RBI Grade B ESI Model Paper

RBI GRADE B

EXAM

Economics & Social Issues Model Test Paper

FOR RBI GRADE B EXAM

RBI Grade B ESI Model Paper

RBI Grade B

Economics & Social Issues Model Test Paper

Q.1) According to a recent report by Maple Capital Advisor; what will be the

estimated size of the shared economy in India?

A) 1 Billion dollars

B) 2 Billion dollars

C) 5 Billion dollars

D) 7 billion dollars

E) 10 Billion dollars

Answer: Option B) 2 Billion dollars

Explanation:

• According to a recent report by Maple Capital Advisors, the Shared economy in

India is estimated to be about a $2 billion industry by the end of 2020.

• The sharing economy is an economic model defined as a peer-to-peer (P2P) based

activity of acquiring, providing, or sharing access to goods and services that is often

facilitated by a community-based on-line platform.

• It is used as an umbrella term for many different services, apps, and products.

• The ‘shared economy’ includes segments such as co-working (Awfis, WeWork

India), co-living (Stanza Living, OYO Life, Oxford Caps), shared mobility (Uber, Ola,

Shuttl) and furniture rental (Furlenco, Rentomojo.)

• In this era of growing concern on climate, wastage, resource scarcity and

population intensity (especially in the developing world), the shared economy

seems to be a sustainable, scalable, and efficient form of addressing these

concerns.

Q.2) According to the United Nations Global Compact (UNGC) India study;

Female labour-force participation in India has declined from 34% in 2006 to

________ in 2020.

A) 27.8%

B) 25.7%

C) 20.8%

D) 24.8%

E) 30%

Answer: Option D) 24.8%

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Explanation:

• According to the United Nations Global Compact (UNGC) India study, India is the

only country among the 153 surveyed countries where the economic gender gap

is larger than the political gap.

• Female labour-force participation in India has declined from 34% in 2006 to 24.8%

in 2020.

• According to the report, raising women's participation in the labour force to the

same level as men can boost India's GDP by 27%.

• Globally, 38.7% of employed women are working in agriculture, forestry, and

fisheries, but only 13.8% of landholders are women.

Q.3) Recently, (In July 2020), government has released the Good Clinical

Practice Guidelines Handbook and Prospectus for Fellowship Programme for

International Students (FPIS). Which organization/ministry has launched the

above programme?

A) Ministry of Human Resource Development

B) Central Board of Secondary Education

C) National Board of Examinations

D) National Testing Agency

E) None of the above

Answer: Option C) National Board of Examinations

Explanation:

• National Board of Examinations has launched the Fellowship Programme for

International students from2020.

• National Board of Examination is an autonomous Organization under Ministry of

Health and Family Welfare.

• According to this programme eligible candidates from outside India shall be

allowed to undergo two-year Fellowship programme in NBE accredited hospitals.

• Hospitals already accredited for FNB programme in a specialty for two seats for at

least three years and have undergone three admission cycles are eligible to apply

for training the international students for the Fellowship course in the concerned

specialty.

• It is the first time that International Fellowship Programme has been launched for

International Students from all countries including SAARC Nations at Post MD/MS

level through common Fellowship Entrance Test.

• The students enrolled are called Diplomates of National Board (DNB).

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Q.4) NITI Aayog has presented India’s second Voluntary National Review (VNR)

at the United Nations High-level Political Forum (HLPF) on Sustainable

Development, 2020. According to this, India needs to increase its SDG

spending by an additional ________ of its GDP until 2030.

A) 2.8%

B) 5.4%

C) 7.4%

D) 6.2%

E) 8%

Answer: Option D) 6.2%

Explanation:

• NITI Aayog presented India's second Voluntary National Review (VNR) at the

United Nations High-level Political Forum (HLPF) on Sustainable Development,

2020.

• The Report titled, “Decade of Action: Taking SDGs from Global to Local.”

• According to this, India needs to increase its SDG spending by an additional 6.2%

of its GDP until 2030.

• Voluntary National Review is a comprehensive account of the adoption and

implementation of the Sustainable Development Goals (SDG) 2030 Agenda in

India.

