Prelims Powerplay 2022 – Day 52 – Economy + CA

ECONOMY

Q.1) Keynes calls which of the essential ingredient of economics as ‘Animal Spirit’

a)Demand
b)Supply
c)Scarcity
d)Confidence

Answer: d

‘Confidence’, considered as one of the essential ingredients of economic prosperity was called by J. M. Keynes as animal spirit. For Keynes, this is a ‘naive optimism’ by which an entrepreneur puts aside the fact of loss as a healthy man puts aside the expectation of death.

Q.2) Which of the following statements regarding a Contago is false?

a)situation in which the spot or cash price of a commodity is lower than the forward price
b)a bearish indicator
c)A futures contract in contango will normally decrease in value until it equals the spot price of the underlying at maturity
d)Contango is normal for a non-perishable commodity that has a cost of carry.

Answer: b
Contango is thus a bullish indicator, showing that the market expects the price of the futures contract to increase steadily into the future

Q.3) Which of the following are indirect taxes?

1.Union Excise duty
2.Goods and Services Tax
3.Corporation tax
4.Customs duty
Select the correct answer code:

a) 1, 2
b) 1, 2, 3
c) 1, 2, 4
d) 1, 2, 3, 4

Answer: C

Q.4)Which of the following are Non-tax revenue receipts?

1.Profits and dividends
2.Disinvestment proceeds
3.Fees, Penalties and Fines
4.Grants
5.Interests received

Select the correct answer code:

a) 1, 2, 3, 4
b) 1, 3, 4, 5
c) 3, 4, 5
d) 1, 2, 3, 4, 5

Answer: B

Disinvestment proceeds falls under Capital Receipts

Q.5) Consider the following statements regarding Revenue Expenditure.

1.Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or financial assets of the Government.
2.Interest payments on debt incurred by the government and repayment of debt forms the part of Revenue Expenditure.
Which of the above statements is/are correct?

a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Answer: A

Interest payments on debt incurred by the government, and grants given to state governments and other parties may be meant for creation of assets.


Q.6) Consider the following statements regarding Transfer payments.

1.They consist of remittances, gifts and grants.
2.They could be given by the government or by private citizens living abroad.
3.They also include payments made by the government to its employees.
Which of the above statements is/are correct?

a) 1 only
b) 1, 2
c) 1, 3
d) 1, 2, 3

Answer: B

In macroeconomics and finance, a transfer payment is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return.
They are the receipts which the residents of a country get for ‘free’, without having to provide any goods or services in return.
They consist of gifts, remittances and grants.

Q.7)Consider the following statements regarding Methods of Taxation.

1.Proportional taxation have fixed rates for every level of income or production.
2.Regressive taxation has increasing rates of tax for increasing value or volume on which the tax is being imposed.
3.Progressive taxation has decreasing rates of tax for increasing value or volume on which the tax is being imposed.
Which of the above statements is/are correct?

a) 1 only
b) 2, 3
c) 1, 3
d) 1, 2, 3

Answer: A

Regressive taxation: This is just opposite to the progressive method having decreasing rates of tax for increasing value or volume on which the tax is being imposed.

Q.8) Consider the following statements.

1.Counter-cyclical fiscal policy becomes critical during an economic crisis.
2.Counter-cyclical fiscal policy is the one wherein fiscal policy reinforces the business cycle by being expansionary (increase spending/reduce taxes) during good times and contractionary (reduce spending/increase taxes) during recessions.
3.Pro-cyclical fiscal policy stabilizes the business cycle by being contractionary in good times and expansionary during recessions.

Which of the above statements is/are correct?

a) 1 only
b) 1, 3
c) 1, 2
d) 1, 2, 3

Answer: A

While counter-cyclical fiscal policy is necessary to smooth out economic cycles, it becomes critical during an economic crisis

Q.9) Consider the following statements about Socialist economy.

