability. Hence statement 2 is correct Incorrect Solution: C The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established in April 2009 as the successor to the Financial Stability Forum (FSF), with an expanded mandate to promote financial stability. In response to the 2008 financial crisis, the G20 nations recognized the need for a more robust mechanism to oversee and coordinate international financial regulation. Consequently, at the G20 summit in April 2009, the Financial Stability Board was established as the successor to the Financial Stability Forum, with an expanded membership and a strengthened mandate to promote financial stability. Hence statement 1 is correct The FSB includes representatives from major economies, and India’s representation comprises both the Reserve Bank of India (RBI) and the Ministry of Finance. This dual representation ensures that both monetary and fiscal perspectives are considered in discussions pertaining to global financial stability. Hence statement 2 is correct

#### 3. Question

With reference to the Financial Stability Board (FSB), consider the following statements:

• It was established after the 2008 financial crisis to coordinate financial regulation among G20 countries.

• From India, both the Reserve Bank of India and the Ministry of Finance are members of the FSB.

Which of the statements given above is/are correct?

• c) Both 1 and 2

• d) Neither 1 nor 2

Solution: C

The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established in April 2009 as the successor to the Financial Stability Forum (FSF), with an expanded mandate to promote financial stability.

In response to the 2008 financial crisis, the G20 nations recognized the need for a more robust mechanism to oversee and coordinate international financial regulation. Consequently, at the G20 summit in April 2009, the Financial Stability Board was established as the successor to the Financial Stability Forum, with an expanded membership and a strengthened mandate to promote financial stability.

Hence statement 1 is correct

The FSB includes representatives from major economies, and India’s representation comprises both the Reserve Bank of India (RBI) and the Ministry of Finance. This dual representation ensures that both monetary and fiscal perspectives are considered in discussions pertaining to global financial stability.

Hence statement 2 is correct

Solution: C

Hence statement 1 is correct

Hence statement 2 is correct

• Question 4 of 30 4. Question 1 points With reference to the trademarks, consider the following: Unique signature of the person Shape of goods or their packaging Marks constituting only a two-dimensional sign How many of the above are eligible for registration as a trademark in India? (a) Only one (b) Only two (c) Only three (d) None of the above Correct Solution B Trademark is a visual symbol which may be a word signature, name, device, label, numerals or combination of colours used by one undertaking on goods or services or other articles of commerce to distinguish it from other similar goods or services originating from a different undertaking. Different types of trademarks that may be registered in India: Any name (including personal or surname of the applicant or predecessor in business or the signature of the person), which is not unusual for trade to adopt as a mark. Hence Statement 1 is correct. An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/service. Letters or numerals or any combination thereof. The right to proprietorship of a trademark may be acquired by either registration under the Act or by use in relation to particular goods or service. Devices, including fancy devices or symbols Monograms Combination of colours or even a single colour in combination with a word or device Shape of goods or their packaging. Hence Statement 2 is correct. Marks constituting a 3- dimensional sign. Hence Statement 3 is incorrect. Sound marks when represented in conventional notation or described in words by being graphically represented. The Controller General of Patents, Designs and Trade Marks heads the TRADE MARKS Registry offices and functions as the Registrar of TRADE MARKS. Incorrect Solution B Trademark is a visual symbol which may be a word signature, name, device, label, numerals or combination of colours used by one undertaking on goods or services or other articles of commerce to distinguish it from other similar goods or services originating from a different undertaking. Different types of trademarks that may be registered in India: Any name (including personal or surname of the applicant or predecessor in business or the signature of the person), which is not unusual for trade to adopt as a mark. Hence Statement 1 is correct. An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/service. Letters or numerals or any combination thereof. The right to proprietorship of a trademark may be acquired by either registration under the Act or by use in relation to particular goods or service. Devices, including fancy devices or symbols Monograms Combination of colours or even a single colour in combination with a word or device Shape of goods or their packaging. Hence Statement 2 is correct. Marks constituting a 3- dimensional sign. Hence Statement 3 is incorrect. Sound marks when represented in conventional notation or described in words by being graphically represented. The Controller General of Patents, Designs and Trade Marks heads the TRADE MARKS Registry offices and functions as the Registrar of TRADE MARKS.

#### 4. Question

With reference to the trademarks, consider the following:

• Unique signature of the person

• Shape of goods or their packaging

• Marks constituting only a two-dimensional sign

How many of the above are eligible for registration as a trademark in India?

• (a) Only one

• (b) Only two

• (c) Only three

• (d) None of the above

Solution B

Trademark is a visual symbol which may be a word signature, name, device, label, numerals or combination of colours used by one undertaking on goods or services or other articles of commerce to distinguish it from other similar goods or services originating from a different undertaking.

Different types of trademarks that may be registered in India:

• Any name (including personal or surname of the applicant or predecessor in business or the signature of the person), which is not unusual for trade to adopt as a mark. Hence Statement 1 is correct.

• An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/service.

• Letters or numerals or any combination thereof.

• The right to proprietorship of a trademark may be acquired by either registration under the Act or by use in relation to particular goods or service.

• Devices, including fancy devices or symbols

• Combination of colours or even a single colour in combination with a word or device

• Shape of goods or their packaging. Hence Statement 2 is correct.

• Marks constituting a 3- dimensional sign. Hence Statement 3 is incorrect.

• Sound marks when represented in conventional notation or described in words by being graphically represented.

The Controller General of Patents, Designs and Trade Marks heads the TRADE MARKS Registry offices and functions as the Registrar of TRADE MARKS.

Solution B

Different types of trademarks that may be registered in India:

• An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/service.

• Letters or numerals or any combination thereof.

• The right to proprietorship of a trademark may be acquired by either registration under the Act or by use in relation to particular goods or service.

• Devices, including fancy devices or symbols

• Combination of colours or even a single colour in combination with a word or device

• Shape of goods or their packaging. Hence Statement 2 is correct.

• Marks constituting a 3- dimensional sign. Hence Statement 3 is incorrect.

• Sound marks when represented in conventional notation or described in words by being graphically represented.

The Controller General of Patents, Designs and Trade Marks heads the TRADE MARKS Registry offices and functions as the Registrar of TRADE MARKS.

• Question 5 of 30 5. Question 1 points In the context of economic systems, which of the following best explains the concept of “Embedded Liberalism”? (a) A system where market forces operate within strong regulatory frameworks to ensure social welfare (b) An economy characterized by close integration of political and corporate interests (c) An economic model emphasizing complete state control over production and distribution (d) A theory proposing minimal government intervention in free markets Correct Solution: A Embedded liberalism refers to the post-World War II global economic system that sought to combine the benefits of free trade with the ability of states to provide welfare and regulate their economies to reduce unemployment. This system aimed to integrate market forces within a framework that allowed national governments the autonomy to pursue interventionist and welfare-based domestic policies. Hence, option (a) is correct. Incorrect Solution: A Embedded liberalism refers to the post-World War II global economic system that sought to combine the benefits of free trade with the ability of states to provide welfare and regulate their economies to reduce unemployment. This system aimed to integrate market forces within a framework that allowed national governments the autonomy to pursue interventionist and welfare-based domestic policies. Hence, option (a) is correct.

#### 5. Question

In the context of economic systems, which of the following best explains the concept of “Embedded Liberalism”?

• (a) A system where market forces operate within strong regulatory frameworks to ensure social welfare

• (b) An economy characterized by close integration of political and corporate interests

• (c) An economic model emphasizing complete state control over production and distribution

• (d) A theory proposing minimal government intervention in free markets

Solution: A

Embedded liberalism refers to the post-World War II global economic system that sought to combine the benefits of free trade with the ability of states to provide welfare and regulate their economies to reduce unemployment. This system aimed to integrate market forces within a framework that allowed national governments the autonomy to pursue interventionist and welfare-based domestic policies.

Hence, option (a) is correct.

Solution: A

Hence, option (a) is correct.

• Question 6 of 30 6. Question 1 points Which of the following factors are most likely to contribute to demand-pull inflation in an economy? Increased consumer confidence leading to higher spending Reduction in income tax rates across all brackets Sharp increase in government infrastructure spending Expansion of credit availability through lower interest rates Select the correct answer using the code given below: (a) 1 and 3 only (b) 2 and 4 only (c) 1, 2 and 3 only (d) 1, 2, 3 and 4 Correct Solution: D All statements given above are correct. Demand-pull inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to a general rise in price levels. This phenomenon is often summarized as “too much money chasing too few goods.” Key factors contributing to demand-pull inflation include increased consumer spending, expansionary fiscal policies, and enhanced credit availability. When consumers feel optimistic about their financial future, they are more likely to increase their spending on goods and services. This surge in consumption elevates aggregate demand, potentially leading to demand-pull inflation. Lower income tax rates boost individuals’ disposable income, encouraging higher consumer spending. This increase in consumption can drive up aggregate demand, contributing to demand-pull inflation. Significant government expenditure on infrastructure projects injects substantial funds into the economy, stimulating demand for materials, labour, and related services. This heightened demand can lead to demand-pull inflation. Reducing interest rates makes borrowing more affordable for consumers and businesses, leading to increased spending and investment. This escalation in aggregate demand can result in demand-pull inflation. Incorrect Solution: D All statements given above are correct. Demand-pull inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to a general rise in price levels. This phenomenon is often summarized as “too much money chasing too few goods.” Key factors contributing to demand-pull inflation include increased consumer spending, expansionary fiscal policies, and enhanced credit availability. When consumers feel optimistic about their financial future, they are more likely to increase their spending on goods and services. This surge in consumption elevates aggregate demand, potentially leading to demand-pull inflation. Lower income tax rates boost individuals’ disposable income, encouraging higher consumer spending. This increase in consumption can drive up aggregate demand, contributing to demand-pull inflation. Significant government expenditure on infrastructure projects injects substantial funds into the economy, stimulating demand for materials, labour, and related services. This heightened demand can lead to demand-pull inflation. Reducing interest rates makes borrowing more affordable for consumers and businesses, leading to increased spending and investment. This escalation in aggregate demand can result in demand-pull inflation.

#### 6. Question

Which of the following factors are most likely to contribute to demand-pull inflation in an economy?

• Increased consumer confidence leading to higher spending

• Reduction in income tax rates across all brackets

• Sharp increase in government infrastructure spending

• Expansion of credit availability through lower interest rates

Select the correct answer using the code given below:

• (a) 1 and 3 only

• (b) 2 and 4 only

• (c) 1, 2 and 3 only

• (d) 1, 2, 3 and 4

Solution: D

All statements given above are correct.

Demand-pull inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to a general rise in price levels. This phenomenon is often summarized as “too much money chasing too few goods.” Key factors contributing to demand-pull inflation include increased consumer spending, expansionary fiscal policies, and enhanced credit availability.

• When consumers feel optimistic about their financial future, they are more likely to increase their spending on goods and services. This surge in consumption elevates aggregate demand, potentially leading to demand-pull inflation.

• Lower income tax rates boost individuals’ disposable income, encouraging higher consumer spending. This increase in consumption can drive up aggregate demand, contributing to demand-pull inflation.

• Significant government expenditure on infrastructure projects injects substantial funds into the economy, stimulating demand for materials, labour, and related services. This heightened demand can lead to demand-pull inflation.

• Reducing interest rates makes borrowing more affordable for consumers and businesses, leading to increased spending and investment. This escalation in aggregate demand can result in demand-pull inflation.

Solution: D

All statements given above are correct.

• Question 7 of 30 7. Question 1 points Which one of the following statements best describes a key constitutional aspect of cess and surcharge in India? (a) Both cess and surcharge are discussed under Article 270 of the Constitution. (b) States receive a fixed percentage of proceeds from both cess and surcharge. (c) Cess can be levied only for temporary purposes, while surcharge can be permanent. (d) Unlike surcharge, funds collected from cess must be allocated separately and used only for its specific purpose Correct Solution: D In India’s taxation system, cess and surcharge represent two distinct types of taxes imposed by the Central Government, each with specific constitutional provisions governing their collection and utilization. Cess and surcharge are levied by the Central Government under different constitutional articles. Surcharge is primarily governed by Article 271 of the Constitution, which allows Parliament to increase taxes through additional surcharges. Meanwhile, cess is mentioned in Article 270(1) as one of the exceptions to taxes that must be shared with states Unlike surcharge, funds collected from cess must be allocated separately and used only for its specific purpose Hence, option (d) is correct. Incorrect Solution: D In India’s taxation system, cess and surcharge represent two distinct types of taxes imposed by the Central Government, each with specific constitutional provisions governing their collection and utilization. Cess and surcharge are levied by the Central Government under different constitutional articles. Surcharge is primarily governed by Article 271 of the Constitution, which allows Parliament to increase taxes through additional surcharges. Meanwhile, cess is mentioned in Article 270(1) as one of the exceptions to taxes that must be shared with states Unlike surcharge, funds collected from cess must be allocated separately and used only for its specific purpose Hence, option (d) is correct.