ABOUT United Nations High-level Political Forum:

• The establishment of the United Nations High-level Political Forum on Sustainable

Development (HLPF) was mandated in 2012 by the outcome document of the

United Nations Conference on Sustainable Development (Rio+20), "The Future We

Want"

• The HLPF is the main United Nations platform on sustainable development and it

has a central role in the follow-up and review of the 2030 Agenda for Sustainable

Development the Sustainable Development Goals (SDGs) at the global level.

• The Forum’s first meeting was held in September 2013. It replaced the Commission

on Sustainable Development.

• HQ is in New York, USA.

Q.5) According to a report titled "Trade-related Illicit Financial Flows in 135

Developing Countries: 2008-2017", released by US-based think tank Global

Financial Integrity (GFI). Which country has the highest trade-related illicit

financial flow among over 135 countries escaping the government's tax net

owing to trade-based money laundering tactics?

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A) India

B) China

C) Mexico

D) USA

E) Russia

Answer: Option B) China

Explanation:

• According to a report titled "Trade-related Illicit Financial Flows in 135 Developing

Countries: 2008-2017", released by US-based think tank Global Financial Integrity

(GFI). Five countries with the largest identified value gaps were China followed by

Mexico, India, Russia, and Poland.

• India has the third-highest trade-related illicit financial flow among over 135

countries with $83.5 billion (Rs 6.14 trillion, which is 3.05 per cent of nation's gross

domestic product) escaping the government's tax net owing to trade-based money

laundering tactics

• The GFI classifies as illicit flows funds which are illegally earned, transferred,

and/or utilised across an international border. The primary sources of illicit flows

include grand corruption, commercial tax evasion, and transnational crime.

• Value gap is the amount of trade that was not properly taxed by the governments

of the importers and exporters involved.

• In terms of the value gaps in the bilateral trade between 135 developing countries

and the 36 advanced economies in US dollars, India consistently ranked among the

top ten largest value gaps across the ten-year period.

• Specifically, India registered the 6th largest value gap for the last six years of the

ten-year period and ranked 6th in terms of the largest average size of the value

gaps among the 135 developing countries over the ten-year period.

Q.6) According to the data released by the Controller General of Accounts the

Centre’s fiscal deficit for the first three months of the FY 2020-21 was Rs. 6.62

lakh crore. According to the Union Budget 2020, what is the fiscal deficit target

for the FY21?

A) 3.3% of GDP

B) 3.1% of GDP

C) 3.8% of GDP

D) 3% of GDP

E) None of the above

Answer: Option E) None of the above

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Explanation:

• Fiscal Deficit = Total Expenditure of the government (capital and revenue

expenditure) – Total income of the government (Revenue receipts + recovery of

loans + other receipts).

• The government meets the FD by borrowing. The total borrowing requirements of

the government in a financial year is equal to the fiscal deficit in that year.

• The Fiscal Responsibility and Budget Management Act, 2003 provides that the

Centre should take appropriate measures to limit the fiscal deficit up to 3% of the

GDP by 31st March 2021.

• The NK Singh committee recommended that the government should target a fiscal

deficit of 3% of the GDP in years up to March 31, 2020 cut it to 2.8% in 2020-21

and to 2.5% by 2023.

• According to the Union Budget, the Fiscal deficit target set by the government is

3.5% of the GDP.

Q.7) The Index of Industrial Production (IIP) is an index that shows the growth

rates in different industry groups of the economy in a fixed period of time. The

index is released with a time lag of how many weeks.

A) 4 weeks

B) 6 weeks

C) 8 weeks

D) 2 weeks

E) None of the above

Answer: Option B) 6 weeks

Explanation:

• The Index of Industrial Production (IIP) is an index which shows the growth rates

in different industry groups of the economy in a stipulated period of time.

• The current base year is 2011-2012.

• The IIP index is computed and published by the Central Statistical Organisation

(CSO) monthly. CSO became NSO in 2019

• The index is released with a time lag of 6 weeks.

Q.8) Long Term Reverse Repo Operation (LTRO) is a mechanism to facilitate

the transmission of monetary policy actions and the flow of credit to the

economy. The funds through LTRO are provided at which rate to the banks?