1.It emphasises the collective ownership of the means of production.
2.Its only central goal is to attain economic efficiency by most optimum utilization of factors of production.
Which of the above statements is/are correct?

a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Answer: A

Socialistic economy emphasises the collective ownership of the means of production (property and assets). It also ascribes a large role to the state in running the economy.
A socialist economy’s central goal is the welfare of its subjects by progressive and equitable distribution of income, widespread employment, economic growth etc.
Economic efficiency is generally the goal of capitalist economies.

Q.10)Consider the following statements regarding India’s External Sector.

1.Despite all the disruptions caused by the Covid-19 pandemic, India’s balance of payments remained in surplus since the start of Covid-19 pandemic.
2.India’s foreign exchange reserves as on 31st December 2021 was more than 20 months of imports.
3.India was never in the top five position of largest foreign exchange reserves holder in the world.
Which of the above statements is/are incorrect?

a) 1, 2
b) 2 only
c) 1, 3
d) 2, 3

Answer: D

Despite all the disruptions caused by the global pandemic, India’s balance of payments remained in surplus throughout the last two years. This allowed the Reserve Bank of India to keep accumulating foreign exchange reserves, which stands at US$634 billion on 31st December 2021). This is equivalent to 13.2 months of imports and higher than the country’s external debt. As of end-November 2021, India was the fourth largest foreign exchange reserves holder in the world after China, Japan, and Switzerland.

CURRENT AFFAIRS

Q.1) Consider the following statements on Palm Oil

1. Edible Oil Palm will be brought under MSP regime as announced under National Mission
on Edible Oil-Oil Palm
2. Palm Oil is native to Indonesia and Malayasia
3. Special emphasis on the scheme would be on South India and Lakshadweep

Select the correct answer using the code given below

a) 1 only
b) 2 and 3
c) All the above
d) None of the above

Answer: C

Recently, the Prime Minister announced a National Mission on Edible Oil-Oil Palm (NMEO-OP), with an investment of over Rs 11,000 crore over a five-year period.
It will involve raising the area under oil palm cultivation to 10 lakh hectares by 2025-26 and 16.7 lakh hectares by 2029-30.
Oil palm farmers will be provided financial assistance and will get remuneration under a price and viability formula.
The special emphasis of the scheme will be in India’s North-Eastern (NE) states and the Andaman and Nicobar Islands due to the conducive weather conditions in the regions.
It is native to Africa

Q.2) SAMVAD program refers to?

a) It is launched for the management of mental health issues of the prisoners and prison staff.
b) It is a 24/7 toll-free helpline to provide support to people facing anxiety, stress, depression, suicidal thoughts and other mental health concerns.
c) It is aimed to provide psychosocial support to students,family members and teachers for their mental health and well-being during the times of Covid-19.
d) The programme is aimed at mental health outreach for children who are abandoned and orphaned or child survivors of trafficking.

Answer: D

SAMVAD Stands for: Children in Vulnerable Situations and Distress: Support, Advocacy, and Mental Health Interventions (SAMVAD). The Ministry of Women and Child Development is funding this initiative.


Q.3) Consider the following statements on Samagra Shiksha Scheme

1. It is a centrally sponsored scheme
2. It includes pre-schooling and college education too
3. NIPUN Bharat is a sub-scheme that focus on pre-schooling or pre-primary educational needs

Select the correct answer using the code given below

a) 1 and 2
b) 1 and 3
c) 2 and 3
d) 1,2 and 3

Answer: A

Q.4) Consider the following statements

1. Cryobank are mainly used to preserve endangered plant genetic resources
2. In vitro bank is preferred to preserve seedless plants
3. Field gene bank requires larger land

Select the correct answer using the code given below

a) 1 and 2
b) 1 and 3
c) 2 and 3
d) 1,2 and 3

Answer: C

A seed bank preserves dried seeds by storing them at a very low temperature. Spores and pteridophytes are conserved in seed banks, but other seedless plants, such as tuber crops, cannot be preserved this way
In vitro bank, cells are preserved through particular light and temperature arrangements in a nutrient medium, which is either jellified or in liquid form. This technique is used to preserve seedless plants and plants that reproduce asexually
Cryobanks are utilized for the cryoconservation of animal genetic resources, not plant
Field gene bank is a method of planting plants for the conservation of genes. For this purpose, an ecosystem is created artificially. Through this method, one can compare the differences among plants of different species and can study them in detail. It needs more land, adequate soil, weather, etc. Germplasm of important crops are conserved through this method.