#### 7. Question

Which one of the following statements best describes a key constitutional aspect of cess and surcharge in India?

• (a) Both cess and surcharge are discussed under Article 270 of the Constitution.

• (b) States receive a fixed percentage of proceeds from both cess and surcharge.

• (c) Cess can be levied only for temporary purposes, while surcharge can be permanent.

• (d) Unlike surcharge, funds collected from cess must be allocated separately and used only for its specific purpose

Solution: D

In India’s taxation system, cess and surcharge represent two distinct types of taxes imposed by the Central Government, each with specific constitutional provisions governing their collection and utilization.

Cess and surcharge are levied by the Central Government under different constitutional articles. Surcharge is primarily governed by Article 271 of the Constitution, which allows Parliament to increase taxes through additional surcharges. Meanwhile, cess is mentioned in Article 270(1) as one of the exceptions to taxes that must be shared with states

Unlike surcharge, funds collected from cess must be allocated separately and used only for its specific purpose

Hence, option (d) is correct.

Solution: D

Unlike surcharge, funds collected from cess must be allocated separately and used only for its specific purpose

Hence, option (d) is correct.

• Question 8 of 30 8. Question 1 points Regarding the composition of India’s foreign exchange reserves, as maintained by the Reserve Bank of India (RBI), consider the following elements: Foreign Currency Assets (FCAs) Gold Holdings Special Drawing Rights (SDRs) allocation by the IMF Reserve Position in the IMF Government Securities denominated in foreign currencies How many of the above elements are identified as components of India’s foreign exchange reserves? (a) Only Two (b) Only Three (c) Only four (d) All five Correct Solution: C India’s foreign exchange reserves are assets held by the Reserve Bank of India (RBI) to back liabilities and influence monetary policy. These reserves provide a cushion against economic shocks and ensure the country can meet its international financial obligations. Foreign Currency Assets (FCA): These are the largest component and include investments in foreign currencies like the U.S. dollar, euro, pound sterling, and yen. FCA comprises: Deposits with foreign central and commercial banks. Holdings of foreign government and corporate bonds. Other financial instruments denominated in foreign currencies. Gold Holdings: The RBI maintains gold reserves as part of its forex reserves. Special Drawing Rights (SDRs): SDRs are international reserve assets allocated by the International Monetary Fund (IMF) to its member countries. They can be exchanged among governments for freely usable currencies in times of need. Reserve Position in the IMF: This represents India’s quota contribution to the IMF, which can be utilized for drawing financial assistance from the IMF Hence, statement 1, statement 2 and statement 3 are correct. Government securities denominated in foreign currencies are not part of India’s foreign exchange reserves Hence, statement 4 is incorrect. Incorrect Solution: C India’s foreign exchange reserves are assets held by the Reserve Bank of India (RBI) to back liabilities and influence monetary policy. These reserves provide a cushion against economic shocks and ensure the country can meet its international financial obligations. Foreign Currency Assets (FCA): These are the largest component and include investments in foreign currencies like the U.S. dollar, euro, pound sterling, and yen. FCA comprises: Deposits with foreign central and commercial banks. Holdings of foreign government and corporate bonds. Other financial instruments denominated in foreign currencies. Gold Holdings: The RBI maintains gold reserves as part of its forex reserves. Special Drawing Rights (SDRs): SDRs are international reserve assets allocated by the International Monetary Fund (IMF) to its member countries. They can be exchanged among governments for freely usable currencies in times of need. Reserve Position in the IMF: This represents India’s quota contribution to the IMF, which can be utilized for drawing financial assistance from the IMF Hence, statement 1, statement 2 and statement 3 are correct. Government securities denominated in foreign currencies are not part of India’s foreign exchange reserves Hence, statement 4 is incorrect.

#### 8. Question

Regarding the composition of India’s foreign exchange reserves, as maintained by the Reserve Bank of India (RBI), consider the following elements:

• Foreign Currency Assets (FCAs)

• Gold Holdings

• Special Drawing Rights (SDRs) allocation by the IMF

• Reserve Position in the IMF

• Government Securities denominated in foreign currencies

How many of the above elements are identified as components of India’s foreign exchange reserves?

• (a) Only Two

• (b) Only Three

• (c) Only four

• (d) All five

Solution: C

India’s foreign exchange reserves are assets held by the Reserve Bank of India (RBI) to back liabilities and influence monetary policy. These reserves provide a cushion against economic shocks and ensure the country can meet its international financial obligations.

Foreign Currency Assets (FCA): These are the largest component and include investments in foreign currencies like the U.S. dollar, euro, pound sterling, and yen. FCA comprises:

• Deposits with foreign central and commercial banks.

• Holdings of foreign government and corporate bonds.

• Other financial instruments denominated in foreign currencies.

Gold Holdings: The RBI maintains gold reserves as part of its forex reserves.

Special Drawing Rights (SDRs): SDRs are international reserve assets allocated by the International Monetary Fund (IMF) to its member countries. They can be exchanged among governments for freely usable currencies in times of need.

Reserve Position in the IMF: This represents India’s quota contribution to the IMF, which can be utilized for drawing financial assistance from the IMF

Hence, statement 1, statement 2 and statement 3 are correct.

Government securities denominated in foreign currencies are not part of India’s foreign exchange reserves

Hence, statement 4 is incorrect.

Solution: C

Foreign Currency Assets (FCA): These are the largest component and include investments in foreign currencies like the U.S. dollar, euro, pound sterling, and yen. FCA comprises:

• Deposits with foreign central and commercial banks.

• Holdings of foreign government and corporate bonds.

• Other financial instruments denominated in foreign currencies.

Gold Holdings: The RBI maintains gold reserves as part of its forex reserves.

Reserve Position in the IMF: This represents India’s quota contribution to the IMF, which can be utilized for drawing financial assistance from the IMF

Hence, statement 1, statement 2 and statement 3 are correct.

Government securities denominated in foreign currencies are not part of India’s foreign exchange reserves

Hence, statement 4 is incorrect.

• Question 9 of 30 9. Question 1 points The Reserve Bank of India’s “SCALE” framework is designed to: (a) Measure the systemic resilience of the banking sector (b) Regulate digital lending platforms and loan aggregators (c) Monitor non-performing assets of scheduled commercial banks (d) Assess climate-related financial risks in the banking system Correct Solution: A The Reserve Bank of India (RBI) introduced the Scale-Based Regulation (SBR) framework as a comprehensive approach to regulate Non-Banking Financial Companies (NBFCs) based on their size, activities, and potential systemic impact. This framework represents a significant shift in how NBFCs are regulated in India’s financial ecosystem. The RBI published the Scale-Based Regulation framework on October 22, 2021, and it came into effect on October 1, 2022. The framework was developed in response to the growing significance of NBFCs in India’s financial system and the contagion risks they posed following the credit default crisis of 2018. As NBFCs grew substantially in size and complexity, becoming systemically significant, there was a need to align regulations with their changing risk profiles. Base Layer (NBFC-BL): Includes non-deposit-taking NBFCs with an asset size below ₹1,000 crore and specific types such as Peer-to-Peer (P2P) lending platforms and Account Aggregators. Middle Layer (NBFC-ML): Comprises all deposit-taking NBFCs, regardless of size, and non-deposit-taking NBFCs with assets of ₹1,000 crore and above, including entities like Housing Finance Companies (HFCs) and Infrastructure Finance Companies (IFCs). Upper Layer (NBFC-UL): Consists of NBFCs identified by the RBI as systemically significant based on a set of parameters, including the top 10 NBFCs by asset size. Top Layer (NBFC-TL): Ideally remains empty but can include NBFCs if the RBI perceives a substantial increase in systemic risk from specific entities. Hence, option (a) is correct. Incorrect Solution: A The Reserve Bank of India (RBI) introduced the Scale-Based Regulation (SBR) framework as a comprehensive approach to regulate Non-Banking Financial Companies (NBFCs) based on their size, activities, and potential systemic impact. This framework represents a significant shift in how NBFCs are regulated in India’s financial ecosystem. The RBI published the Scale-Based Regulation framework on October 22, 2021, and it came into effect on October 1, 2022. The framework was developed in response to the growing significance of NBFCs in India’s financial system and the contagion risks they posed following the credit default crisis of 2018. As NBFCs grew substantially in size and complexity, becoming systemically significant, there was a need to align regulations with their changing risk profiles. Base Layer (NBFC-BL): Includes non-deposit-taking NBFCs with an asset size below ₹1,000 crore and specific types such as Peer-to-Peer (P2P) lending platforms and Account Aggregators. Middle Layer (NBFC-ML): Comprises all deposit-taking NBFCs, regardless of size, and non-deposit-taking NBFCs with assets of ₹1,000 crore and above, including entities like Housing Finance Companies (HFCs) and Infrastructure Finance Companies (IFCs). Upper Layer (NBFC-UL): Consists of NBFCs identified by the RBI as systemically significant based on a set of parameters, including the top 10 NBFCs by asset size. Top Layer (NBFC-TL): Ideally remains empty but can include NBFCs if the RBI perceives a substantial increase in systemic risk from specific entities. Hence, option (a) is correct.

#### 9. Question

The Reserve Bank of India’s “SCALE” framework is designed to:

• (a) Measure the systemic resilience of the banking sector

• (b) Regulate digital lending platforms and loan aggregators

• (c) Monitor non-performing assets of scheduled commercial banks

• (d) Assess climate-related financial risks in the banking system

Solution: A

The Reserve Bank of India (RBI) introduced the Scale-Based Regulation (SBR) framework as a comprehensive approach to regulate Non-Banking Financial Companies (NBFCs) based on their size, activities, and potential systemic impact. This framework represents a significant shift in how NBFCs are regulated in India’s financial ecosystem.

The RBI published the Scale-Based Regulation framework on October 22, 2021, and it came into effect on October 1, 2022. The framework was developed in response to the growing significance of NBFCs in India’s financial system and the contagion risks they posed following the credit default crisis of 2018. As NBFCs grew substantially in size and complexity, becoming systemically significant, there was a need to align regulations with their changing risk profiles.

• Base Layer (NBFC-BL): Includes non-deposit-taking NBFCs with an asset size below ₹1,000 crore and specific types such as Peer-to-Peer (P2P) lending platforms and Account Aggregators.

• Middle Layer (NBFC-ML): Comprises all deposit-taking NBFCs, regardless of size, and non-deposit-taking NBFCs with assets of ₹1,000 crore and above, including entities like Housing Finance Companies (HFCs) and Infrastructure Finance Companies (IFCs).

• Upper Layer (NBFC-UL): Consists of NBFCs identified by the RBI as systemically significant based on a set of parameters, including the top 10 NBFCs by asset size.

• Top Layer (NBFC-TL): Ideally remains empty but can include NBFCs if the RBI perceives a substantial increase in systemic risk from specific entities.

Hence, option (a) is correct.

Solution: A

• Base Layer (NBFC-BL): Includes non-deposit-taking NBFCs with an asset size below ₹1,000 crore and specific types such as Peer-to-Peer (P2P) lending platforms and Account Aggregators.

• Upper Layer (NBFC-UL): Consists of NBFCs identified by the RBI as systemically significant based on a set of parameters, including the top 10 NBFCs by asset size.

• Top Layer (NBFC-TL): Ideally remains empty but can include NBFCs if the RBI perceives a substantial increase in systemic risk from specific entities.

Hence, option (a) is correct.

