UPSC Static Quiz – Economy : 30 November 2024

UPSC Static Quiz – Economy : 30 November 2024 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.

Why Participate in the UPSC Static Quiz?

Participating in daily quizzes helps reinforce your knowledge and identify areas that need improvement. Regular practice will enhance your recall abilities and boost your confidence for the examination. By covering various topics throughout the week, you ensure a comprehensive revision of the syllabus.

#### Quiz-summary

0 of 5 questions completed

Questions:

#### Information

Best of 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 5 questions answered correctly

Your time:

Time has elapsed

You have reached 0 of 0 points, (0)

#### Categories

• Not categorized 0%

• Question 1 of 5 1. Question Consider the following statements. A loan turns into a nonperforming asset (NPA), if the interest or instalment remains unpaid for a period of more than 60 days. To avoid classifying a loan as an NPA, banks adopt the evergreening of loans. An accommodative monetary policy strictly restrict banks from indulging in evergreening of loans. Which of the above statements is/are correct? a) 2 only b) 1 and 2 only c) 1 and 3 only d) 1, 2 and 3 Correct Solution: a) The process of evergreening of loans, a form of zombie lending, is typically a temporary fix for a bank. If an account turns into a non-performing asset (NPA), banks are required to make higher provisions which will impact their profitability. A loan turns into a nonperforming asset, or NPA, if the interest or instalment remains unpaid even after the due date — and remains unpaid for a period of more than 90 days. So, to avoid classifying a loan as an NPA, banks adopt the evergreening of loans. In the past, many banks had indulged in dressing up bad loans and given additional funds to companies who didn’t have the capacity to repay. An accommodative monetary policy creates an enabling environment for weak banks to evergreen loans to zombies and keeps them alive. The RBI has been following an accommodative policy since March 2020 when the pandemic struck the country. Most of the Incorrect Solution: a) The process of evergreening of loans, a form of zombie lending, is typically a temporary fix for a bank. If an account turns into a non-performing asset (NPA), banks are required to make higher provisions which will impact their profitability. A loan turns into a nonperforming asset, or NPA, if the interest or instalment remains unpaid even after the due date — and remains unpaid for a period of more than 90 days. So, to avoid classifying a loan as an NPA, banks adopt the evergreening of loans. In the past, many banks had indulged in dressing up bad loans and given additional funds to companies who didn’t have the capacity to repay. An accommodative monetary policy creates an enabling environment for weak banks to evergreen loans to zombies and keeps them alive. The RBI has been following an accommodative policy since March 2020 when the pandemic struck the country. Most of the

#### 1. Question

Consider the following statements.

• A loan turns into a nonperforming asset (NPA), if the interest or instalment remains unpaid for a period of more than 60 days.

• To avoid classifying a loan as an NPA, banks adopt the evergreening of loans.

• An accommodative monetary policy strictly restrict banks from indulging in evergreening of loans.

Which of the above statements is/are correct?

• b) 1 and 2 only

• c) 1 and 3 only

• d) 1, 2 and 3

Solution: a)

The process of evergreening of loans, a form of zombie lending, is typically a temporary fix for a bank. If an account turns into a non-performing asset (NPA), banks are required to make higher provisions which will impact their profitability. A loan turns into a nonperforming asset, or NPA, if the interest or instalment remains unpaid even after the due date — and remains unpaid for a period of more than 90 days.

So, to avoid classifying a loan as an NPA, banks adopt the evergreening of loans. In the past, many banks had indulged in dressing up bad loans and given additional funds to companies who didn’t have the capacity to repay.

An accommodative monetary policy creates an enabling environment for weak banks to evergreen loans to zombies and keeps them alive. The RBI has been following an accommodative policy since March 2020 when the pandemic struck the country. Most of the

Solution: a)

• Question 2 of 5 2. Question The central belief of Keynesian economics is that: a) The government intervention cannot stabilize the economy. b) The government intervention can stabilize the economy. c) Higher taxes are required to stimulate demand and pull economy out of depression. d) None of the above is correct in this regard. Correct Solution: b) Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output, employment, and inflation. It was developed by British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. The central belief of Keynesian economics is that government intervention can stabilize the economy. Keynes’ theory was the first to sharply separate the study of economic behavior and individual incentives from the study of broad aggregate variables and constructs. Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression. Incorrect Solution: b) Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output, employment, and inflation. It was developed by British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. The central belief of Keynesian economics is that government intervention can stabilize the economy. Keynes’ theory was the first to sharply separate the study of economic behavior and individual incentives from the study of broad aggregate variables and constructs. Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression.