A) Bank Rate

B) Reverse Repo Rate

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C) Repo Rate

D) Base Rate

E) Other than the above rates as decided by RBI in consultation with central

government.

Answer: Option C) Repo Rate

Explanation:

• Reserve Bank of India (RBI) introduced a tool called long-term repo operation

(LTRO) to inject liquidity in the system, as well as to ensure transmission of rates.

• Under LTRO, RBI provides longer term (one- to three-year) loans to banks at the

prevailing repo rate

• As banks get long-term funds at lower rates, their cost of funds falls. In turn, they

reduce interest rates for borrowers.

• LTRO helped RBI ensure that banks reduce their marginal cost of funds-based

lending rate without reducing policy rates

• According to the RBI, the LTRO scheme will be in addition to the existing Liquidity

Adjustment Facility (LAF) and the Marginal Standing Facility (MSF) operations.

• The LAF and MSF are the two sets of liquidity operations by the RBI with the LAF

having several tools like repo, reverse repo, term repo etc.

• LTROs are conducted on Core Banking Solution (E-KUBER) platform. The operations

would be conducted at a fixed rate.

Q.9) How much fund was approved by the CCEA to be infused in Regional Rural

Banks (RRBs) to improve their capital to risk-weighted assets ratio?

A) 1340 crores

B) 1500 crores

C) 1540 crores

D) 950 crores

E) 1050 crores

Answer: Option A) 1340 crore

Explanation:

• The Cabinet Committee on Economic Affairs approved ₹1,340-crore

recapitalization plan for regional rural banks to improve their capital to riskweighted

assets ratio. The centre share in this is 670 crores.

• The step will help those RRBs which are unable to maintain a minimum CRAR of

9%, as per the regulatory norms prescribed by the RBI.

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Static points about RRBs and Recapitalisation scheme:

• Regional Rural Banks were set up based on the recommendations of the

Narasimham Working Group (1975), as per the Regional Rural Banks Act, 1976.

• Prathama Grameen Bank is the first Regional Rural Bank (RRB).

• The equity of a regional rural bank is held by the Central Government, concerned

State Government and the Sponsor Bank in the proportion of 50:15:35

• The recapitalisation process of RRBs was approved by the cabinet in 2011 based

on the recommendations of a committee set up under the Chairmanship of K.C

Chakrabarty.

• The National Bank for Agriculture and Rural Development (NABARD) identifies

those RRBs, which require recapitalisation assistance to maintain the mandatory

CRAR of 9% based on the CRAR position of RRBs, as on 31st March of every year.

Q.10) The Reserve Bank of India (RBI) has released guidelines for regulating

activities of Payment Aggregators (PAs) and Payment Gateways (PGs) in the

country. According to the guidelines, how much net worth needs to be

achieved by the existing PAs by the end of March 2023?

A) 10 crores

B) 15 crores

C) 20 crores

D) 25 crores

E) 50 crores

Answer: Option D) 25 crores

Explanation:

• The Reserve Bank of India (RBI) has released guidelines for regulating activities of

Payment Aggregators (PAs) and Payment Gateways (PGs) in the country.

• According to the guidelines, existing PAs have to achieve a net worth of ₹15 crore

by 31st March 2021 and a net worth of ₹25 crore on or before 31st March 2023. The

net worth of ₹25 crore has to be maintained at all times thereafter.

• New PAs should have a minimum net worth of ₹15 crore at the time of application

for authorisation and have to attain a net worth of ₹25 crore by the end of the

third financial year of the grant of authorisation. The net worth of ₹25 crore has to

be maintained at all times thereafter.

Q.11) An electronic way bill system offers the technological framework to

track intra-state as well as inter-state movements of goods of value exceeding

Rs. _________ for sales beyond 10 km in the Goods and Services Tax (GST)

regime.

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A) 10,000

B) 25,000

C) 1,00,000

D) 75,000

E) 50,000

Answer: Option E) Rs. 50,000

Explanation:

• An electronic way bill or ‘e-way bill’ system offers the technological framework to

track intra-state as well as inter-state movements of goods of value exceeding Rs

50,000, for sales beyond 10 km in the new Goods and Services Tax (GST) regime.