• Question 10 of 30 10. Question 1 points With reference to unemployment in India, consider the following statements: Frictional unemployment is considered beneficial for an economy to some extent. Seasonal unemployment is mainly found in urban areas rather than rural areas. Higher cropping intensity is desirable for reducing unemployment in rural economies. 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 Correct Solution: C Unemployment remains a significant economic challenge in India, with various types affecting different segments of the population. India experiences several forms of unemployment including frictional, seasonal, structural, and disguised unemployment, each with distinct characteristics and economic implications. Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs or entering the workforce. This type of unemployment is natural and indicates a dynamic labor market where workers seek better opportunities, leading to improved job matches and productivity. Therefore, a certain level of frictional unemployment is considered beneficial. Hence statement 1 is correct Seasonal unemployment arises when workers face unemployment during certain seasons due to fluctuations in demand or activities. In India, this is predominantly observed in rural areas, especially in the agricultural sector, where employment depends on sowing and harvesting seasons. Urban areas experience less seasonal unemployment as jobs are less dependent on seasonal factors. Hence statement 2 is incorrect Cropping intensity refers to the number of crops grown on the same land during a year. Higher cropping intensity implies multiple cropping cycles, leading to more continuous employment opportunities for agricultural workers. This reduces seasonal unemployment in rural areas by providing consistent work throughout the year. Hence statement 3 is correct Incorrect Solution: C Unemployment remains a significant economic challenge in India, with various types affecting different segments of the population. India experiences several forms of unemployment including frictional, seasonal, structural, and disguised unemployment, each with distinct characteristics and economic implications. Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs or entering the workforce. This type of unemployment is natural and indicates a dynamic labor market where workers seek better opportunities, leading to improved job matches and productivity. Therefore, a certain level of frictional unemployment is considered beneficial. Hence statement 1 is correct Seasonal unemployment arises when workers face unemployment during certain seasons due to fluctuations in demand or activities. In India, this is predominantly observed in rural areas, especially in the agricultural sector, where employment depends on sowing and harvesting seasons. Urban areas experience less seasonal unemployment as jobs are less dependent on seasonal factors. Hence statement 2 is incorrect Cropping intensity refers to the number of crops grown on the same land during a year. Higher cropping intensity implies multiple cropping cycles, leading to more continuous employment opportunities for agricultural workers. This reduces seasonal unemployment in rural areas by providing consistent work throughout the year. Hence statement 3 is correct

#### 10. Question

With reference to unemployment in India, consider the following statements:

• Frictional unemployment is considered beneficial for an economy to some extent.

• Seasonal unemployment is mainly found in urban areas rather than rural areas.

• Higher cropping intensity is desirable for reducing unemployment in rural economies.

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

Solution: C

Unemployment remains a significant economic challenge in India, with various types affecting different segments of the population. India experiences several forms of unemployment including frictional, seasonal, structural, and disguised unemployment, each with distinct characteristics and economic implications.

Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs or entering the workforce. This type of unemployment is natural and indicates a dynamic labor market where workers seek better opportunities, leading to improved job matches and productivity. Therefore, a certain level of frictional unemployment is considered beneficial.

Hence statement 1 is correct

Seasonal unemployment arises when workers face unemployment during certain seasons due to fluctuations in demand or activities. In India, this is predominantly observed in rural areas, especially in the agricultural sector, where employment depends on sowing and harvesting seasons. Urban areas experience less seasonal unemployment as jobs are less dependent on seasonal factors.

Hence statement 2 is incorrect

Cropping intensity refers to the number of crops grown on the same land during a year. Higher cropping intensity implies multiple cropping cycles, leading to more continuous employment opportunities for agricultural workers. This reduces seasonal unemployment in rural areas by providing consistent work throughout the year.

Hence statement 3 is correct

Solution: C

Hence statement 1 is correct

Hence statement 2 is incorrect

Hence statement 3 is correct

• Question 11 of 30 11. Question 1 points Consider the following statements: Statement – I : Quantitative Easing encourages lending and investment in the economy. Statement – II : Under Quantitative Easing policy, a central bank purchases Securities in the open market. 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 Quantitative Easing or QE refers to injecting money into the economy by purchasing financial assets by the central bank. Under QE policy this Central Bank purchases Government bonds and other financial instruments such as mortgage backed Securities It is one of the tools of monetary policy along with Open market operations, Cash Reserve Ratio Bank Rate, Repo and Reverse Repo rate that a central bank applies to regulate money supply and foster economic growth in the country. It is a types of expansionary monetary policy that encourages borrowing and investment as well as stimulates economic activity. QE creates new Bank reserves, providing banks with more liquidity and encouraging lending and investment. QE is typically implemented when interest rates are near Zero and economic growth is stalled Hence both statements 1 and 2 are correct and statement 2 correctly explains statement 1 Incorrect Solution : A Quantitative Easing or QE refers to injecting money into the economy by purchasing financial assets by the central bank. Under QE policy this Central Bank purchases Government bonds and other financial instruments such as mortgage backed Securities It is one of the tools of monetary policy along with Open market operations, Cash Reserve Ratio Bank Rate, Repo and Reverse Repo rate that a central bank applies to regulate money supply and foster economic growth in the country. It is a types of expansionary monetary policy that encourages borrowing and investment as well as stimulates economic activity. QE creates new Bank reserves, providing banks with more liquidity and encouraging lending and investment. QE is typically implemented when interest rates are near Zero and economic growth is stalled Hence both statements 1 and 2 are correct and statement 2 correctly explains statement 1

#### 11. Question

Consider the following statements:

Statement – I :

Quantitative Easing encourages lending and investment in the economy.

Statement – II :

Under Quantitative Easing policy, a central bank purchases Securities in the open market.

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

• Quantitative Easing or QE refers to injecting money into the economy by purchasing financial assets by the central bank.

• Under QE policy this Central Bank purchases Government bonds and other financial instruments such as mortgage backed Securities

• It is one of the tools of monetary policy along with Open market operations, Cash Reserve Ratio Bank Rate, Repo and Reverse Repo rate that a central bank applies to regulate money supply and foster economic growth in the country.

• It is a types of expansionary monetary policy that encourages borrowing and investment as well as stimulates economic activity.

• QE creates new Bank reserves, providing banks with more liquidity and encouraging lending and investment.

• QE is typically implemented when interest rates are near Zero and economic growth is stalled

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

Solution : A

• Quantitative Easing or QE refers to injecting money into the economy by purchasing financial assets by the central bank.

• Under QE policy this Central Bank purchases Government bonds and other financial instruments such as mortgage backed Securities

• It is a types of expansionary monetary policy that encourages borrowing and investment as well as stimulates economic activity.

• QE creates new Bank reserves, providing banks with more liquidity and encouraging lending and investment.

• QE is typically implemented when interest rates are near Zero and economic growth is stalled

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

• Question 12 of 30 12. Question 1 points Consider the following statements regarding Securities and Exchange Board of India : It is a statutory body to regulate Foreign Institutional Investors. The National Institute of Securities Market works under SEBI. The Securities Appellate Tribunal under SEBI has the same powers as that of a Civil Court. How many of the statements given above is/are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: C SEBI is the regulatory body for security and commodity market in India under the Ministry of Finance. It was established in 1988 as an executive body but was given statutory powers through the SEBI Act 1992. SEBI is the primary regulatory authority governing foreign institutional investors in Indian stock market. It is responsible for regulating and supervising security market in the country SEBI grants registrations to FII investment in stocks and monitoring their activities. Hence statement 1 is correct The National Institute of Securities Market is a public trust established in 2006 by SEBI. The institute carries out a wide range of capacity building activities at various levels with an aim to enhance quality standards in securities market. Hence statement 2 is correct The Securities Appellate Tribunal (SAT) has been constituted by SEBI. It has been established to protect interest of entities that feel aggrieved by SEBI’s decision. SAT consists of a presiding officer and two other members ; it has the same power as vested in a civil court. Hence statement 3 is correct Incorrect Solution: C SEBI is the regulatory body for security and commodity market in India under the Ministry of Finance. It was established in 1988 as an executive body but was given statutory powers through the SEBI Act 1992. SEBI is the primary regulatory authority governing foreign institutional investors in Indian stock market. It is responsible for regulating and supervising security market in the country SEBI grants registrations to FII investment in stocks and monitoring their activities. Hence statement 1 is correct The National Institute of Securities Market is a public trust established in 2006 by SEBI. The institute carries out a wide range of capacity building activities at various levels with an aim to enhance quality standards in securities market. Hence statement 2 is correct The Securities Appellate Tribunal (SAT) has been constituted by SEBI. It has been established to protect interest of entities that feel aggrieved by SEBI’s decision. SAT consists of a presiding officer and two other members ; it has the same power as vested in a civil court. Hence statement 3 is correct

#### 12. Question

Consider the following statements regarding Securities and Exchange Board of India :

• It is a statutory body to regulate Foreign Institutional Investors.

• The National Institute of Securities Market works under SEBI.

• The Securities Appellate Tribunal under SEBI has the same powers as that of a Civil Court.

How many of the statements given above is/are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: C

• SEBI is the regulatory body for security and commodity market in India under the Ministry of Finance.

• It was established in 1988 as an executive body but was given statutory powers through the SEBI Act 1992.

• SEBI is the primary regulatory authority governing foreign institutional investors in Indian stock market.

• It is responsible for regulating and supervising security market in the country

• SEBI grants registrations to FII investment in stocks and monitoring their activities.

Hence statement 1 is correct

• The National Institute of Securities Market is a public trust established in 2006 by SEBI.

• The institute carries out a wide range of capacity building activities at various levels with an aim to enhance quality standards in securities market.

Hence statement 2 is correct

• The Securities Appellate Tribunal (SAT) has been constituted by SEBI.

• It has been established to protect interest of entities that feel aggrieved by SEBI’s decision.

• SAT consists of a presiding officer and two other members ; it has the same power as vested in a civil court.

Hence statement 3 is correct

Solution: C

• SEBI is the regulatory body for security and commodity market in India under the Ministry of Finance.

• It was established in 1988 as an executive body but was given statutory powers through the SEBI Act 1992.

• SEBI is the primary regulatory authority governing foreign institutional investors in Indian stock market.

• It is responsible for regulating and supervising security market in the country

• SEBI grants registrations to FII investment in stocks and monitoring their activities.

Hence statement 1 is correct

• The National Institute of Securities Market is a public trust established in 2006 by SEBI.

• The institute carries out a wide range of capacity building activities at various levels with an aim to enhance quality standards in securities market.

Hence statement 2 is correct

• The Securities Appellate Tribunal (SAT) has been constituted by SEBI.

• It has been established to protect interest of entities that feel aggrieved by SEBI’s decision.

• SAT consists of a presiding officer and two other members ; it has the same power as vested in a civil court.

Hence statement 3 is correct

• Question 13 of 30 13. Question 1 points Which of the following best describes the term *Fiscal* *Prudence* ? (a) A situation when government spending exceeds it's earning in a given fiscal year. (b) The Ratio of the government’s outstanding debt to its Gross Domestic Product (c) A ratio that compares the percentage change in tax revenue to the percentage change in National Income (d) Management of public finances in a responsible manners to ensure sustainable economic growth Correct Solution : D Fiscal prudence implies management of government finances in a responsible and sensible manner to ensure sustainable growth stability and welfare of the nation. Fiscal prudence helps to maintain fiscal sustainability and macroeconomic stability and promotes economic growth and social welfare. It can help avoid fiscal crisis and also in reduction of public debt and improving the quality of public spending in general. RBI has taken initiative to achieve fiscal prudence in India : State specific fiscal responsibility legislations Monitoring off budget borrowing Encouraging counter-cyclical fiscal policies- avoiding expenditure and savings based on economic cycles Subsidy rationalization – programs to optimise welfare expenditures Hence option D is correct Incorrect Solution : D Fiscal prudence implies management of government finances in a responsible and sensible manner to ensure sustainable growth stability and welfare of the nation. Fiscal prudence helps to maintain fiscal sustainability and macroeconomic stability and promotes economic growth and social welfare. It can help avoid fiscal crisis and also in reduction of public debt and improving the quality of public spending in general. RBI has taken initiative to achieve fiscal prudence in India : State specific fiscal responsibility legislations Monitoring off budget borrowing Encouraging counter-cyclical fiscal policies- avoiding expenditure and savings based on economic cycles Subsidy rationalization – programs to optimise welfare expenditures Hence option D is correct

#### 13. Question

Which of the following best describes the term *Fiscal* *Prudence* ?

• (a) A situation when government spending exceeds it's earning in a given fiscal year.

• (b) The Ratio of the government’s outstanding debt to its Gross Domestic Product

• (c) A ratio that compares the percentage change in tax revenue to the percentage change in National Income

• (d) Management of public finances in a responsible manners to ensure sustainable economic growth

Solution : D

• Fiscal prudence implies management of government finances in a responsible and sensible manner to ensure sustainable growth stability and welfare of the nation.

• Fiscal prudence helps to maintain fiscal sustainability and macroeconomic stability and promotes economic growth and social welfare.

• It can help avoid fiscal crisis and also in reduction of public debt and improving the quality of public spending in general.