#### 2. Question

The central belief of Keynesian economics is that:

• a) The government intervention cannot stabilize the economy.

• b) The government intervention can stabilize the economy.

• c) Higher taxes are required to stimulate demand and pull economy out of depression.

• d) None of the above is correct in this regard.

Solution: b)

Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output, employment, and inflation. It was developed by British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression.

The central belief of Keynesian economics is that government intervention can stabilize the economy. Keynes’ theory was the first to sharply separate the study of economic behavior and individual incentives from the study of broad aggregate variables and constructs.

Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression.

Solution: b)

Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression.

• Question 3 of 5 3. Question Which of the following provides an accurate definition of the term ‘monopsony’? a) A single entity serving as the sole supplier of a specific commodity or service. b) An industry controlled by a few major suppliers. c) An industry dominated by a small group of buyers. d) A single buyer having significant control over the market. Correct Solution: d) A monopsony occurs when a market is characterized by the presence of just one buyer, known as the monopsonist. This market structure empowers the monopsonist to wield significant influence as the primary purchaser of goods and services from numerous potential sellers. An oligopoly, on the other hand, arises when a small number of firms hold sway over a market. When a market is primarily controlled by a handful of companies, it is considered highly concentrated. In contrast, a monopoly occurs when a single firm is the exclusive producer of goods or services without any near equivalents or substitutes. Incorrect Solution: d) A monopsony occurs when a market is characterized by the presence of just one buyer, known as the monopsonist. This market structure empowers the monopsonist to wield significant influence as the primary purchaser of goods and services from numerous potential sellers. An oligopoly, on the other hand, arises when a small number of firms hold sway over a market. When a market is primarily controlled by a handful of companies, it is considered highly concentrated. In contrast, a monopoly occurs when a single firm is the exclusive producer of goods or services without any near equivalents or substitutes.

#### 3. Question

Which of the following provides an accurate definition of the term ‘monopsony’?

• a) A single entity serving as the sole supplier of a specific commodity or service.

• b) An industry controlled by a few major suppliers.

• c) An industry dominated by a small group of buyers.

• d) A single buyer having significant control over the market.

Solution: d)

A monopsony occurs when a market is characterized by the presence of just one buyer, known as the monopsonist. This market structure empowers the monopsonist to wield significant influence as the primary purchaser of goods and services from numerous potential sellers.

An oligopoly, on the other hand, arises when a small number of firms hold sway over a market. When a market is primarily controlled by a handful of companies, it is considered highly concentrated.

In contrast, a monopoly occurs when a single firm is the exclusive producer of goods or services without any near equivalents or substitutes.

Solution: d)

An oligopoly, on the other hand, arises when a small number of firms hold sway over a market. When a market is primarily controlled by a handful of companies, it is considered highly concentrated.

In contrast, a monopoly occurs when a single firm is the exclusive producer of goods or services without any near equivalents or substitutes.

• Question 4 of 5 4. Question Which of the following constitute the ‘Public debt’ of India? Liabilities of Central Government contracted against the Consolidated Fund of India Liabilities that are accrued through transactions associated with the Public Account Select the correct answer code: a) 1 only b) 2 only c) Both 1 and 2 d) Neither 1 nor 2 Correct Solution: a) Public Debt refers to the obligations that the Central Government is responsible for, which are incurred against the Consolidated Fund of India, as specified in Article 292 of the Constitution of India. This definition excludes any liabilities that are accrued through transactions associated with the Public Account. Public Debt is further categorized into two primary categories: Internal Debt and External Debt. Internal debt can be divided into marketable and non-marketable securities. Marketable government securities encompass G-secs and T-Bills that are issued through an auction mechanism. Non-marketable securities include intermediate treasury bills issued to state governments, special securities issued to the National Small Savings Fund, among other similar instruments. Incorrect Solution: a) Public Debt refers to the obligations that the Central Government is responsible for, which are incurred against the Consolidated Fund of India, as specified in Article 292 of the Constitution of India. This definition excludes any liabilities that are accrued through transactions associated with the Public Account. Public Debt is further categorized into two primary categories: Internal Debt and External Debt. Internal debt can be divided into marketable and non-marketable securities. Marketable government securities encompass G-secs and T-Bills that are issued through an auction mechanism. Non-marketable securities include intermediate treasury bills issued to state governments, special securities issued to the National Small Savings Fund, among other similar instruments.