Under the e-way bill system, there will be no need for a separate transit pass for

every state — one e-way bill will be valid throughout the country for the

movement of goods.

• When an e-way bill is generated, a unique E-way Bill Number (EBN) is allocated and

is available to the supplier, recipient, and the transporter.

• It was launched to

1. Facilitate faster movement of goods.

2. Improve the turnaround time of vehicles.

3. Help the logistics industry by increasing the average distances travelled and

reducing the travel time as well as costs.

• According to notified e-way bill rules, every registered supplier will require prior

online registration on the e-way bill portal for the movement of these goods. The

rules also specify that the permits would be valid for one day for the movement of

goods for 100 km, and in the same proportion for following days.

Q.12) According to the World Economic Outlook report released by

International Monetary Fund (In April 2020), what is the expected growth of

India in 2021?

A) 7.4%

B) 5.8%

C) 6.8%

D) 7%

E) 6%

Answer: Option A) 7.4%

Explanation:

• International Monetary Fund (IMF) has released its World Economic Outlook

(WEO) report.

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• It is usually published twice a year in the months of April and October.

• According to the report, it is expected that the current pandemic (COVID-19) to

cause a -3% change (i.e., a contraction) in global output in 2020, which is much

worse than the 2008-09 financial crises.

• India’s growth is expected to dip to 1.9% in 2020 and rebound to 7.4% in 2021.

Q.13) The RBI has conducted Targeted Long-term Repo Operations (TLTRO 2.0)

for an aggregate amount of Rs 50,000 crore, in instalments of appropriate

sizes. According to RBI, how much percent of these funds will be given to small

and mid-sized NBFCs and Micro Finance Institutions?

A) 20%

B) 25%

C) 30%

D) 50%

E) 75%

Answer: Option D) 50%

Explanation:

• Reserve Bank of India announced TLTRO 2.0 of ₹50,000 crore to ensure that

different segments of financial markets such as non-banking financial companies

(NBFCs) and microfinance institutions (MFIs) to get enough liquidity.

• The RBI is open to increasing this amount beyond ₹50,000 crore.

• The banks have to invest the funds availed under TLTRO 2.0, in investment grade

bonds, commercial paper, and non-convertible debentures of NBFCs.

• RBI stipulated that small and mid-sized NBFCs and Micro Finance Institutions

(MFIs) should receive at least 50% of these funds.

• The investments made by banks under this facility would be classified as ‘Held-to-

Maturity’ (HTM), even in excess of 25% of the total investment permitted to be

included in the HTM portfolio.

Q.14) According to the World Bank Report on the impact of Covid-19 on

migration and remittances, by what percent global remittance will be declined

in 2020?

A) 15%

B) 20%

C) 23%

D) 25%

E) 18%

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Answer: Option B) 20%

Explanation:

• Recently, the World Bank released a report on the impact of Covid-19 on migration

and remittances.

• According to the report, India’s remittances are projected to fall by about 23 % in

2020.

• Globally remittances are projected to decline by about 20 % in 2020.

Q.15) In economics, Fishers effect is the relationship between _________ and

_________.

A) Income and inequality

B) Income and equality

C) Inflation and Economic Growth

D) Inflation and Interest Rate

E) Growth and employment

Answer: Option D) Inflation and Interest Rate

Explanation:

• The Fisher Effect is an economic theory created by economist Irving Fisher that

describes the relationship between inflation and both real and nominal interest

rates.

• The Fisher Effect states that the real interest rate equals the nominal interest rate

minus the expected inflation rate.

• Therefore, real interest rates fall as inflation increases, unless nominal rates

increase at the same rate as inflation.

Q.16) The term J-curve effect is related to which of the following?

A) Inflation

B) Economic growth

C) Balance of trade

D) Sustainable development

E) Unemployment

Answer: Option C) Balance of Trade

Explanation:

• A J-curve is a trendline that shows an initial loss immediately followed by a

dramatic gain.