RBI has taken initiative to achieve fiscal prudence in India :

• State specific fiscal responsibility legislations

• Monitoring off budget borrowing

• Encouraging counter-cyclical fiscal policies- avoiding expenditure and savings based on economic cycles

• Subsidy rationalization – programs to optimise welfare expenditures

Hence option D is correct

Solution : D

• Fiscal prudence implies management of government finances in a responsible and sensible manner to ensure sustainable growth stability and welfare of the nation.

• Fiscal prudence helps to maintain fiscal sustainability and macroeconomic stability and promotes economic growth and social welfare.

• It can help avoid fiscal crisis and also in reduction of public debt and improving the quality of public spending in general.

RBI has taken initiative to achieve fiscal prudence in India :

• State specific fiscal responsibility legislations

• Monitoring off budget borrowing

• Encouraging counter-cyclical fiscal policies- avoiding expenditure and savings based on economic cycles

• Subsidy rationalization – programs to optimise welfare expenditures

Hence option D is correct

• Question 14 of 30 14. Question 1 points Consider the following statements regarding Nidhi Companies : These are governed by rules framed by the Ministry of Finance without requiring licence of the RBI. No minimum capital is required to open a Nidhi company. It can land money only to a member. Which of the statements given above is/are correct? (a) 1 and 3 only (b) 2 only (c) 3 only (d) 1, 2 and 3 Correct Solution: C Nidhi Company is a type of Non Banking Financial Company. It does not require to receive licence from the Reserve Bank; hence it is easy to form. It is registered as a public company and should have ‘Nidhi Limited’ as the last words of its name. Nidhi companies are governed by Section 4 of the Companies Act 2013 ; these are overseen by the Ministry of Corporate Affairs. Hence statement 1 is incorrect Nidhi companies are easy to form requiring a minimum capital of Rs.10 lakh and at least 7 members of which three must be directors. Hence statement 2 is incorrect The operations of Nidhi companies are restricted to their members. These companies are not allowed to engage in activities like chit funds, leasing finance or insurance business. There are specific rules regarding the type and amount of deposit and loans these companies can offer. These companies cannot take deposits from Or lend to any individual who is not a member. Hence statement 3 is correct Incorrect Solution: C Nidhi Company is a type of Non Banking Financial Company. It does not require to receive licence from the Reserve Bank; hence it is easy to form. It is registered as a public company and should have ‘Nidhi Limited’ as the last words of its name. Nidhi companies are governed by Section 4 of the Companies Act 2013 ; these are overseen by the Ministry of Corporate Affairs. Hence statement 1 is incorrect Nidhi companies are easy to form requiring a minimum capital of Rs.10 lakh and at least 7 members of which three must be directors. Hence statement 2 is incorrect The operations of Nidhi companies are restricted to their members. These companies are not allowed to engage in activities like chit funds, leasing finance or insurance business. There are specific rules regarding the type and amount of deposit and loans these companies can offer. These companies cannot take deposits from Or lend to any individual who is not a member. Hence statement 3 is correct

#### 14. Question

Consider the following statements regarding Nidhi Companies :

• These are governed by rules framed by the Ministry of Finance without requiring licence of the RBI.

• No minimum capital is required to open a Nidhi company.

• It can land money only to a member.

Which of the statements given above is/are correct?

• (a) 1 and 3 only

• (b) 2 only

• (c) 3 only

• (d) 1, 2 and 3

Solution: C

• Nidhi Company is a type of Non Banking Financial Company.

• It does not require to receive licence from the Reserve Bank; hence it is easy to form.

• It is registered as a public company and should have ‘Nidhi Limited’ as the last words of its name.

• Nidhi companies are governed by Section 4 of the Companies Act 2013 ; these are overseen by the Ministry of Corporate Affairs.

Hence statement 1 is incorrect

• Nidhi companies are easy to form requiring a minimum capital of Rs.10 lakh and at least 7 members of which three must be directors.

Hence statement 2 is incorrect

• The operations of Nidhi companies are restricted to their members.

• These companies are not allowed to engage in activities like chit funds, leasing finance or insurance business.

• There are specific rules regarding the type and amount of deposit and loans these companies can offer.

• These companies cannot take deposits from Or lend to any individual who is not a member.

Hence statement 3 is correct

Solution: C

• Nidhi Company is a type of Non Banking Financial Company.

• It does not require to receive licence from the Reserve Bank; hence it is easy to form.

• It is registered as a public company and should have ‘Nidhi Limited’ as the last words of its name.

• Nidhi companies are governed by Section 4 of the Companies Act 2013 ; these are overseen by the Ministry of Corporate Affairs.

Hence statement 1 is incorrect

• Nidhi companies are easy to form requiring a minimum capital of Rs.10 lakh and at least 7 members of which three must be directors.

Hence statement 2 is incorrect

• The operations of Nidhi companies are restricted to their members.

• These companies are not allowed to engage in activities like chit funds, leasing finance or insurance business.

• There are specific rules regarding the type and amount of deposit and loans these companies can offer.

• These companies cannot take deposits from Or lend to any individual who is not a member.

Hence statement 3 is correct

• Question 15 of 30 15. Question 1 points Consider the following statements : The Gross Fixed Capital Formation (GFCF) measures the level of investment to enhance productive capacity of an economy.. GFCF represents investment portions of the Gross Domestic Product of a country. 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: C Gross Fixed Capital Formation refers to the total value of a country’s investments in fixed assets during a specific period These assets include infrastructure, machinery, equipment and buildings. It is an essential indicator of economic growth and development as it reflects the level of investment made to enhance productive capacity. The most important factors affecting GFCF are interest rate, business confidence, government policies and regulations, economic stability, availability of credit and foreign direct investment. GFCF is a component of a country’s Gross Domestic Product; it represents the investment portion of GDP. Hence statements 1 and 2 are correct Incorrect Solution: C Gross Fixed Capital Formation refers to the total value of a country’s investments in fixed assets during a specific period These assets include infrastructure, machinery, equipment and buildings. It is an essential indicator of economic growth and development as it reflects the level of investment made to enhance productive capacity. The most important factors affecting GFCF are interest rate, business confidence, government policies and regulations, economic stability, availability of credit and foreign direct investment. GFCF is a component of a country’s Gross Domestic Product; it represents the investment portion of GDP. Hence statements 1 and 2 are correct

#### 15. Question

Consider the following statements :

• The Gross Fixed Capital Formation (GFCF) measures the level of investment to enhance productive capacity of an economy..

• GFCF represents investment portions of the Gross Domestic Product of a country.

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: C

• Gross Fixed Capital Formation refers to the total value of a country’s investments in fixed assets during a specific period

• These assets include infrastructure, machinery, equipment and buildings.

• It is an essential indicator of economic growth and development as it reflects the level of investment made to enhance productive capacity.

• The most important factors affecting GFCF are interest rate, business confidence, government policies and regulations, economic stability, availability of credit and foreign direct investment.

• GFCF is a component of a country’s Gross Domestic Product; it represents the investment portion of GDP.

Hence statements 1 and 2 are correct

Solution: C

• Gross Fixed Capital Formation refers to the total value of a country’s investments in fixed assets during a specific period

• These assets include infrastructure, machinery, equipment and buildings.

• It is an essential indicator of economic growth and development as it reflects the level of investment made to enhance productive capacity.

• The most important factors affecting GFCF are interest rate, business confidence, government policies and regulations, economic stability, availability of credit and foreign direct investment.

• GFCF is a component of a country’s Gross Domestic Product; it represents the investment portion of GDP.

Hence statements 1 and 2 are correct

• Question 16 of 30 16. Question 1 points Which of the following best describes the term Stablecoins ? (a) The digital currency issued by the central bank of a country (b) A digital currency issued by an international grouping to facilitate trade within the members (c) A cryptocurrency whose value does not fluctuate depending on demand and supply (d) A cryptocurrency whose value is tied to another currency or financial instrument Correct Solution : D Stablecoins are cryptocurrencies whose value is pegged to that of another currency commodity or financial instrument These aim to provide an alternative to the high volatility of the most popular crytocurrencies including Bitcoin which has made crypto investments less suitable for everyday transactions. Stablecoins maybe pegged to a currency like US dollar or the price of a commodity such as gold. These crytocurrencies pursue price stability by maintaining reserve assets as collateral or through algorithmic formulas that are supposed to control supply. Hence option D is correct Incorrect Solution : D Stablecoins are cryptocurrencies whose value is pegged to that of another currency commodity or financial instrument These aim to provide an alternative to the high volatility of the most popular crytocurrencies including Bitcoin which has made crypto investments less suitable for everyday transactions. Stablecoins maybe pegged to a currency like US dollar or the price of a commodity such as gold. These crytocurrencies pursue price stability by maintaining reserve assets as collateral or through algorithmic formulas that are supposed to control supply. Hence option D is correct

#### 16. Question

Which of the following best describes the term Stablecoins ?

• (a) The digital currency issued by the central bank of a country

• (b) A digital currency issued by an international grouping to facilitate trade within the members

• (c) A cryptocurrency whose value does not fluctuate depending on demand and supply

• (d) A cryptocurrency whose value is tied to another currency or financial instrument

Solution : D

• Stablecoins are cryptocurrencies whose value is pegged to that of another currency commodity or financial instrument

• These aim to provide an alternative to the high volatility of the most popular crytocurrencies including Bitcoin which has made crypto investments less suitable for everyday transactions.

• Stablecoins maybe pegged to a currency like US dollar or the price of a commodity such as gold.

• These crytocurrencies pursue price stability by maintaining reserve assets as collateral or through algorithmic formulas that are supposed to control supply.

Hence option D is correct

Solution : D

• Stablecoins are cryptocurrencies whose value is pegged to that of another currency commodity or financial instrument

• These aim to provide an alternative to the high volatility of the most popular crytocurrencies including Bitcoin which has made crypto investments less suitable for everyday transactions.

• Stablecoins maybe pegged to a currency like US dollar or the price of a commodity such as gold.

• These crytocurrencies pursue price stability by maintaining reserve assets as collateral or through algorithmic formulas that are supposed to control supply.

Hence option D is correct

• Question 17 of 30 17. Question 1 points Consider the following statements : The Food Corporation of India is responsible for fixing buffer stock norms thrice a year, based on production. The Small Farmers Agri-Business Consortium (SFAC) is involved in procurement of pulses for buffer stock. 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: B Buffer stock is the Reserve of a commodity that is used to meet price fluctuations and unforeseen emergencies. A buffer stock of food grains is maintained by the government of India for meeting the prescribed minimum buffer stock norms for food security as well as monthly release of food grains for supply through Targeted Public distribution system and other welfare schemes. The Cabinet Committee on Economic Affairs fixes the minimum buffer norms on a quarterly basis The buffer stock figures and normally reviewed after every 5 years. Hence statement 1 is incorrect The government procures pulses from the farmers at the minimum support price. The government has engaged National Agricultural Cooperative Marketing Federation of India Limited, Small Farmers Agri-Business Consortium and Food Corporation of India to procure pulses for buffer stock. Hence statement 2 is correct Incorrect Solution: B Buffer stock is the Reserve of a commodity that is used to meet price fluctuations and unforeseen emergencies. A buffer stock of food grains is maintained by the government of India for meeting the prescribed minimum buffer stock norms for food security as well as monthly release of food grains for supply through Targeted Public distribution system and other welfare schemes. The Cabinet Committee on Economic Affairs fixes the minimum buffer norms on a quarterly basis The buffer stock figures and normally reviewed after every 5 years. Hence statement 1 is incorrect The government procures pulses from the farmers at the minimum support price. The government has engaged National Agricultural Cooperative Marketing Federation of India Limited, Small Farmers Agri-Business Consortium and Food Corporation of India to procure pulses for buffer stock. Hence statement 2 is correct

#### 17. Question

Consider the following statements :

• The Food Corporation of India is responsible for fixing buffer stock norms thrice a year, based on production.

• The Small Farmers Agri-Business Consortium (SFAC) is involved in procurement of pulses for buffer stock.

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: B

• Buffer stock is the Reserve of a commodity that is used to meet price fluctuations and unforeseen emergencies.

• A buffer stock of food grains is maintained by the government of India for meeting the prescribed minimum buffer stock norms for food security as well as monthly release of food grains for supply through Targeted Public distribution system and other welfare schemes.

• The Cabinet Committee on Economic Affairs fixes the minimum buffer norms on a quarterly basis

• The buffer stock figures and normally reviewed after every 5 years.

Hence statement 1 is incorrect

• The government procures pulses from the farmers at the minimum support price.

• The government has engaged National Agricultural Cooperative Marketing Federation of India Limited, Small Farmers Agri-Business Consortium and Food Corporation of India to procure pulses for buffer stock.

