UPSC Static Quiz – Economy : 8 November 2025

UPSC Static Quiz – Economy : 8 November 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 Agreement on Investment Facilitation for Development (IFA). The Agreement on Investment Facilitation for Development (IFA) is a WTO-negotiated agreement designedto create a more investor-friendly business environment. It is aimed at liberalising investment policies and to simplify investment procedures. It cover areas like market access, government procurement and investor-state dispute settlement (ISDS). How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: A Only Statement 1 is correct. The Agreement on Investment Facilitation for Development (IFA) is a WTO-negotiated agreement designed to create a more investor-friendly business environmentby simplifying investment procedures and promoting transparency and predictability for foreign direct investment (FDI), particularly in developing and least-developed countries. It is meant to create legally binding provisions aimed at facilitating investment flows. What IFA doesn’t cover? IFA does not cover areas like market access, investment protection, government procurement, specific subsidies, or investor-state dispute settlement (ISDS). In essence, the IFA is not aimed at liberalising investment policies. Its objective is to simplify investment procedures. Incorrect Solution: A Only Statement 1 is correct. The Agreement on Investment Facilitation for Development (IFA) is a WTO-negotiated agreement designed to create a more investor-friendly business environmentby simplifying investment procedures and promoting transparency and predictability for foreign direct investment (FDI), particularly in developing and least-developed countries. It is meant to create legally binding provisions aimed at facilitating investment flows. What IFA doesn’t cover? IFA does not cover areas like market access, investment protection, government procurement, specific subsidies, or investor-state dispute settlement (ISDS). In essence, the IFA is not aimed at liberalising investment policies. Its objective is to simplify investment procedures.

#### 1. Question

Consider the following statements regarding Agreement on Investment Facilitation for Development (IFA).

• The Agreement on Investment Facilitation for Development (IFA) is a WTO-negotiated agreement designedto create a more investor-friendly business environment.

• It is aimed at liberalising investment policies and to simplify investment procedures.

• It cover areas like market access, government procurement and investor-state dispute settlement (ISDS).

How many of the above statements are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: A

Only Statement 1 is correct.

• The Agreement on Investment Facilitation for Development (IFA) is a WTO-negotiated agreement designed to create a more investor-friendly business environmentby simplifying investment procedures and promoting transparency and predictability for foreign direct investment (FDI), particularly in developing and least-developed countries.

• It is meant to create legally binding provisions aimed at facilitating investment flows.

What IFA doesn’t cover?

• IFA does not cover areas like market access, investment protection, government procurement, specific subsidies, or investor-state dispute settlement (ISDS).

• In essence, the IFA is not aimed at liberalising investment policies. Its objective is to simplify investment procedures.

Solution: A

Only Statement 1 is correct.

• The Agreement on Investment Facilitation for Development (IFA) is a WTO-negotiated agreement designed to create a more investor-friendly business environmentby simplifying investment procedures and promoting transparency and predictability for foreign direct investment (FDI), particularly in developing and least-developed countries.

• It is meant to create legally binding provisions aimed at facilitating investment flows.

What IFA doesn’t cover?

• IFA does not cover areas like market access, investment protection, government procurement, specific subsidies, or investor-state dispute settlement (ISDS).

• In essence, the IFA is not aimed at liberalising investment policies. Its objective is to simplify investment procedures.

• Question 2 of 5 2. Question Consider the following statements. A company or business is said to be “over leveraged” if it has unsustainably high debt against its operating cash flows and equity. An over leveraged company would find it difficult to make interest and principal repayments to its creditors. An over leveraged company will always become bankrupt. How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: B Statement 3 is incorrect. A company or business is said to be “over leveraged” if it has unsustainably high debt against its operating cash flows and equity. Such a company would find it difficult to make interest and principal repayments to its creditors, and may struggle to meet its operating expenses as well. In the latter case, the company may be forced to borrow even more just to keep going, and thus enter a vicious cycle. This situation can ultimately lead to the company going bankrupt. Incorrect Solution: B Statement 3 is incorrect. A company or business is said to be “over leveraged” if it has unsustainably high debt against its operating cash flows and equity. Such a company would find it difficult to make interest and principal repayments to its creditors, and may struggle to meet its operating expenses as well. In the latter case, the company may be forced to borrow even more just to keep going, and thus enter a vicious cycle. This situation can ultimately lead to the company going bankrupt.

