UPSC Static Quiz – Economy : 17 July 2025

UPSC Static Quiz – Economy : 17 July 2025 We will post 5 questions daily on static topics mentioned in the UPSC civil services preliminary examination syllabus. Each week will focus on a specific topic from the syllabus, such as History of India and Indian National Movement, Indian and World Geography, and more.We are excited to bring you our daily UPSC Static Quiz, designed to help you prepare for the UPSC Civil Services Preliminary Examination. Each day, we will post 5 questions on static topics mentioned in the UPSC syllabus. This week, we are focusing on Indian and World Geography.

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• Question 1 of 5 1. Question Consider the following statements regarding progressive taxation system. Statement-I: A progressive taxation system is one where the average tax rate increases as the taxable income increases. Statement-II: Progressive taxation aims to reduce income inequality by imposing a higher tax burden on those with a greater ability to pay. 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: A Statement-I is correct. A progressive taxation system is characterized by an increasing average tax rate as an individual’s or entity’s income increases. This means that higher earners pay a larger percentage of their income in taxes compared to lower earners. This is typically achieved through tax brackets where higher portions of income are taxed at higher marginal rates. Statement-II is correct. One of the primary objectives of a progressive taxation system is to achieve greater equity in the distribution of the tax burden and to reduce income inequality. The principle underlying it is that individuals with higher incomes have a greater ability to pay taxes, and thus should contribute a larger proportion of their income to public revenue. Statement-II explains the rationale or objective behind the structure described in Statement-I. Therefore, Statement-II is the correct explanation for Statement-I. Incorrect Solution: A Statement-I is correct. A progressive taxation system is characterized by an increasing average tax rate as an individual’s or entity’s income increases. This means that higher earners pay a larger percentage of their income in taxes compared to lower earners. This is typically achieved through tax brackets where higher portions of income are taxed at higher marginal rates. Statement-II is correct. One of the primary objectives of a progressive taxation system is to achieve greater equity in the distribution of the tax burden and to reduce income inequality. The principle underlying it is that individuals with higher incomes have a greater ability to pay taxes, and thus should contribute a larger proportion of their income to public revenue. Statement-II explains the rationale or objective behind the structure described in Statement-I. Therefore, Statement-II is the correct explanation for Statement-I.

#### 1. Question

Consider the following statements regarding progressive taxation system.

Statement-I: A progressive taxation system is one where the average tax rate increases as the taxable income increases.

Statement-II: Progressive taxation aims to reduce income inequality by imposing a higher tax burden on those with a greater ability to pay.

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: A

• Statement-I is correct. A progressive taxation system is characterized by an increasing average tax rate as an individual’s or entity’s income increases. This means that higher earners pay a larger percentage of their income in taxes compared to lower earners. This is typically achieved through tax brackets where higher portions of income are taxed at higher marginal rates.

• Statement-II is correct. One of the primary objectives of a progressive taxation system is to achieve greater equity in the distribution of the tax burden and to reduce income inequality. The principle underlying it is that individuals with higher incomes have a greater ability to pay taxes, and thus should contribute a larger proportion of their income to public revenue.

Statement-II explains the rationale or objective behind the structure described in Statement-I. Therefore, Statement-II is the correct explanation for Statement-I.

Solution: A

Statement-II explains the rationale or objective behind the structure described in Statement-I. Therefore, Statement-II is the correct explanation for Statement-I.