Hence statement 2 is correct

Solution: B

• Buffer stock is the Reserve of a commodity that is used to meet price fluctuations and unforeseen emergencies.

• The Cabinet Committee on Economic Affairs fixes the minimum buffer norms on a quarterly basis

• The buffer stock figures and normally reviewed after every 5 years.

Hence statement 1 is incorrect

• The government procures pulses from the farmers at the minimum support price.

Hence statement 2 is correct

• Question 18 of 30 18. Question 1 points Consider the following statements : Statement – I : In case of Inflationary gap, the real GDP remains higher than the potential GDP. Statement – II : Inflationary gap is created when government spending remains below the National Income. 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 : C When the government spends over an above the national income, it creates inflationary gap in the economy. This is often deliberately done by the government in the process of promoting growth. It is a situation when the real GDP is higher than the potential GDP This indicates higher economic activities. The gap can be checked by cutting government spending, raising taxes and interest rates, as well as decreasing money supply. Hence statement 1 is correct Deflationary gap occurs when government spends below the national income – a situation of fiscal surplus. It is a situation when the real GDP is lower than the potential GDP This indicates an economics slow down and can be reversed by increasing government spending, cutting taxes and interest rates and increasing money supply in the economy. Hence statement 2 is incorrect Incorrect Solution : C When the government spends over an above the national income, it creates inflationary gap in the economy. This is often deliberately done by the government in the process of promoting growth. It is a situation when the real GDP is higher than the potential GDP This indicates higher economic activities. The gap can be checked by cutting government spending, raising taxes and interest rates, as well as decreasing money supply. Hence statement 1 is correct Deflationary gap occurs when government spends below the national income – a situation of fiscal surplus. It is a situation when the real GDP is lower than the potential GDP This indicates an economics slow down and can be reversed by increasing government spending, cutting taxes and interest rates and increasing money supply in the economy. Hence statement 2 is incorrect

#### 18. Question

Consider the following statements :

Statement – I :

In case of Inflationary gap, the real GDP remains higher than the potential GDP.

Statement – II :

Inflationary gap is created when government spending remains below the National Income.

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 : C

• When the government spends over an above the national income, it creates inflationary gap in the economy.

• This is often deliberately done by the government in the process of promoting growth.

• It is a situation when the real GDP is higher than the potential GDP

• This indicates higher economic activities.

• The gap can be checked by cutting government spending, raising taxes and interest rates, as well as decreasing money supply.

Hence statement 1 is correct

• Deflationary gap occurs when government spends below the national income – a situation of fiscal surplus.

• It is a situation when the real GDP is lower than the potential GDP

• This indicates an economics slow down and can be reversed by increasing government spending, cutting taxes and interest rates and increasing money supply in the economy.

Hence statement 2 is incorrect

Solution : C

• When the government spends over an above the national income, it creates inflationary gap in the economy.

• This is often deliberately done by the government in the process of promoting growth.

• It is a situation when the real GDP is higher than the potential GDP

• This indicates higher economic activities.

• The gap can be checked by cutting government spending, raising taxes and interest rates, as well as decreasing money supply.

Hence statement 1 is correct

• Deflationary gap occurs when government spends below the national income – a situation of fiscal surplus.

• It is a situation when the real GDP is lower than the potential GDP

• This indicates an economics slow down and can be reversed by increasing government spending, cutting taxes and interest rates and increasing money supply in the economy.

Hence statement 2 is incorrect

• Question 19 of 30 19. Question 1 points Which of the following International groupings is associated with the ‘Global Alliance Against Hunger and Poverty’ ? (a) G7 (b) NATO (c) G20 (d) QUAD Correct Solution : C The Global Alliance against Hunger and Poverty has been launched by the G20 group of nations. The G20 leaders Summit held in Rio de Janeiro Brazil was headline by the official launch of the Global Alliance against Hunger and Poverty. The initiative will serve as a platform for connecting countries in need of assistance with public policies targeted towards eradicating hunger and poverty with partners willing to offer expertise or financial support. It is a voluntary coalition of Governments, International Organisations, NGO and other stake holders working to eradicate hunger, poverty reduce inequalities and support other related sustainable development goals. The Alliance is an important step towards implementation of the Deccan High Level Principles on Food Security and Nutrition that was adopted at the G20 New Delhi Summit 2023. Hence option C is correct Incorrect Solution : C The Global Alliance against Hunger and Poverty has been launched by the G20 group of nations. The G20 leaders Summit held in Rio de Janeiro Brazil was headline by the official launch of the Global Alliance against Hunger and Poverty. The initiative will serve as a platform for connecting countries in need of assistance with public policies targeted towards eradicating hunger and poverty with partners willing to offer expertise or financial support. It is a voluntary coalition of Governments, International Organisations, NGO and other stake holders working to eradicate hunger, poverty reduce inequalities and support other related sustainable development goals. The Alliance is an important step towards implementation of the Deccan High Level Principles on Food Security and Nutrition that was adopted at the G20 New Delhi Summit 2023. Hence option C is correct

#### 19. Question

Which of the following International groupings is associated with the ‘Global Alliance Against Hunger and Poverty’ ?

Solution : C

• The Global Alliance against Hunger and Poverty has been launched by the G20 group of nations.

• The G20 leaders Summit held in Rio de Janeiro Brazil was headline by the official launch of the Global Alliance against Hunger and Poverty.

• The initiative will serve as a platform for connecting countries in need of assistance with public policies targeted towards eradicating hunger and poverty with partners willing to offer expertise or financial support.

• It is a voluntary coalition of Governments, International Organisations, NGO and other stake holders working to eradicate hunger, poverty reduce inequalities and support other related sustainable development goals.

• The Alliance is an important step towards implementation of the Deccan High Level Principles on Food Security and Nutrition that was adopted at the G20 New Delhi Summit 2023.

Hence option C is correct

Solution : C

• The Global Alliance against Hunger and Poverty has been launched by the G20 group of nations.

• The G20 leaders Summit held in Rio de Janeiro Brazil was headline by the official launch of the Global Alliance against Hunger and Poverty.

• The Alliance is an important step towards implementation of the Deccan High Level Principles on Food Security and Nutrition that was adopted at the G20 New Delhi Summit 2023.

Hence option C is correct

• Question 20 of 30 20. Question 1 points Consider the following statements regarding Domestic Systemically Important Banks (D-SIBs): Criteria for D-SIBs is announced by the World bank annually. Banks with size greater than 2% of GDP are assessed for the inclusion as D-SIBs. Under RBI guidelines 2014, State Bank of India is the only D-SIB in India. How many of the statements given above is/are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: A Global Systemically Important Banks are identified by the Financial Stability Board in consultation with Basel Committee on Banking Supervision. In India the RBI first announced the Framework dealing with D-SIBs in 2014. Hence statement 1 is incorrect Selection criteria for D-SIBs: Banks with size >2% of GDP are assessed A composite score is calculated based on size, cross- jurisdiction a activity, substitutability and interconnectedness Banks above a threshold score are classified as D-SIBs. Hence statement 2 is correct There are three D-SIBs in India at present: State Bank of India (2015) ICICI Bank (2016) HDFC Bank (2017) Hence statement 3 is incorrect Incorrect Solution: A Global Systemically Important Banks are identified by the Financial Stability Board in consultation with Basel Committee on Banking Supervision. In India the RBI first announced the Framework dealing with D-SIBs in 2014. Hence statement 1 is incorrect Selection criteria for D-SIBs: Banks with size >2% of GDP are assessed A composite score is calculated based on size, cross- jurisdiction a activity, substitutability and interconnectedness Banks above a threshold score are classified as D-SIBs. Hence statement 2 is correct There are three D-SIBs in India at present: State Bank of India (2015) ICICI Bank (2016) HDFC Bank (2017) Hence statement 3 is incorrect

#### 20. Question

Consider the following statements regarding Domestic Systemically Important Banks (D-SIBs):

• Criteria for D-SIBs is announced by the World bank annually.

• Banks with size greater than 2% of GDP are assessed for the inclusion as D-SIBs.

• Under RBI guidelines 2014, State Bank of India is the only D-SIB in India.

How many of the statements given above is/are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: A

• Global Systemically Important Banks are identified by the Financial Stability Board in consultation with Basel Committee on Banking Supervision.

• In India the RBI first announced the Framework dealing with D-SIBs in 2014.

Hence statement 1 is incorrect

Selection criteria for D-SIBs:

• Banks with size >2% of GDP are assessed

• A composite score is calculated based on size, cross- jurisdiction a activity, substitutability and interconnectedness

• Banks above a threshold score are classified as D-SIBs.

Hence statement 2 is correct

There are three D-SIBs in India at present:

• State Bank of India (2015)

• ICICI Bank (2016)

• HDFC Bank (2017)

Hence statement 3 is incorrect

Solution: A

• Global Systemically Important Banks are identified by the Financial Stability Board in consultation with Basel Committee on Banking Supervision.

• In India the RBI first announced the Framework dealing with D-SIBs in 2014.

Hence statement 1 is incorrect

Selection criteria for D-SIBs:

• Banks with size >2% of GDP are assessed

• A composite score is calculated based on size, cross- jurisdiction a activity, substitutability and interconnectedness

• Banks above a threshold score are classified as D-SIBs.

Hence statement 2 is correct

There are three D-SIBs in India at present:

• State Bank of India (2015)

• ICICI Bank (2016)

• HDFC Bank (2017)

Hence statement 3 is incorrect

• Question 21 of 30 21. Question 1 points With reference to Cold Lava (Lahar), consider the following statements It is formed when rainwater mixes with volcanic materials such as ash, sand, and pebbles. It moves at a much slower pace than traditional lava flows, allowing sufficient time for evacuation. Lahars can occur even in the absence of an ongoing volcanic eruption. Which of the statements given above is/are correct? (a) 1 and 3 only (b) 2 and 3 only (c) 1 and 2 only (d) 1, 2, and 3 Correct Solution: A Cold Lava (Lahar): Lahar (Indonesian term) refers to cold lava, a fast-moving mixture of rainwater and volcanic materials (ash, sand, and pebbles). It resembles wet concrete and causes widespread destruction. Formation & Movement: Formed when rainwater mixes with volcanic debris. Can be triggered during or even without an eruption (heavy rainfall on volcanic deposits). Travels rapidly, reaching hundreds of km/h (faster than traditional lava). Can extend up to 60 km from the volcano. Picks up debris and sediment, increasing in volume and destructive power. Destructive Impact: More deadly than regular lava due to high speed and density. Causes massive damage to buildings, bridges, and roads. Internally hot due to chemical reactions, but externally behaves like mudflow. Serious threat to human life and infrastructure in volcanic regions. https://www.standard.co.uk/news/world/philippines-cold-lava-video-flow-eruption-b1162597.html Incorrect Solution: A Cold Lava (Lahar): Lahar (Indonesian term) refers to cold lava, a fast-moving mixture of rainwater and volcanic materials (ash, sand, and pebbles). It resembles wet concrete and causes widespread destruction. Formation & Movement: Formed when rainwater mixes with volcanic debris. Can be triggered during or even without an eruption (heavy rainfall on volcanic deposits). Travels rapidly, reaching hundreds of km/h (faster than traditional lava). Can extend up to 60 km from the volcano. Picks up debris and sediment, increasing in volume and destructive power. Destructive Impact: More deadly than regular lava due to high speed and density. Causes massive damage to buildings, bridges, and roads. Internally hot due to chemical reactions, but externally behaves like mudflow. Serious threat to human life and infrastructure in volcanic regions. https://www.standard.co.uk/news/world/philippines-cold-lava-video-flow-eruption-b1162597.html

#### 21. Question

With reference to Cold Lava (Lahar), consider the following statements

• It is formed when rainwater mixes with volcanic materials such as ash, sand, and pebbles.

• It moves at a much slower pace than traditional lava flows, allowing sufficient time for evacuation.

• Lahars can occur even in the absence of an ongoing volcanic eruption.

Which of the statements given above is/are correct?

• (a) 1 and 3 only

• (b) 2 and 3 only

• (c) 1 and 2 only

• (d) 1, 2, and 3

Solution: A

Cold Lava (Lahar):

• Lahar (Indonesian term) refers to cold lava, a fast-moving mixture of rainwater and volcanic materials (ash, sand, and pebbles).

• It resembles wet concrete and causes widespread destruction.

Formation & Movement:

• Formed when rainwater mixes with volcanic debris.

• Can be triggered during or even without an eruption (heavy rainfall on volcanic deposits).