#### 2. Question

Consider the following statements.

• A company or business is said to be “over leveraged” if it has unsustainably high debt against its operating cash flows and equity.

• An over leveraged company would find it difficult to make interest and principal repayments to its creditors.

• An over leveraged company will always become bankrupt.

How many of the above statements are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: B

Statement 3 is incorrect.

A company or business is said to be “over leveraged” if it has unsustainably high debt against its operating cash flows and equity. Such a company would find it difficult to make interest and principal repayments to its creditors, and may struggle to meet its operating expenses as well. In the latter case, the company may be forced to borrow even more just to keep going, and thus enter a vicious cycle. This situation can ultimately lead to the company going bankrupt.

Solution: B

Statement 3 is incorrect.

A company or business is said to be “over leveraged” if it has unsustainably high debt against its operating cash flows and equity. Such a company would find it difficult to make interest and principal repayments to its creditors, and may struggle to meet its operating expenses as well. In the latter case, the company may be forced to borrow even more just to keep going, and thus enter a vicious cycle. This situation can ultimately lead to the company going bankrupt.

• Question 3 of 5 3. Question Consider the following statements. Free Trade Agreement (FTA) is always bilateral and not multilateral. Under a free trade policy, Goods and services can be bought and sold across international borders with little or no government tariffs, quotas and subsidies. The concept of free trade is the opposite of trade protectionismor economic isolationism. 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 incorrect. What is an FTA? FTA is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy: Goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. Protectionism: The concept of free trade is the opposite of trade protectionism or economic isolationism. FTAs can be categorized as: Preferential Trade Agreement (PTA) Comprehensive Economic Cooperation Agreement (CECA) Comprehensive Economic Partnership Agreement (CEPA) Incorrect Solution: B Statement 1 is incorrect. What is an FTA? FTA is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy: Goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. Protectionism: The concept of free trade is the opposite of trade protectionism or economic isolationism. FTAs can be categorized as: Preferential Trade Agreement (PTA) Comprehensive Economic Cooperation Agreement (CECA) Comprehensive Economic Partnership Agreement (CEPA)

#### 3. Question

Consider the following statements.

• Free Trade Agreement (FTA) is always bilateral and not multilateral.

• Under a free trade policy, Goods and services can be bought and sold across international borders with little or no government tariffs, quotas and subsidies.

• The concept of free trade is the opposite of trade protectionismor economic isolationism.

How many of the above statements is/are correct?

• a) Only one

• b) Only two

• c) All three

Solution: B

Statement 1 is incorrect.

What is an FTA?

• FTA is a pact between two or more nations to reduce barriers to imports and exports among them.

• Under a free trade policy: Goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

• Protectionism: The concept of free trade is the opposite of trade protectionism or economic isolationism.

FTAs can be categorized as:

• Preferential Trade Agreement (PTA)

• Comprehensive Economic Cooperation Agreement (CECA)

• Comprehensive Economic Partnership Agreement (CEPA)

Solution: B

Statement 1 is incorrect.

What is an FTA?

• FTA is a pact between two or more nations to reduce barriers to imports and exports among them.

• Under a free trade policy: Goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

• Protectionism: The concept of free trade is the opposite of trade protectionism or economic isolationism.

FTAs can be categorized as:

• Preferential Trade Agreement (PTA)

• Comprehensive Economic Cooperation Agreement (CECA)

• Comprehensive Economic Partnership Agreement (CEPA)

• Question 4 of 5 4. Question Free Trade Agreement (FTA) covers which of the following? Investment promotion, facilitation, and protection. Digital issues such as data localisation Rules on services trade Intellectual property rights How many of the above statements is/are correct? a) Only one b) Only two c) Only three d) All four Correct Solution: D What does FTA cover? Tariff reduction impacting the entire manufacturing and the agricultural sector Rules on services trade Digital issues such as data localisation Intellectual property rights that may have an impact on the accessibility of drugs Investment promotion, facilitation, and protection. Incorrect Solution: D What does FTA cover? Tariff reduction impacting the entire manufacturing and the agricultural sector Rules on services trade Digital issues such as data localisation Intellectual property rights that may have an impact on the accessibility of drugs Investment promotion, facilitation, and protection.