#### 4. Question

Which of the following constitute the ‘Public debt’ of India?

• Liabilities of Central Government contracted against the Consolidated Fund of India

• Liabilities that are accrued through transactions associated with the Public Account

Select the correct answer code:

• c) Both 1 and 2

• d) Neither 1 nor 2

Solution: a)

Public Debt refers to the obligations that the Central Government is responsible for, which are incurred against the Consolidated Fund of India, as specified in Article 292 of the Constitution of India. This definition excludes any liabilities that are accrued through transactions associated with the Public Account.

Public Debt is further categorized into two primary categories: Internal Debt and External Debt. Internal debt can be divided into marketable and non-marketable securities. Marketable government securities encompass G-secs and T-Bills that are issued through an auction mechanism. Non-marketable securities include intermediate treasury bills issued to state governments, special securities issued to the National Small Savings Fund, among other similar instruments.

Solution: a)

• Question 5 of 5 5. Question Consider the following statements regarding Follow-on Public Offer (FPO). A follow-on public offer (FPO) is the additional issuance of shares to investors by a company listed on a stock exchange. It is made by a company after the initial public offering (IPO). Companies usually announce FPOs to raise equity or reduce debt. Which of the above statements is/are correct? a) 1 and 2 only b) 1 and 3 only c) 2 and 3 only d) 1, 2 and 3 Correct Solution: d) A follow-on public offer (FPO), also known as a secondary offering, is the additional issuance of shares after the initial public offering (IPO). Companies usually announce FPOs to raise equity or reduce debt. The two main types of FPOs are dilutive—meaning new shares are added—and non-dilutive—meaning existing private shares are sold publicly. Follow-on offerings are also known as secondary offerings. Incorrect Solution: d) A follow-on public offer (FPO), also known as a secondary offering, is the additional issuance of shares after the initial public offering (IPO). Companies usually announce FPOs to raise equity or reduce debt. The two main types of FPOs are dilutive—meaning new shares are added—and non-dilutive—meaning existing private shares are sold publicly. Follow-on offerings are also known as secondary offerings.

#### 5. Question

Consider the following statements regarding Follow-on Public Offer (FPO).

• A follow-on public offer (FPO) is the additional issuance of shares to investors by a company listed on a stock exchange.

• It is made by a company after the initial public offering (IPO).

• Companies usually announce FPOs to raise equity or reduce debt.

Which of the above statements is/are correct?

• a) 1 and 2 only

• b) 1 and 3 only

• c) 2 and 3 only

• d) 1, 2 and 3

Solution: d)

• A follow-on public offer (FPO), also known as a secondary offering, is the additional issuance of shares after the initial public offering (IPO).

• Companies usually announce FPOs to raise equity or reduce debt.

• The two main types of FPOs are dilutive—meaning new shares are added—and non-dilutive—meaning existing private shares are sold publicly.

• Follow-on offerings are also known as secondary offerings.

Solution: d)

• A follow-on public offer (FPO), also known as a secondary offering, is the additional issuance of shares after the initial public offering (IPO).

• Companies usually announce FPOs to raise equity or reduce debt.

• The two main types of FPOs are dilutive—meaning new shares are added—and non-dilutive—meaning existing private shares are sold publicly.

• Follow-on offerings are also known as secondary offerings.

Join our Official Telegram Channel HERE for Motivation and Fast Updates

Join our Twitter Channel HERE

Follow our Instagram Channel HERE

Stay Consistent

Consistency is key in UPSC preparation. By making the UPSC Static Quiz a part of your daily routine, you will steadily improve your knowledge base and exam readiness. Join us every day to tackle new questions and make your journey towards UPSC success more structured and effective.