• Travels rapidly, reaching hundreds of km/h (faster than traditional lava).

• Can extend up to 60 km from the volcano.

• Picks up debris and sediment, increasing in volume and destructive power.

Destructive Impact:

• More deadly than regular lava due to high speed and density.

• Causes massive damage to buildings, bridges, and roads.

• Internally hot due to chemical reactions, but externally behaves like mudflow.

• Serious threat to human life and infrastructure in volcanic regions.

https://www.standard.co.uk/news/world/philippines-cold-lava-video-flow-eruption-b1162597.html

Solution: A

Cold Lava (Lahar):

• Lahar (Indonesian term) refers to cold lava, a fast-moving mixture of rainwater and volcanic materials (ash, sand, and pebbles).

• It resembles wet concrete and causes widespread destruction.

Formation & Movement:

• Formed when rainwater mixes with volcanic debris.

• Can be triggered during or even without an eruption (heavy rainfall on volcanic deposits).

• Travels rapidly, reaching hundreds of km/h (faster than traditional lava).

• Can extend up to 60 km from the volcano.

• Picks up debris and sediment, increasing in volume and destructive power.

Destructive Impact:

• More deadly than regular lava due to high speed and density.

• Causes massive damage to buildings, bridges, and roads.

• Internally hot due to chemical reactions, but externally behaves like mudflow.

• Serious threat to human life and infrastructure in volcanic regions.

https://www.standard.co.uk/news/world/philippines-cold-lava-video-flow-eruption-b1162597.html

• Question 22 of 30 22. Question 1 points The Pantanal Wetlands, the world’s largest tropical wetland, span across which of the following countries? (a) Brazil, Argentina, Bolivia (b) Brazil, Bolivia, Paraguay (c) Brazil, Peru, Paraguay (d) Brazil, Colombia, Bolivia Correct Solution: B Pantanal wetlands: It is the world’s largest tropical wetland, spanning across Bolivia, Brazil, and Paraguay. Fed by the Paraguay River and its tributaries, it covers an estimated area of 140,000 to 195,000 square kilometres. During rainy seasons, about 80% of the floodplains are submerged, fostering a diverse range of aquatic plants and supporting numerous animal species. Designated as a National Heritage in Brazil, it faces threats from activities like cattle grazing, pollution, and infrastructure development. Despite its ecological significance, less than 5% of the Pantanal is protected, with most of it under private ownership. https://edition.cnn.com/2024/06/14/americas/brazil-pantanal-wetland-fires-intl-latam/index.html Incorrect Solution: B Pantanal wetlands: It is the world’s largest tropical wetland, spanning across Bolivia, Brazil, and Paraguay. Fed by the Paraguay River and its tributaries, it covers an estimated area of 140,000 to 195,000 square kilometres. During rainy seasons, about 80% of the floodplains are submerged, fostering a diverse range of aquatic plants and supporting numerous animal species. Designated as a National Heritage in Brazil, it faces threats from activities like cattle grazing, pollution, and infrastructure development. Despite its ecological significance, less than 5% of the Pantanal is protected, with most of it under private ownership. https://edition.cnn.com/2024/06/14/americas/brazil-pantanal-wetland-fires-intl-latam/index.html

#### 22. Question

The Pantanal Wetlands, the world’s largest tropical wetland, span across which of the following countries?

• (a) Brazil, Argentina, Bolivia

• (b) Brazil, Bolivia, Paraguay

• (c) Brazil, Peru, Paraguay

• (d) Brazil, Colombia, Bolivia

Solution: B

Pantanal wetlands:

It is the world’s largest tropical wetland, spanning across Bolivia, Brazil, and Paraguay. Fed by the Paraguay River and its tributaries, it covers an estimated area of 140,000 to 195,000 square kilometres. During rainy seasons, about 80% of the floodplains are submerged, fostering a diverse range of aquatic plants and supporting numerous animal species. Designated as a National Heritage in Brazil, it faces threats from activities like cattle grazing, pollution, and infrastructure development. Despite its ecological significance, less than 5% of the Pantanal is protected, with most of it under private ownership.

https://edition.cnn.com/2024/06/14/americas/brazil-pantanal-wetland-fires-intl-latam/index.html

Solution: B

Pantanal wetlands:

https://edition.cnn.com/2024/06/14/americas/brazil-pantanal-wetland-fires-intl-latam/index.html

• Question 23 of 30 23. Question 1 points With reference to the Pro-tem Speaker in India, consider the following statements The Pro-tem Speaker is appointed by the President for the Lok Sabha and by the Governor for the State Legislative Assembly. The Constitution of India explicitly mentions the term ‘Pro-tem Speaker.’ The primary duty of the Pro-tem Speaker is to administer the oath to newly elected members and oversee the election of the Speaker. The office of the Pro-tem Speaker ceases to exist immediately after the Speaker is elected. How many of the above statements are correct? (a) Only one (b) Only two (c) Only three (d) All four Correct Solution: C Pro-tem Speaker: The Pro-tem Speaker is a temporary Speaker appointed to conduct the first sitting of the newly elected Lok Sabha or State Legislative Assembly until a new Speaker is elected. The term “Pro-tem” is derived from Latin, meaning “for the time being.” The Constitution does not explicitly mention the term ‘Pro-tem Speaker’, but it is a parliamentary convention. Appointed by: President of India (for Lok Sabha) Governor (for State Legislative Assembly) Oath Administered by: President (for Lok Sabha) Governor (for State Assembly) Selection Process: The senior-most member of the House is usually appointed as the Pro-tem Speaker. The appointment is made in consultation with the ruling government. Duties: Presides over the first sitting of the House. Administers the oath to newly elected MPs/MLAs. Conducts the election for the Speaker and Deputy Speaker. Can conduct a floor test if required to prove the government’s majority. The office of the Pro-tem Speaker ceases to exist immediately after the new Speaker is elected. Ensures a smooth transition for the newly elected House. https://indianexpress.com/article/explained/everyday-explainers/pro-tem-speaker-lok-sabha-9399861/ Incorrect Solution: C Pro-tem Speaker: The Pro-tem Speaker is a temporary Speaker appointed to conduct the first sitting of the newly elected Lok Sabha or State Legislative Assembly until a new Speaker is elected. The term “Pro-tem” is derived from Latin, meaning “for the time being.” The Constitution does not explicitly mention the term ‘Pro-tem Speaker’, but it is a parliamentary convention. Appointed by: President of India (for Lok Sabha) Governor (for State Legislative Assembly) Oath Administered by: President (for Lok Sabha) Governor (for State Assembly) Selection Process: The senior-most member of the House is usually appointed as the Pro-tem Speaker. The appointment is made in consultation with the ruling government. Duties: Presides over the first sitting of the House. Administers the oath to newly elected MPs/MLAs. Conducts the election for the Speaker and Deputy Speaker. Can conduct a floor test if required to prove the government’s majority. The office of the Pro-tem Speaker ceases to exist immediately after the new Speaker is elected. Ensures a smooth transition for the newly elected House. https://indianexpress.com/article/explained/everyday-explainers/pro-tem-speaker-lok-sabha-9399861/

#### 23. Question

With reference to the Pro-tem Speaker in India, consider the following statements

• The Pro-tem Speaker is appointed by the President for the Lok Sabha and by the Governor for the State Legislative Assembly.

• The Constitution of India explicitly mentions the term ‘Pro-tem Speaker.’

• The primary duty of the Pro-tem Speaker is to administer the oath to newly elected members and oversee the election of the Speaker.

• The office of the Pro-tem Speaker ceases to exist immediately after the Speaker is elected.

How many of the above statements are correct?

• (a) Only one

• (b) Only two

• (c) Only three

• (d) All four

Solution: C

Pro-tem Speaker:

• The Pro-tem Speaker is a temporary Speaker appointed to conduct the first sitting of the newly elected Lok Sabha or State Legislative Assembly until a new Speaker is elected.

• The term “Pro-tem” is derived from Latin, meaning “for the time being.”

• The Constitution does not explicitly mention the term ‘Pro-tem Speaker’, but it is a parliamentary convention.

• Appointed by: President of India (for Lok Sabha) Governor (for State Legislative Assembly)

• President of India (for Lok Sabha)

• Governor (for State Legislative Assembly)

• Oath Administered by: President (for Lok Sabha) Governor (for State Assembly)

• President (for Lok Sabha)

• Governor (for State Assembly)

• Selection Process: The senior-most member of the House is usually appointed as the Pro-tem Speaker. The appointment is made in consultation with the ruling government.

• The senior-most member of the House is usually appointed as the Pro-tem Speaker.

• The appointment is made in consultation with the ruling government.

• Duties: Presides over the first sitting of the House. Administers the oath to newly elected MPs/MLAs. Conducts the election for the Speaker and Deputy Speaker. Can conduct a floor test if required to prove the government’s majority.

• Presides over the first sitting of the House.

• Administers the oath to newly elected MPs/MLAs.

• Conducts the election for the Speaker and Deputy Speaker.

• Can conduct a floor test if required to prove the government’s majority.

• The office of the Pro-tem Speaker ceases to exist immediately after the new Speaker is elected.

• Ensures a smooth transition for the newly elected House.

https://indianexpress.com/article/explained/everyday-explainers/pro-tem-speaker-lok-sabha-9399861/

Solution: C

Pro-tem Speaker:

• The Pro-tem Speaker is a temporary Speaker appointed to conduct the first sitting of the newly elected Lok Sabha or State Legislative Assembly until a new Speaker is elected.

• The term “Pro-tem” is derived from Latin, meaning “for the time being.”

• The Constitution does not explicitly mention the term ‘Pro-tem Speaker’, but it is a parliamentary convention.

• Appointed by: President of India (for Lok Sabha) Governor (for State Legislative Assembly)

• President of India (for Lok Sabha)

• Governor (for State Legislative Assembly)

• Oath Administered by: President (for Lok Sabha) Governor (for State Assembly)

• President (for Lok Sabha)

• Governor (for State Assembly)

• Selection Process: The senior-most member of the House is usually appointed as the Pro-tem Speaker. The appointment is made in consultation with the ruling government.

• The senior-most member of the House is usually appointed as the Pro-tem Speaker.

• The appointment is made in consultation with the ruling government.

• Presides over the first sitting of the House.

• Administers the oath to newly elected MPs/MLAs.

• Conducts the election for the Speaker and Deputy Speaker.

• Can conduct a floor test if required to prove the government’s majority.

• The office of the Pro-tem Speaker ceases to exist immediately after the new Speaker is elected.

• Ensures a smooth transition for the newly elected House.

https://indianexpress.com/article/explained/everyday-explainers/pro-tem-speaker-lok-sabha-9399861/

• Question 24 of 30 24. Question 1 points Consider the following statements Statement-I: The National Health Claim Exchange (NHCX) is a digital platform launched to streamline health insurance claims processing and facilitate seamless transactions between hospitals, insurers, and policyholders. Statement-II: The NHCX aims to replace all existing health insurance claim settlement mechanisms in India and make the system fully government-operated. Which one of the following is correct in respect of the above statements? (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I (c) Statement-I is correct but Statement-II is incorrect (d) Statement-I is incorrect but Statement-II is correct Correct Solution: C National Health Claim Exchange (NHCX): The National Health Claim Exchange (NHCX) is a digital platform launched by the National Health Authority (NHA) and the Insurance Regulatory and Development Authority of India (IRDAI). It is designed to streamline health insurance claims processing and improve coordination among hospitals, insurers, and policyholders. The system supports paperless, secure, and seamless claim settlements in India’s diverse healthcare ecosystem. Aligns with IRDAI’s goal of ‘Insurance for All by 2047’ to expand insurance coverage. NHCX does not replace all existing claim mechanisms; rather, it functions as a digital exchange to standardize and improve coordination among stakeholders in the healthcare and insurance ecosystem. Objectives: Facilitate cashless health insurance claims across different hospitals and insurers. Reduce administrative burden by eliminating multiple portals and manual paperwork. Standardize healthcare pricing through uniform data presentation and centralized validation. Enhance fraud detection by verifying claim data. Advantages of NHCX: Faster Claims Processing: Simplifies and expedites the cashless claims process, reducing waiting times and out-of-pocket expenses. Improved Transparency: Ensures data standardization across stakeholders. Efficiency in Healthcare System: Reduces paperwork and operational costs for hospitals and insurers. Prevention of Fraud: Uses data verification to detect fraudulent claims and enhance the integrity of the system. https://www.thehindu.com/sci-tech/health/what-is-the-national-health-claim-exchange-explained/article68267419.ece Incorrect Solution: C National Health Claim Exchange (NHCX): The National Health Claim Exchange (NHCX) is a digital platform launched by the National Health Authority (NHA) and the Insurance Regulatory and Development Authority of India (IRDAI). It is designed to streamline health insurance claims processing and improve coordination among hospitals, insurers, and policyholders. The system supports paperless, secure, and seamless claim settlements in India’s diverse healthcare ecosystem. Aligns with IRDAI’s goal of ‘Insurance for All by 2047’ to expand insurance coverage. NHCX does not replace all existing claim mechanisms; rather, it functions as a digital exchange to standardize and improve coordination among stakeholders in the healthcare and insurance ecosystem. Objectives: Facilitate cashless health insurance claims across different hospitals and insurers. Reduce administrative burden by eliminating multiple portals and manual paperwork. Standardize healthcare pricing through uniform data presentation and centralized validation. Enhance fraud detection by verifying claim data. Advantages of NHCX: Faster Claims Processing: Simplifies and expedites the cashless claims process, reducing waiting times and out-of-pocket expenses. Improved Transparency: Ensures data standardization across stakeholders. Efficiency in Healthcare System: Reduces paperwork and operational costs for hospitals and insurers. Prevention of Fraud: Uses data verification to detect fraudulent claims and enhance the integrity of the system. https://www.thehindu.com/sci-tech/health/what-is-the-national-health-claim-exchange-explained/article68267419.ece

#### 24. Question

Consider the following statements

Statement-I:

The National Health Claim Exchange (NHCX) is a digital platform launched to streamline health insurance claims processing and facilitate seamless transactions between hospitals, insurers, and policyholders.