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• The J-curve effect in economics is used to describe the way that a country’s balance

of trade initially worsens following a devaluation of its currency, then quickly

recovers and finally surpasses its previous performance.

• The J-Curve is related to the Marshall-Lerner condition, which states:

• If (PED x + PED m > 1) then a devaluation will improve the current account.

Q.17) The Government of India has set a target of 175 GW renewable power

installed capacity by the end of _________.

A) 2020

B) 2021

C) 2022

D) 2024

E) 2025

Answer: Option C) 2022

Explanation:

• The Government of India has set a target of installing of installing 175 GW of

renewable energy capacity by the year 2022.

• It includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW

from small hydropower.

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Q.18) In which type of planning there is no need to create new structure,

rather the existing structure is corrected and modified?

A) Functional Planning

B) Indicative Planning

C) Structural Planning

D) Decentralized Planning

E) Democratic Planning

Answer: Option A) Functional Planning

Explanation:

Functional Planning

• Planning attempted within the existing socioeconomic framework is called

functional planning means there is no need to create new structure, rather the

existing structure is corrected and modified.

• Functional planning attempts to modify or improve the existing structure or repair

or rehabilitate it, if it is damaged of disrupted, For example: Indian economy after

the partition.

Indicative Planning

• This type of planning is based on the principle of decentralization in the operation

and execution of the national plans.

• This type of planning is flexible. In this the private sector is neither rigidly controlled

nor directed to fulfill the targets and priorities of the plan. But the private sector is

expected to fulfill the targets for the success of the plan

Structural Planning

• In this the economic system changes radically and a new system emerges.

• This type of planning is revolutionary.

• Examples are: China is following this type of planning.

Decentralized Planning:

• It refers to the execution of the plan from the grass roots.

• In this, a plan is formulated by the central planning authority in consultation with

the different administrative units of the country

Democratic Planning:

• In this, the philosophy of democracy is followed. Since formulation to the

execution of the plan, the people are taken into confidence.

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The purpose of such arrangements is to satisfy different segments of the economy

regarding growth and welfare programmes.

Q.19) According to the Economic Survey 2019-20, how many Ayushman Bharat

Health & Wellness Centres are proposed to be set up by 2022?

A) 1.2 lakh

B) 1.5 lakh

C) 2 lakh

D) 2.5 lakh

E) 1.8 lakh

Answer: Option B) 1.5 lakh

Explanation

• According to the Economic Survey 2019-20, 1.5 lakh Ayushman Bharat Health &

Wellness Centres are proposed to be set up by 2022

• A total of 28,005 such centres have already been set up as on January 14, 2020

• Ayushman Bharat- Pradhan Mantri Jan Arogya Yojana (PM-JAY), the world's largest

health insurance scheme, is a major step towards providing affordable healthcare

to the identified poor

Q.20) Who is the head of the committee constituted by the Reserve Bank of

India to recommend norms for the resolution of COVID-19 related stressed

loans

A) Diwakar Gupta

B) T.N. Manoharan

C) Ashvin Parekh

D) Sunil Mehta

E) K.V Kamath

Answer: Option E) K. V Kamath

Explanation:

• The Reserve Bank of India (RBI) has constituted the expert committee under the

chairmanship of K.V. Kamath.

• It has been constituted to make recommendations on norms for the resolution of

COVID-19 related stressed loans.

• The other members of the committee include

1. Diwakar Gupta

2. T.N. Manoharan

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3. Ashvin Parekh

4. Sunil Mehta

• The Indian Banks’ Association (IBA) would be functioning as the secretariat to the

committee and the committee will be fully empowered to consult or invite any

person it deems fit.

Q.21) The Centre has declared that the technology driven ‘One Nation, One

Ration Card’ system will be fully rolled out in all states and Union Territories

(UTs) by March 2021. As of August 2020, how many states/UTs are parts of the

above initiative?

A) 20

B) 22

C) 25

D) 24

E) 19

Answer: Option D) 24

Explanation:

One Nation One Card Scheme

• In this system, eligible beneficiaries would be able to avail entitled food grains

under the National Food Security Act (NFSA) from any Fair Price Shop (FPSs) in the

country using the same ration card.