• Question 2 of 5 2. Question Consider the following pairs: List-I (Economic Term) List-II (Brief Description) Stagflation A. A situation of high inflation combined with high unemployment and stagnant demand. Disinflation B. A decrease in the rate of inflation. Deflation C. A general decline in prices for goods and services. Skewflation D. A significant price rise in one or a small group of commodities. How many of the above pairs are correctly matched? (a) Only one (b) Only two (c) Only three (d) All four Correct Solution: D Stagflation: It describes an economic condition characterized by slow economic growth (stagnation), high unemployment, and rising prices (inflation) occurring simultaneously. Disinflation: It refers to a situation where the rate of inflation decreases over time, but remains positive. For example, inflation falling from 5% to 3%. Deflation: It is a sustained decrease in the general price level of goods and services, meaning inflation is negative. Skewflation: This term describes a situation where there is a significant and persistent price rise in one or a small group of commodities (e.g., specific food items) while prices for other goods and services in the economy remain relatively stable or rise much less. Incorrect Solution: D Stagflation: It describes an economic condition characterized by slow economic growth (stagnation), high unemployment, and rising prices (inflation) occurring simultaneously. Disinflation: It refers to a situation where the rate of inflation decreases over time, but remains positive. For example, inflation falling from 5% to 3%. Deflation: It is a sustained decrease in the general price level of goods and services, meaning inflation is negative. Skewflation: This term describes a situation where there is a significant and persistent price rise in one or a small group of commodities (e.g., specific food items) while prices for other goods and services in the economy remain relatively stable or rise much less.

#### 2. Question

Consider the following pairs:

List-I (Economic Term) List-II (Brief Description)

• Stagflation A. A situation of high inflation combined with high unemployment and stagnant demand.

• Disinflation B. A decrease in the rate of inflation.

• Deflation C. A general decline in prices for goods and services.

• Skewflation D. A significant price rise in one or a small group of commodities.

How many of the above pairs are correctly matched?

• (a) Only one

• (b) Only two

• (c) Only three

• (d) All four

Solution: D

• Stagflation: It describes an economic condition characterized by slow economic growth (stagnation), high unemployment, and rising prices (inflation) occurring simultaneously.

• Disinflation: It refers to a situation where the rate of inflation decreases over time, but remains positive. For example, inflation falling from 5% to 3%.

• Deflation: It is a sustained decrease in the general price level of goods and services, meaning inflation is negative.

• Skewflation: This term describes a situation where there is a significant and persistent price rise in one or a small group of commodities (e.g., specific food items) while prices for other goods and services in the economy remain relatively stable or rise much less.

Solution: D

• Stagflation: It describes an economic condition characterized by slow economic growth (stagnation), high unemployment, and rising prices (inflation) occurring simultaneously.

• Disinflation: It refers to a situation where the rate of inflation decreases over time, but remains positive. For example, inflation falling from 5% to 3%.

• Deflation: It is a sustained decrease in the general price level of goods and services, meaning inflation is negative.

• Question 3 of 5 3. Question Match List-I (Type of Market) with List-II (Characteristic Feature) List-I (Type of Market) List-II (Characteristic Feature) Perfect Competition 1. Single seller, unique product with no close substitutes. Monopoly 2. Few sellers, interdependent decision-making. Monopolistic Competition 3. Many sellers, differentiated products. Oligopoly 4. Many sellers, homogeneous product, free entry and exit. Select the correct answer using the code given below: (a) A-1, B-4, C-3, D-2 (b) A-4, B-1, C-2, D-3 (c) A-4, B-1, C-3, D-2 (d) A-3, B-2, C-4, D-1 Correct Solution: C Perfect Competition (A) is characterized by a large number of buyers and sellers dealing in a homogeneous product, with free entry and exit of firms, and perfect information. This matches with 4. Monopoly (B) is a market structure where there is a single seller controlling the entire supply of a unique product that has no close substitutes. This matches with 1. Monopolistic Competition (C) features many sellers offering differentiated products (similar but not identical, e.g., through branding, quality, or design). There is also relative ease of entry and exit. This matches with 3. Oligopoly (D) is a market dominated by a few large sellers. A key characteristic is the interdependence of firms in their decision-making regarding price, output, and advertising, as the actions of one firm significantly impact others. This matches with 2. Therefore, the correct matching is A-4, B-1, C-3, D-2. Incorrect Solution: C Perfect Competition (A) is characterized by a large number of buyers and sellers dealing in a homogeneous product, with free entry and exit of firms, and perfect information. This matches with 4. Monopoly (B) is a market structure where there is a single seller controlling the entire supply of a unique product that has no close substitutes. This matches with 1. Monopolistic Competition (C) features many sellers offering differentiated products (similar but not identical, e.g., through branding, quality, or design). There is also relative ease of entry and exit. This matches with 3. Oligopoly (D) is a market dominated by a few large sellers. A key characteristic is the interdependence of firms in their decision-making regarding price, output, and advertising, as the actions of one firm significantly impact others. This matches with 2. Therefore, the correct matching is A-4, B-1, C-3, D-2.