Statement-II:

The NHCX aims to replace all existing health insurance claim settlement mechanisms in India and make the system fully government-operated.

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

• (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

• (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

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

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

Solution: C

National Health Claim Exchange (NHCX):

• The National Health Claim Exchange (NHCX) is a digital platform launched by the National Health Authority (NHA) and the Insurance Regulatory and Development Authority of India (IRDAI).

• It is designed to streamline health insurance claims processing and improve coordination among hospitals, insurers, and policyholders.

• The system supports paperless, secure, and seamless claim settlements in India’s diverse healthcare ecosystem.

• Aligns with IRDAI’s goal of ‘Insurance for All by 2047’ to expand insurance coverage.

• NHCX does not replace all existing claim mechanisms; rather, it functions as a digital exchange to standardize and improve coordination among stakeholders in the healthcare and insurance ecosystem.

Objectives:

• Facilitate cashless health insurance claims across different hospitals and insurers.

• Reduce administrative burden by eliminating multiple portals and manual paperwork.

• Standardize healthcare pricing through uniform data presentation and centralized validation.

• Enhance fraud detection by verifying claim data.

Advantages of NHCX:

• Faster Claims Processing: Simplifies and expedites the cashless claims process, reducing waiting times and out-of-pocket expenses.

• Improved Transparency: Ensures data standardization across stakeholders.

• Efficiency in Healthcare System: Reduces paperwork and operational costs for hospitals and insurers.

• Prevention of Fraud: Uses data verification to detect fraudulent claims and enhance the integrity of the system.

https://www.thehindu.com/sci-tech/health/what-is-the-national-health-claim-exchange-explained/article68267419.ece

Solution: C

National Health Claim Exchange (NHCX):

• It is designed to streamline health insurance claims processing and improve coordination among hospitals, insurers, and policyholders.

• The system supports paperless, secure, and seamless claim settlements in India’s diverse healthcare ecosystem.

• Aligns with IRDAI’s goal of ‘Insurance for All by 2047’ to expand insurance coverage.

Objectives:

• Facilitate cashless health insurance claims across different hospitals and insurers.

• Reduce administrative burden by eliminating multiple portals and manual paperwork.

• Standardize healthcare pricing through uniform data presentation and centralized validation.

• Enhance fraud detection by verifying claim data.

Advantages of NHCX:

• Faster Claims Processing: Simplifies and expedites the cashless claims process, reducing waiting times and out-of-pocket expenses.

• Improved Transparency: Ensures data standardization across stakeholders.

• Efficiency in Healthcare System: Reduces paperwork and operational costs for hospitals and insurers.

• Prevention of Fraud: Uses data verification to detect fraudulent claims and enhance the integrity of the system.

https://www.thehindu.com/sci-tech/health/what-is-the-national-health-claim-exchange-explained/article68267419.ece

• Question 25 of 30 25. Question 1 points Which of the following best describes the purpose of Ways and Means Advances (WMA)? (a) A long-term borrowing facility for the Central and State Governments to fund infrastructure projects. (b) A short-term borrowing facility to help the Central and State Governments manage temporary mismatches in receipts and expenditures. (c) A mechanism for commercial banks to borrow funds from the RBI at the repo rate. (d) A fiscal policy tool used by the government to regulate inflation in the economy. Correct Solution: B Ways and Means Advances (WMA): Ways and Means Advances (WMA) is a short-term borrowing facility provided by the Reserve Bank of India (RBI) to the Central and State Governments to manage temporary mismatches in their receipts and expenditures. Introduced in 1997, WMA allows governments to borrow funds immediately, which must be repaid within 90 days. It is authorized under Section 17(5) of the RBI Act, 1934. If the WMA exceeds 90 days, it turns into an overdraft and attracts an interest rate 2 percentage points higher than the repo rate. Incorrect Solution: B Ways and Means Advances (WMA): Ways and Means Advances (WMA) is a short-term borrowing facility provided by the Reserve Bank of India (RBI) to the Central and State Governments to manage temporary mismatches in their receipts and expenditures. Introduced in 1997, WMA allows governments to borrow funds immediately, which must be repaid within 90 days. It is authorized under Section 17(5) of the RBI Act, 1934. If the WMA exceeds 90 days, it turns into an overdraft and attracts an interest rate 2 percentage points higher than the repo rate.

#### 25. Question

Which of the following best describes the purpose of Ways and Means Advances (WMA)?

• (a) A long-term borrowing facility for the Central and State Governments to fund infrastructure projects.

• (b) A short-term borrowing facility to help the Central and State Governments manage temporary mismatches in receipts and expenditures.

• (c) A mechanism for commercial banks to borrow funds from the RBI at the repo rate.

• (d) A fiscal policy tool used by the government to regulate inflation in the economy.

Solution: B

Ways and Means Advances (WMA):

• Ways and Means Advances (WMA) is a short-term borrowing facility provided by the Reserve Bank of India (RBI) to the Central and State Governments to manage temporary mismatches in their receipts and expenditures.

• Introduced in 1997, WMA allows governments to borrow funds immediately, which must be repaid within 90 days.

• It is authorized under Section 17(5) of the RBI Act, 1934.

• If the WMA exceeds 90 days, it turns into an overdraft and attracts an interest rate 2 percentage points higher than the repo rate.

Solution: B

Ways and Means Advances (WMA):

• Introduced in 1997, WMA allows governments to borrow funds immediately, which must be repaid within 90 days.

• It is authorized under Section 17(5) of the RBI Act, 1934.

• If the WMA exceeds 90 days, it turns into an overdraft and attracts an interest rate 2 percentage points higher than the repo rate.

• Question 26 of 30 26. Question 1 points Once upon a time there were two friends called Afzal and Imanullah. One day Afzal visited Imanullah, in his home in Kashmir. Imanullah, who was richer of the two, lived in a lovely house with latticed windows and pretty flowers on the rooftop. He wanted to impress his friend with his hospitality. He wished to treat him to the most delicious dishes of Kashmir. So, he got a grand feast prepared. The cooks and the women of the house spent a whole day preparing roasts, breads, and curries for their guest. ‘I’m sure Afzal will be highly impressed with this feast,’ he told his wife. Afzal arrived. He was shown his room, and a servant stood patiently to attend to his needs. After a while, lunch was announced and the men sat down to eat. Dish after dish was served on simple earthenware plates. Afzal ate with relish as Imanullah waited eagerly upon him. He was anxious to know what Afzal felt about the grand feast that had been laid out. Surely he’ll appreciate the lovely dishes after the dessert, he thought to himself. When the meal was over, Afzal merely said, ‘Though the meal was well cooked, it comes nowhere near the feast served in Punjab.’ For this was the place where he lived. Imanullah wondered how grand the feasts of Punjab could be. But he felt that he could surely match them. He asked his cooks to put together a bigger feast. All the cookbooks were taken out, and the delicacies of Kashmiri wazwan were prepared carefully. This time vegetables were added to the menu. What a hustle and bustle there was in his kitchen! Imanullah smiled to himself. ‘This time Afzal will surely be delighted,’ he said. The grand fare was set before Afzal. He tasted each dish as it arrived on beautiful plates. He ate slowly, relishing every mouthful. Imanullah was certain that Afzal would give a compliment this time. The meal over, Afzal stretched out on the carpet, and began to speak. Imanullah waited ‘This is indeed food fit for a king, but still, it does not match the feasts I have at home.’ Imanullah was disappointed and vowed to find out for himself what the feast of Punjab contained. Imanullah goes out of his way to impress Afzal with his hospitality. Afzal considers the Kashmiri feast to be unmatched. Which of the above statements, if false, could be seen as supporting the passage? a. 1 only b. 2 only c. Both 1 & 2 d. Neither 1 nor 2 Correct Correct Option : B Justification : Justification: The first statement is true based on the passage as it shows how Imanullah takes a lot of effort to impress his friend by preparing two grand feasts. Thus if this statement were false, it would not support the passage. The second statement does not support the passage as Afzal believes that the Kashmiri feast is no match for a feast from Punjab. Thus if the statement is seen as false, it will support the passage. Hence, B. Incorrect Correct Option : B Justification : Justification: The first statement is true based on the passage as it shows how Imanullah takes a lot of effort to impress his friend by preparing two grand feasts. Thus if this statement were false, it would not support the passage. The second statement does not support the passage as Afzal believes that the Kashmiri feast is no match for a feast from Punjab. Thus if the statement is seen as false, it will support the passage. Hence, B.

#### 26. Question

Once upon a time there were two friends called Afzal and Imanullah. One day Afzal visited Imanullah, in his home in Kashmir. Imanullah, who was richer of the two, lived in a lovely house with latticed windows and pretty flowers on the rooftop. He wanted to impress his friend with his hospitality. He wished to treat him to the most delicious dishes of Kashmir. So, he got a grand feast prepared. The cooks and the women of the house spent a whole day preparing roasts, breads, and curries for their guest.

‘I’m sure Afzal will be highly impressed with this feast,’ he told his wife.

Afzal arrived. He was shown his room, and a servant stood patiently to attend to his needs. After a while, lunch was announced and the men sat down to eat. Dish after dish was served on simple earthenware plates. Afzal ate with relish as Imanullah waited eagerly upon him. He was anxious to know what Afzal felt about the grand feast that had been laid out.

Surely he’ll appreciate the lovely dishes after the dessert, he thought to himself.

When the meal was over, Afzal merely said, ‘Though the meal was well cooked, it comes nowhere near the feast served in Punjab.’ For this was the place where he lived.

Imanullah wondered how grand the feasts of Punjab could be. But he felt that he could surely match them. He asked his cooks to put together a bigger feast. All the cookbooks were taken out, and the delicacies of Kashmiri wazwan were prepared carefully. This time vegetables were added to the menu. What a hustle and bustle there was in his kitchen!

Imanullah smiled to himself. ‘This time Afzal will surely be delighted,’ he said.

The grand fare was set before Afzal. He tasted each dish as it arrived on beautiful plates. He ate slowly, relishing every mouthful. Imanullah was certain that Afzal would give a compliment this time.

The meal over, Afzal stretched out on the carpet, and began to speak. Imanullah waited

‘This is indeed food fit for a king, but still, it does not match the feasts I have at home.’

Imanullah was disappointed and vowed to find out for himself what the feast of Punjab contained.

• Imanullah goes out of his way to impress Afzal with his hospitality.

• Afzal considers the Kashmiri feast to be unmatched.

Which of the above statements, if false, could be seen as supporting the passage?

• c. Both 1 & 2

• d. Neither 1 nor 2

Correct Option : B

Justification :

Justification:

The first statement is true based on the passage as it shows how Imanullah takes a lot of effort to impress his friend by preparing two grand feasts. Thus if this statement were false, it would not support the passage.

The second statement does not support the passage as Afzal believes that the Kashmiri feast is no match for a feast from Punjab. Thus if the statement is seen as false, it will support the passage. Hence, B.

