UPSC CSE General Studies Practice Questions - Set 7

61. With reference to the 'Foreign Direct Investment' (FDI) in India, which of the following is considered its major characteristic?

A. It is the investment through capital instruments essentially in a listed company. B. It is a largely non-debt creating capital flow. C. It is the investment which involves debt-servicing. D. It is the investment made by foreign institutional investors in the Government securities.

62. Which of the following is/are the potential consequence(s) of a 'Fiscal Deficit'?
1. Inflationary pressure in the economy.
2. Crowding out of private investment.
3. Increase in the external debt.
Select the correct answer using the code given below:

A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3

63. With reference to 'Convertibility of Rupee', consider the following statements:
1. Indian Rupee is fully convertible on the Current Account.
2. Indian Rupee is fully convertible on the Capital Account.
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

64. The term 'Base Erosion and Profit Shifting' (BEPS) is sometimes seen in the news in the context of:

A. Mining operation by multinational companies in resource-rich but backward areas. B. Curbing of the tax evasion by multinational companies. C. Exploitation of genetic resources of a country by multinational companies. D. Lack of consideration of environmental costs in the planning and implementation of developmental projects.

65. In India, which of the following is/are the mechanism(s) used by RBI to control 'Inflation'?
1. Raising the Repo Rate.
2. Selling Government Securities through Open Market Operations (OMO).
3. Increasing the Cash Reserve Ratio (CRR).
Select the correct answer using the code given below:

A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3

66. The 'Purchasing Power Parity' (PPP) exchange rates are calculated by comparing the prices of:

A. the same basket of goods and services in different countries. B. the gold reserves in different countries. C. the average income per capita in different countries. D. the total exports and imports of different countries.

67. Which of the following is/are part of 'Capital Account' of the Balance of Payments?
1. Foreign Direct Investment (FDI)
2. External Commercial Borrowings (ECB)
3. Remittances
4. Portfolio Investment
Select the correct answer using the code given below:

A. 1, 2 and 4 only B. 2 and 3 only C. 1, 3 and 4 only D. 1, 2, 3 and 4

68. With reference to 'Gini Coefficient', consider the following statements:
1. It is a measure of statistical dispersion intended to represent the income inequality.
2. A Gini coefficient of zero expresses perfect inequality.
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

69. Which of the following is/are the component(s) of 'Core Inflation'?
1. Food prices
2. Fuel prices
3. Manufactured goods prices
Select the correct answer using the code given below:

A. 1 and 2 only B. 3 only C. 1 and 3 only D. 1, 2 and 3

70. In the context of Indian economy, 'Open Market Operations' (OMO) refers to:

A. Borrowing by scheduled banks from the RBI. B. Lending by commercial banks to industry and agriculture. C. Purchase and sale of Government securities by the RBI. D. None of the above.

UPSC CSE General Studies Practice Questions (61-70)