#### 3. Question

Match List-I (Type of Market) with List-II (Characteristic Feature)

List-I (Type of Market) List-II (Characteristic Feature)

• Perfect Competition 1. Single seller, unique product with no close substitutes.

• Monopoly 2. Few sellers, interdependent decision-making.

• Monopolistic Competition 3. Many sellers, differentiated products.

• Oligopoly 4. Many sellers, homogeneous product, free entry and exit.

Select the correct answer using the code given below:

• (a) A-1, B-4, C-3, D-2

• (b) A-4, B-1, C-2, D-3

• (c) A-4, B-1, C-3, D-2

• (d) A-3, B-2, C-4, D-1

Solution: C

• Perfect Competition (A) is characterized by a large number of buyers and sellers dealing in a homogeneous product, with free entry and exit of firms, and perfect information. This matches with 4.

• Monopoly (B) is a market structure where there is a single seller controlling the entire supply of a unique product that has no close substitutes. This matches with 1.

• Monopolistic Competition (C) features many sellers offering differentiated products (similar but not identical, e.g., through branding, quality, or design). There is also relative ease of entry and exit. This matches with 3.

Oligopoly (D) is a market dominated by a few large sellers. A key characteristic is the interdependence of firms in their decision-making regarding price, output, and advertising, as the actions of one firm significantly impact others. This matches with 2. Therefore, the correct matching is A-4, B-1, C-3, D-2.

Solution: C

• Monopoly (B) is a market structure where there is a single seller controlling the entire supply of a unique product that has no close substitutes. This matches with 1.

• Question 4 of 5 4. Question Consider the following statements regarding the National Infrastructure Pipeline (NIP): The NIP aims to provide world-class infrastructure across the country and improve the quality of life for all citizens. Projects under NIP are funded exclusively by the Central Government. The NIP covers a wide range of sectors including energy, roads, railways, and urban infrastructure. How many of the above statements is/are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: B Statement 1 is correct: The National Infrastructure Pipeline (NIP) was launched with the vision to provide world-class infrastructure across various sectors in India, thereby improving the ease of living, creating jobs, and enhancing overall economic competitiveness. Statement 2 is incorrect: The funding for NIP projects is envisaged through a combination of sources, including the Central Government, State Governments, and the private sector. It is not exclusively funded by the Central Government; a significant portion is expected from state and private investments. Statement 3 is correct: The NIP encompasses a broad array of infrastructure sectors, including energy (power, renewables), roads, railways, ports, airports, urban infrastructure (water supply, sanitation, housing), irrigation, digital infrastructure, and social infrastructure (health, education). Incorrect Solution: B Statement 1 is correct: The National Infrastructure Pipeline (NIP) was launched with the vision to provide world-class infrastructure across various sectors in India, thereby improving the ease of living, creating jobs, and enhancing overall economic competitiveness. Statement 2 is incorrect: The funding for NIP projects is envisaged through a combination of sources, including the Central Government, State Governments, and the private sector. It is not exclusively funded by the Central Government; a significant portion is expected from state and private investments. Statement 3 is correct: The NIP encompasses a broad array of infrastructure sectors, including energy (power, renewables), roads, railways, ports, airports, urban infrastructure (water supply, sanitation, housing), irrigation, digital infrastructure, and social infrastructure (health, education).