#### 4. Question

Free Trade Agreement (FTA) covers which of the following?

• Investment promotion, facilitation, and protection.

• Digital issues such as data localisation

• Rules on services trade

• Intellectual property rights

How many of the above statements is/are correct?

• a) Only one

• b) Only two

• c) Only three

• d) All four

Solution: D

What does FTA cover?

• Tariff reduction impacting the entire manufacturing and the agricultural sector

• Rules on services trade

• Digital issues such as data localisation

• Intellectual property rights that may have an impact on the accessibility of drugs

• Investment promotion, facilitation, and protection.

Solution: D

What does FTA cover?

• Tariff reduction impacting the entire manufacturing and the agricultural sector

• Rules on services trade

• Digital issues such as data localisation

• Intellectual property rights that may have an impact on the accessibility of drugs

• Investment promotion, facilitation, and protection.

• Question 5 of 5 5. Question In India, Stamp duties can be levied on which of the following? promissory notes letters of credit policies of insurance transfer of shares cheques How many of the above options is/are correct? a) Only two b) Only three c) Only four d) All five Correct Solution: D Stamp duties in India are a form of tax levied on legal documents, financial instruments, and certain transactions, governed by the Indian Stamp Act, 1899. Stamp duties are applicable to cheques as financial instruments under the Indian Stamp Act. Letters of credit, which are important financial instruments in trade, are subject to stamp duties. Insurance policies, including life and general insurance, attract stamp duty as per the Act. Stamp duty is levied on the transfer of shares in dematerialized and physical form, as it constitutes a taxable transaction. Promissory notes, a common financial instrument, are subject to stamp duty. Incorrect Solution: D Stamp duties in India are a form of tax levied on legal documents, financial instruments, and certain transactions, governed by the Indian Stamp Act, 1899. Stamp duties are applicable to cheques as financial instruments under the Indian Stamp Act. Letters of credit, which are important financial instruments in trade, are subject to stamp duties. Insurance policies, including life and general insurance, attract stamp duty as per the Act. Stamp duty is levied on the transfer of shares in dematerialized and physical form, as it constitutes a taxable transaction. Promissory notes, a common financial instrument, are subject to stamp duty.

#### 5. Question

In India, Stamp duties can be levied on which of the following?

• promissory notes

• letters of credit

• policies of insurance

• transfer of shares

How many of the above options is/are correct?

• a) Only two

• b) Only three

• c) Only four

• d) All five

Solution: D

Stamp duties in India are a form of tax levied on legal documents, financial instruments, and certain transactions, governed by the Indian Stamp Act, 1899.

• Stamp duties are applicable to cheques as financial instruments under the Indian Stamp Act.

• Letters of credit, which are important financial instruments in trade, are subject to stamp duties.

• Insurance policies, including life and general insurance, attract stamp duty as per the Act.

• Stamp duty is levied on the transfer of shares in dematerialized and physical form, as it constitutes a taxable transaction.

• Promissory notes, a common financial instrument, are subject to stamp duty.

Solution: D

Stamp duties in India are a form of tax levied on legal documents, financial instruments, and certain transactions, governed by the Indian Stamp Act, 1899.

• Stamp duties are applicable to cheques as financial instruments under the Indian Stamp Act.

• Letters of credit, which are important financial instruments in trade, are subject to stamp duties.

• Insurance policies, including life and general insurance, attract stamp duty as per the Act.

• Stamp duty is levied on the transfer of shares in dematerialized and physical form, as it constitutes a taxable transaction.

• Promissory notes, a common financial instrument, are subject to stamp duty.

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