Correct Option : B

Justification :

Justification:

• Question 27 of 30 27. Question 1 points A cyclist leaves A at 10 am and reaches B at 11 am. Starting from 10:01 am, every minute a motorcycle leaves A and moves towards B. Forty-five such motorcycles reach B by 11 am. All motorcycles have the same speed. If the cyclist had doubled his speed, how many motorcycles would have reached B by the time the cyclist reached B? a. 22 b. 23 c. 15 d. 20 Correct Correct Option : C Justification : Explanation: It is given that starting from 10:01 am, every minute a motorcycle leaves A and moves towards B. Forty-five such motorcycles reach B by 11 am. It means that the forty-fifth motorcycle starts at 10:45 AM at A and reaches B by 11:00 AM i.e 15 minutes. Since the speed of all the motorcycles is the same, all the motorcycles will take the same duration i.e 15 minutes. If the cyclist doubles the speed, then he will reach B by 10:30 AM. (Since if the speed is doubled, time is reduced by half) Since each motorcycle takes 15 minutes to reach B, 15 motorcycles would have reached B by the time the cyclist reaches B Incorrect Correct Option : C Justification : Explanation: It is given that starting from 10:01 am, every minute a motorcycle leaves A and moves towards B. Forty-five such motorcycles reach B by 11 am. It means that the forty-fifth motorcycle starts at 10:45 AM at A and reaches B by 11:00 AM i.e 15 minutes. Since the speed of all the motorcycles is the same, all the motorcycles will take the same duration i.e 15 minutes. If the cyclist doubles the speed, then he will reach B by 10:30 AM. (Since if the speed is doubled, time is reduced by half) Since each motorcycle takes 15 minutes to reach B, 15 motorcycles would have reached B by the time the cyclist reaches B

#### 27. Question

A cyclist leaves A at 10 am and reaches B at 11 am. Starting from 10:01 am, every minute a motorcycle leaves A and moves towards B. Forty-five such motorcycles reach B by 11 am. All motorcycles have the same speed. If the cyclist had doubled his speed, how many motorcycles would have reached B by the time the cyclist reached B?

Correct Option : C

Justification :

Explanation:

It is given that starting from 10:01 am, every minute a motorcycle leaves A and moves towards B.

Forty-five such motorcycles reach B by 11 am.

It means that the forty-fifth motorcycle starts at 10:45 AM at A and reaches B by 11:00 AM i.e 15 minutes.

Since the speed of all the motorcycles is the same, all the motorcycles will take the same duration i.e 15 minutes.

If the cyclist doubles the speed, then he will reach B by 10:30 AM. (Since if the speed is doubled, time is reduced by half)

Since each motorcycle takes 15 minutes to reach B, 15 motorcycles would have reached B by the time the cyclist reaches B

Correct Option : C

Justification :

Explanation:

It is given that starting from 10:01 am, every minute a motorcycle leaves A and moves towards B.

Forty-five such motorcycles reach B by 11 am.

It means that the forty-fifth motorcycle starts at 10:45 AM at A and reaches B by 11:00 AM i.e 15 minutes.

Since the speed of all the motorcycles is the same, all the motorcycles will take the same duration i.e 15 minutes.

If the cyclist doubles the speed, then he will reach B by 10:30 AM. (Since if the speed is doubled, time is reduced by half)

Since each motorcycle takes 15 minutes to reach B, 15 motorcycles would have reached B by the time the cyclist reaches B

• Question 28 of 30 28. Question 1 points If the upstream speed of a boat is 50% less than the downstream speed of the boat and if a object is thrown in the river it covers 100m in 50 sec, then how much distance boat can cover in still water in 5 hours? a. 900 km b. . 100 km c. 120 km d. 108 km Correct Correct Option : D Justification : Answer D) 108 km Let the speed of boat in still water be s m/sec As the object covers 100m in 50 sec , so the distance travelled by the object will be with the help of the speed of the stream only. Speed of stream = 100/50 = 2 m/s Given that, (s – 2) = (s + 2) – 50 (s + 2)/100 (s – 2) = (s + 2)(1 – 1/2) s = 6 m/sec s = (6 × 18)/5 = 108/5 km/hr Distance covered by the boat in still water in 5 hours = 108 × 5/5 = 108 km Hence, option D is correct Incorrect Correct Option : D Justification : Answer D) 108 km Let the speed of boat in still water be s m/sec As the object covers 100m in 50 sec , so the distance travelled by the object will be with the help of the speed of the stream only. Speed of stream = 100/50 = 2 m/s Given that, (s – 2) = (s + 2) – 50 (s + 2)/100 (s – 2) = (s + 2)(1 – 1/2) s = 6 m/sec s = (6 × 18)/5 = 108/5 km/hr Distance covered by the boat in still water in 5 hours = 108 × 5/5 = 108 km Hence, option D is correct

#### 28. Question

If the upstream speed of a boat is 50% less than the downstream speed of the boat and if a object is thrown in the river it covers 100m in 50 sec, then how much distance boat can cover in still water in 5 hours?

• b. . 100 km

Correct Option : D

Justification :

Answer D) 108 km

Let the speed of boat in still water be s m/sec

As the object covers 100m in 50 sec , so the distance travelled by the object will be with the help of the speed of the stream only.

Speed of stream = 100/50 = 2 m/s

Given that, (s – 2) = (s + 2) – 50 (s + 2)/100

(s – 2) = (s + 2)(1 – 1/2)

s = 6 m/sec

s = (6 × 18)/5 = 108/5 km/hr

Distance covered by the boat in still water in 5 hours = 108 × 5/5 = 108 km

Hence, option D is correct

Correct Option : D

Justification :

Answer D) 108 km

Let the speed of boat in still water be s m/sec

As the object covers 100m in 50 sec , so the distance travelled by the object will be with the help of the speed of the stream only.

Speed of stream = 100/50 = 2 m/s

Given that, (s – 2) = (s + 2) – 50 (s + 2)/100

(s – 2) = (s + 2)(1 – 1/2)

s = 6 m/sec

s = (6 × 18)/5 = 108/5 km/hr

Distance covered by the boat in still water in 5 hours = 108 × 5/5 = 108 km

Hence, option D is correct

• Question 29 of 30 29. Question 1 points Anil, Sunil, and Ravi run along a circular path of length 3 km, starting from the same point at the same time, and going in the clockwise direction. If they run at speeds of 15 km/hr, 10 km/hr, and 8 km/hr, respectively, how much distance in km will Ravi have run when Anil and Sunil meet again for the first time at the starting point? a. 4.8 km b. 4.6 km c. 5.2 km d. 4.2 km Correct Correct Option : A Justification : Answer A) 4.8 km Anil and Sunil will meet at a first point after LCM (3/15 , 3/10 ) = 3/5 hr In the mean time, distance travelled by Ravi = 8 3/5 = 4.8 km Incorrect Correct Option : A Justification : Answer A) 4.8 km Anil and Sunil will meet at a first point after LCM (3/15 , 3/10 ) = 3/5 hr In the mean time, distance travelled by Ravi = 8 3/5 = 4.8 km

#### 29. Question

Anil, Sunil, and Ravi run along a circular path of length 3 km, starting from the same point at the same time, and going in the clockwise direction. If they run at speeds of 15 km/hr, 10 km/hr, and 8 km/hr, respectively, how much distance in km will Ravi have run when Anil and Sunil meet again for the first time at the starting point?

Correct Option : A

Justification :

Answer A) 4.8 km

Anil and Sunil will meet at a first point after LCM (3/15 , 3/10 ) = 3/5 hr

In the mean time, distance travelled by Ravi = 8 * 3/5 = 4.8 km

Correct Option : A

Justification :

Answer A) 4.8 km

Anil and Sunil will meet at a first point after LCM (3/15 , 3/10 ) = 3/5 hr

In the mean time, distance travelled by Ravi = 8 * 3/5 = 4.8 km

• Question 30 of 30 30. Question 1 points City A to City B is a downstream journey on a stream which flows at a speed of 5km/hr. Boats P and Q run a shuttle service between the two cities that are 300 kms apart. Boat P, which starts from City A has a still-water speed of 25km/hr, while boat Q, which starts from city B at the same time has a still-water speed of 15km/hr. When will the two boats meet for the first time? (this part is easy) When and where will they meet for the second time? a. 7.5 hours and 15 hours b. 7.5 hours and 18 hours c. 8 hours and 18 hours d. 7.5 hours and 20 hours Correct Correct Option : D Justification : Answer D) 7.5 hours and 20 hours Understanding relative speed would help. Boat P starts from city A and Q starts from city B. When boat P travels downstream, it will effectively have a speed to 30kmph. Likewise, Q will have an effective speed of 10kmph. The relative speed = 40kmph. So, the two boats will meet for the first time after 300/40 hours (Distance/relative speed) = 7.5 hours (Actually, for this part we do not need the speed of the stream) The second part is more interesting, because the speed of the boats change when they change direction. Boat P is quicker, so it will reach the destination sooner. Boat P will reach City B in 10 hours 300/30. When boat P reaches city B, boat Q will be at a point 100kms from city B. After 10 hours, both P and Q will be travelling upstream, P’s speed = 20 km/hr Q’s speed = 10 km/hr Relative speed = 10km/hr Q is ahead of P by 100 kms P will catch up with Q after 10 more hours (Distance/Relative Speed)− (100/10) So, P and Q will meet after 20 hours at a point 200 kms from city B Hence, the answer is 7.5 hours and 20 hours Choice D is the correct answer. Incorrect Correct Option : D Justification : Answer D) 7.5 hours and 20 hours Understanding relative speed would help. Boat P starts from city A and Q starts from city B. When boat P travels downstream, it will effectively have a speed to 30kmph. Likewise, Q will have an effective speed of 10kmph. The relative speed = 40kmph. So, the two boats will meet for the first time after 300/40 hours (Distance/relative speed) = 7.5 hours (Actually, for this part we do not need the speed of the stream) The second part is more interesting, because the speed of the boats change when they change direction. Boat P is quicker, so it will reach the destination sooner. Boat P will reach City B in 10 hours 300/30. When boat P reaches city B, boat Q will be at a point 100kms from city B. After 10 hours, both P and Q will be travelling upstream, P’s speed = 20 km/hr Q’s speed = 10 km/hr Relative speed = 10km/hr Q is ahead of P by 100 kms P will catch up with Q after 10 more hours (Distance/Relative Speed)− (100/10) So, P and Q will meet after 20 hours at a point 200 kms from city B Hence, the answer is 7.5 hours and 20 hours Choice D is the correct answer.

#### 30. Question

City A to City B is a downstream journey on a stream which flows at a speed of 5km/hr. Boats P and Q run a shuttle service between the two cities that are 300 kms apart. Boat P, which starts from City A has a still-water speed of 25km/hr, while boat Q, which starts from city B at the same time has a still-water speed of 15km/hr. When will the two boats meet for the first time? (this part is easy) When and where will they meet for the second time?

• a. 7.5 hours and 15 hours

• b. 7.5 hours and 18 hours

• c. 8 hours and 18 hours

• d. 7.5 hours and 20 hours

Correct Option : D

Justification :

Answer D) 7.5 hours and 20 hours

Understanding relative speed would help.

Boat P starts from city A and Q starts from city B.

When boat P travels downstream, it will effectively have a speed to 30kmph. Likewise, Q will have an effective speed of 10kmph. The relative speed = 40kmph. So, the two boats will meet for the first time after 300/40 hours (Distance/relative speed) = 7.5 hours (Actually, for this part we do not need the speed of the stream)

The second part is more interesting, because the speed of the boats change when they change direction. Boat P is quicker, so it will reach the destination sooner. Boat P will reach City B in 10 hours 300/30. When boat P reaches city B, boat Q will be at a point 100kms from city B.

After 10 hours, both P and Q will be travelling upstream,

P’s speed = 20 km/hr

Q’s speed = 10 km/hr

Relative speed = 10km/hr

Q is ahead of P by 100 kms

P will catch up with Q after 10 more hours (Distance/Relative Speed)− (100/10)

So, P and Q will meet after 20 hours at a point 200 kms from city B

Hence, the answer is 7.5 hours and 20 hours

Choice D is the correct answer.

Correct Option : D

Justification :

Answer D) 7.5 hours and 20 hours

Understanding relative speed would help.

Boat P starts from city A and Q starts from city B.

After 10 hours, both P and Q will be travelling upstream,

P’s speed = 20 km/hr

Q’s speed = 10 km/hr

Relative speed = 10km/hr

Q is ahead of P by 100 kms

P will catch up with Q after 10 more hours (Distance/Relative Speed)− (100/10)