• The eligible beneficiaries will be able to buy subsidized food grains, rice at ₹3 per

kg, wheat at ₹2 per kg, and coarse grains at Re 1 per kg, from anywhere in the

country.

• 100 percent of national portability of these cards has been assured by March 31,

2021.

• As on August 2020, 24 states/UTs are part of this scheme.

• These 24 States/UTs are namely Andhra Pradesh, Bihar, Dadra & Nagar Haveli and

Daman & Diu, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir,

Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Mizoram,

Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Telangana, Tripura, Uttar Pradesh

and Uttarakhand.

Q.22) Fiscal Consolidation refers to the policies undertaken by Governments

(national and sub-national levels) to reduce their deficits and accumulation of

debt stock. Which of the following factors will help to improve the Fiscal

Consolidation?

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A) Improve tax revenue

B) Enhance tax-GDP Ratio

C) Better targeting of government subsidies and extending Direct Benefit Transfer

scheme for more subsidies.

D) All are correct

E) None of the above

Answer: Option D) All are correct

Explanation:

• Fiscal Consolidation refers to the policies undertaken by Governments (national

and sub-national levels) to reduce their deficits and accumulation of debt stock.

• The Fiscal Responsibility and Budget Management (FRBM) Act gives the targets for

fiscal consolidation in India. According to FRBM, the government should eliminate

revenue deficit and reduce fiscal deficit to 3% (medium term) of the GDP

• Following measures from the expenditure side and revenue side are envisaged by

the government to achieve fiscal consolidation.

1. Improved tax revenue realization: For this, increasing efficiency of tax

administration by reducing tax avoidance, eliminating tax evasion,

enhancing tax compliance etc. are to be made.

2. Enhancing tax GDP ratio by widening the tax base and minimizing tax

concessions and exemptions also improves tax revenues.

3. Better targeting of government subsidies and extending Direct Benefit

Transfer scheme for more subsidies.

• Augmentation of tax revenue is necessary to bring fiscal consolidation as there are

limitations for reducing government expenditure in India.

Q.23) The national income estimates of GDP are released quarterly by the

_________

A) Ministry of Finance

B) Reserve Bank of India

C) National Statistical Office

D) Department of Commerce and Industry

E) Both A and B

Answer: Option C)

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Explanation:

• The National Income estimates of GDP are released by Central statistics Office

under the Ministry of Statistics and Programme Implementation.

• CSO has five Divisions of which the NAD (National Accounts Division) is responsible

for the preparation of national accounts, which includes Gross Domestic Product,

Government and Private Final Consumption Expenditure, Fixed Capital Formation,

and other macro-economic aggregates.

• CSO became NSO in 2019 by merging CSO with NSSO

Q.24) ATMs which are set up, owned, and operated by non-bank entities are

called White Label ATMs (WLAs). Which services is/are not available at the

WLA?

A) Account information

B) Cash Deposit

C) PIN Change

D) Request for Cheque Book

E) Mini/short Statement

Answer: Option B) Cash Deposit

Explanation:

• Automated Teller Machines (ATMs) set up, owned, and operated by non-bank

entities are called "White Label ATMs" (WLAs).

• Non-bank entities incorporated in India under the Companies Act 1956 can

operate WLAs.

• Government has permitted Foreign Direct Investment (FDI), up to 100%, under the

automatic route.

• Non-bank entities are permitted to set up WLAs in India, after obtaining

authorisation from RBI under the Payment and Settlement Systems (PSS) Act 2007.

• Such non-bank entities should have a minimum net worth of Rs. 100 crores.

Services Provided by the ATMs

• Account Information

• Cash Deposit (Acceptance of deposits are not permitted at WLAs)

• Regular Bills Payment (not permitted at WLAs)

• Purchase of Re-load Vouchers for Mobiles (not permitted at WLAs)

• Mini/Short Statement

• PIN change

• Request for Cheque Book

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Q.25) ‘Universal Account Number’ is used for the portability of ________

which of the following purpose?