#### 4. Question

Consider the following statements regarding the National Infrastructure Pipeline (NIP):

• The NIP aims to provide world-class infrastructure across the country and improve the quality of life for all citizens.

• Projects under NIP are funded exclusively by the Central Government.

• The NIP covers a wide range of sectors including energy, roads, railways, and urban infrastructure.

How many of the above statements is/are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: B

• Statement 1 is correct: The National Infrastructure Pipeline (NIP) was launched with the vision to provide world-class infrastructure across various sectors in India, thereby improving the ease of living, creating jobs, and enhancing overall economic competitiveness.

• Statement 2 is incorrect: The funding for NIP projects is envisaged through a combination of sources, including the Central Government, State Governments, and the private sector. It is not exclusively funded by the Central Government; a significant portion is expected from state and private investments.

• Statement 3 is correct: The NIP encompasses a broad array of infrastructure sectors, including energy (power, renewables), roads, railways, ports, airports, urban infrastructure (water supply, sanitation, housing), irrigation, digital infrastructure, and social infrastructure (health, education).

Solution: B

• Question 5 of 5 5. Question With reference to the concept of ‘Sustainable Development Goals (SDGs)’, consider the following statements: The SDGs were adopted by all United Nations Member States in 2015 as part of the 2030 Agenda for Sustainable Development. There are 17 SDGs which are an urgent call for action by all countries – developed and developing – in a global partnership. The SDGs are legally binding on member states, with penalties for non-achievement. How many of the above statements is/are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: B Statement 1 is correct: The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030. They are part of the 2030 Agenda for Sustainable Development. Statement 2 is correct: There are 17 interconnected SDGs that address global challenges, including poverty, hunger, health, education, climate change, gender equality, water, sanitation, energy, environment, and social justice. They recognize that action in one area will affect outcomes in others and that development must balance social, economic, and environmental sustainability. Statement 3 is incorrect: The SDGs are not legally binding on member states. They represent a global consensus and a political commitment by countries to work towards achieving these goals. Progress is monitored through voluntary national reviews, but there are no legal penalties for non-achievement. Incorrect Solution: B Statement 1 is correct: The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030. They are part of the 2030 Agenda for Sustainable Development. Statement 2 is correct: There are 17 interconnected SDGs that address global challenges, including poverty, hunger, health, education, climate change, gender equality, water, sanitation, energy, environment, and social justice. They recognize that action in one area will affect outcomes in others and that development must balance social, economic, and environmental sustainability. Statement 3 is incorrect: The SDGs are not legally binding on member states. They represent a global consensus and a political commitment by countries to work towards achieving these goals. Progress is monitored through voluntary national reviews, but there are no legal penalties for non-achievement.

#### 5. Question

With reference to the concept of ‘Sustainable Development Goals (SDGs)’, consider the following statements:

• The SDGs were adopted by all United Nations Member States in 2015 as part of the 2030 Agenda for Sustainable Development.

• There are 17 SDGs which are an urgent call for action by all countries – developed and developing – in a global partnership.

• The SDGs are legally binding on member states, with penalties for non-achievement.

How many of the above statements is/are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: B

• Statement 1 is correct: The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030. They are part of the 2030 Agenda for Sustainable Development.

• Statement 2 is correct: There are 17 interconnected SDGs that address global challenges, including poverty, hunger, health, education, climate change, gender equality, water, sanitation, energy, environment, and social justice. They recognize that action in one area will affect outcomes in others and that development must balance social, economic, and environmental sustainability.

• Statement 3 is incorrect: The SDGs are not legally binding on member states. They represent a global consensus and a political commitment by countries to work towards achieving these goals. Progress is monitored through voluntary national reviews, but there are no legal penalties for non-achievement.

Solution: B

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