A) Saving Bank Account

B) Provident Fund account

C) Aadhar linked Jan Dhan Account

D) National Food Security Programme

E) None of these

Answer: Option B) Provident Fund Account

Explanation:

• The Employees Provident Fund Organisation (EPFO) has introduced the Universal

Account Number (UAN) for members.

• It is a 12-digit number which is provided to each member of the Employees’

Provided Fund Organisation (EPFO) through which he can manage his PF accounts.

• This number is issued by the Ministry of Employment and Labour under the

Government of India.

• It helps the person to get all Provided Fund (PF) information in one place

irrespective of the organization he works for.

• The number allows portability of PF accounts from one employer to another

without depending on any employer for withdrawal of EPF balance.

Q.26) The currency which is easily available in any economy in its forex market

is known as _________.

A) Helicopter Currency

B) Hard Currency

C) Hot Currency

D) Soft Currency

E) Heated Currency

Answer: Option D) Soft Currency

Explanation:

• Soft currency: A term used in the foreign exchange market which denotes the

currency that is easily available in any economy in its forex market. For example,

rupee is a soft currency in the Indian forex market

• Hot currency: signifies currency that quickly and regularly moves between financial

markets that ensures investors lock in the highest available short-term interest

rates. Hot money continuously shifts from countries with low-interest rates to

those with higher rates

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• Heated currency: This term is used in the forex market to denote the domestic

currency which is under enough pressure (heat) of depreciation due to a hard

currency’s high tendency of exiting the economy. It is also known as currency

under heat or under hammering.

• Helicopter Money: Helicopter money is the term used for a large sum of new

money that is printed and distributed among the public, to stimulate the economy

during a recession or when interest rates fall to zero. It is also referred to as a

helicopter drop, about a helicopter scattering supplies from the sky.

• Hard Currency: Hard currencies act as a liquid store of wealth and a safe haven

when domestic currencies struggle. Hard currencies come from countries with

stable economies and political systems.

Q.27) The term Digital Single Market Strategy was in news; the term was

associated with which organization?

A) UNESCO

B) UNICEF

C) European Union

D) G20

E) ASEAN

Answer: Option C) European Union

Explanation:

• The Digital Single Market is a policy belonging to the European Single Market that

covers digital marketing, E-commerce, and telecommunications.

• It was announced in May 2015 by the Juncker Commission

• The EU’s Digital Single Market Strategy is built on three pillars:

1. Access: better access for consumers and businesses to digital goods and

services across Europe.

2. Environment: creating the right conditions and a level playing field for

digital networks and innovative services to flourish.

3. Economy & Society: maximising the growth potential of the digital

economy.

Q.28) It is an agreement entered into between tax authorities and taxpayers

on the future application of transfer pricing policies. It can be an effective

measure for many taxpayers in mitigating transfer pricing risks by ensuring

levels of future profitability are accepted as reasonable by the tax authorities.

Government has introduced the above scheme under which act?

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A) Finance Act, 2018

B) Income Tax Act, 1961

C) Income Tax Act, 2018

D) Finance Act, 2019

E) Finance Act, 2012

Answer: Option E

Explanation:

Advance Pricing Agreement:

• It is an agreement entered into between tax authorities and taxpayers on the

future application of transfer pricing policies.

• It can be an effective measure for many taxpayers in mitigating transfer pricing

risks by ensuring levels of future profitability are accepted as reasonable by the tax

authorities

• The Government has introduced the Advance Pricing Agreement (APA) Scheme

through Finance Act, 2012 and Income Tax (Tenth Amendment) Rules, 2012

• The APA Scheme endeavours to provide certainty to taxpayers in the field of

transfer pricing through an agreement in advance.

• Such agreement is entered into by the CBDT with the approval of the Central

Government, with the taxpayers on the transfer price of international transactions

between associated entities.

• An APA can be one of the three types – unilateral, bilateral, and multilateral.

1. A Unilateral APA is an APA that involves only the taxpayer and the tax

authority of the country where the taxpayer is located.

2. Bilateral APA (BAPA) is an APA that involves the taxpayer, associated

enterprise (AE) of the taxpayer in the foreign country, tax authority of the

country where the taxpayer is located and the foreign tax authority.

3. Multilateral APA (MAPA) is an APA that involves the taxpayer, two or more

AEs of the taxpayer in different foreign countries, tax authority of the

country where the taxpayer is located and the tax authorities of AEs.

Q.29) According to Census 2011, migration in India is least between

__________.

A) Rural to urban (R-U)

B) Rural to Rural (R-R)

C) Urban to Rural (U-R)

D) Urban to Urban (U-U)

E) None of the above

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Answer: Option C) Urban to Rural Areas

Explanation:

• Migrants who move within the boundaries of their own country are known as

internal migrants.

• There are four streams of Internal migration:

1. Rural to urban (R-U)

2. Rural to Rural (R-R)

3. Urban to Rural (U-R)

4. Urban to Urban (U-U)

• As per Census 2011, migration in India is majorly between rural to rural areas

(47.4%), followed by urban to urban areas (22.6%), rural to urban areas (22.1%),

and urban to rural areas (7.9%).

Q.30) Article _______ of the Indian Constitution prohibits discrimination of

Indians on basis of religion, race, caste, sex, or place of birth.

A) Article 12

B) Article 13

C) Article 14

D) Article 15

E) Article 11

Answer: Option D) Article 15

Explanation:

Provisions under Article 15:

Article 15(1): It prohibits the state from discriminating against a citizen on grounds of

religion, race, caste, sex, place of birth.

Article 15 (2): Article 15(2) elaborates that no Indian citizen can be discriminated against

on basis of religion, race, caste, sex, place of birth. It states that no citizen shall be denied

access to shops, public restaurants, hotels, and palaces of public entertainment. Article

15 (3) and (4): The Article also states that the article cannot be used as an argument to

make special provisions for women, children, or any other backward classes.

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Q.31) According to Census 2011which state has the highest urban population?

A) Uttar Pradesh

B) Maharashtra

C) Gujarat

D) Haryana

E) Madhya Pradesh

Answer: Option B) Maharashtra

Explanation:

• The Census 2011 is the 15th National census survey conducted by the Census

Organization of India.

• Mr. C. Chandramouli is the Commissioner & Registrar General of the Indian 2011

Census.

• According to the Census 2011, Maharashtra has the highest urban population

while Uttar Pradesh has the highest rural population

Passage (Q.32-Q34)

To improve farm gate prices and grower incomes, government has launched a new

scheme to give a leg up to post-harvest management and marketing of agricultural

produce. The scheme will provide better warehousing and cold storage facilities for

farmers, Modi said, adding that it will also help create new jobs as food processing and

post-harvest facilities are set up in rural India. Under the infrastructure scheme, banks

and financial institutions will provide in loans to cooperative societies, farmer producer

companies, self-help groups, entrepreneurs, start-ups, and infrastructure providers. The

objective is to provide medium-to-long term debt financing for post-harvest

infrastructure and community assets for marketing of farm produce.

Q.32) Under the scheme, how much fund will be provided by banks and

financial institutions as loans to Primary Agricultural Credit Societies (PACS),

Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Self

Help Group (SHG)?

A) 1,000 crores

B) 10,000 crores

C) 1,00,000 crores

D) 50,000 crores

E) 75,000 crores

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Answer: Option C) 1,00,000 crores

Explanation:

• The scheme mentioned in the above passage is Agricultural Infrastructure Fund

scheme.

• It was launched in 2020. It is a part of the over Rs. 20 lakh crore packages

announced by the Finance Minister in response to the COVID-19 crises

• The scheme shall provide a medium - long term debt financing facility for

investment in viable projects for post-harvest management Infrastructure and

community farming assets through interest subvention and financial support.

• Under the scheme, Rs. One Lakh Crore will be provided by banks and financial

institutions as loans to Primary Agricultural Credit Societies (PACS), Marketing

Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Group

(SHG), Farmers, Joint Liability Groups (JLG), Multipurpose Cooperative Societies,

Agri-entrepreneurs, Startups, Aggregation Infrastructure Providers and

Central/State agency or Local Body sponsored Public Private Partnership Project.