Q.5)Consider the following statements regarding Durrand Line

1)Durand Line is the 2,670-kilometre long international land border between Afghanistan and Pakistan.
2)The agreement demarcating the Durand Line was signed in 1893 between the British civil servant Sir Henry Mortimer Durand and Amir Abdur Rahman, then the Afghan ruler.
3)The line stretches from the Afghanistan’s border with China to Afghanistan’s border with Iran.

Which of the above statements is/are incorrect?

a)1 only
b)2 only
c)3 only
d)None

Answer: D

Durand Line is the 2,670-kilometre long international land border between Afghanistan and Pakistan.
The agreement demarcating the Durand Line was signed on November 12, 1893 between the British civil servant Sir Henry Mortimer Durand and Amir Abdur Rahman, then the Afghan ruler.
The line cut through Pashtun tribal areas on both sides of the border.
The line stretches from the Afghanistan’s border with China to Afghanistan’s border with Iran.


Q.6)Houthis are rebel groups belonging to

a)South Sudan
b)Ethiopia
c)Yemen
d)Qatar

Answer: C

Houthis are an armed rebel group belonging to the Zaidi Shia sect fighting against the government of Yemen. Traditionally, the Houthis have been concentrated in the northwestern Saada Province of Yemen.


Q.7)Consider the following statements about Dugong

1)India’s first Dugong conservation reserve will be built in Andaman and Nicobar
2)Dugong is a marine animal that has been enlisted vulnerable to extinction on a global scale by the
World Conservation Union (IUCN).
3)It is the State animal of Andhra Pradesh
4)It is the only herbivorous mammal that is strictly marine and is the only extant species in the family
Dugongidae.

Which of the following statements is incorrect?

a)1 and 2
b)2 and 3
c)1 and 3
d)2 and 4

Answer: C

India’s first Dugong conservation reserve will be built in Tamil Nadu.
The reserve will spread over an area of 500 km in Palk Bay on the southeast coast of Tamil Nadu.
Dugong is a marine animal that has been enlisted vulnerable to extinction on a global scale by the World Conservation Union (IUCN).
It is the State animal of Andaman & Nicobar Islands. This endangered marine species survive on seagrass and other aquatic vegetation found in the area.
It is the only herbivorous mammal that is strictly marine and is the only extant species in the family Dugongidae.


Q.8)Koraput Plateau is in the state of

a)Maharashtra
b)Rajasthan
c)Karnataka
d)Odisha

Answer: D

Q.9)Consider the following statements

1) In 1985 the Tenth Schedule, popularly known as the anti-defection law, was added to the Constitution by the 52nd Amendment Act
2) The law initially stated that the decision of the Presiding Officer is not subject to judicial review
3)The law specifies a time frame in which such a decision has to be made.

Which of the above statement(s) is/are correct?

a)1 only
b)1 and 2
c)2 and 3
d)3 only

Answer: B

Under the anti-defection law, the power to decide the disqualification of an MP or MLA rests with the presiding officer of the legislature.
The law does not specify a time frame in which such a decision has to be made.
Last year, the Supreme Court observed that anti-defection cases should be decided by Speakers in three months’ time.

Q.10)Recently, Ladakh adopted two endangered species, snow leopard and black-necked crane, as State animal and State bird. Which of the following represent the IUCN Status of the Black Necked crane and Snow Leopard respectively?

a)Vulnerable and Vulnerable
b)Near threatened and Vulnerable
c)Vulnerable and Endangered
d)Critically Endangered and Endangered

Answer: B

Ladakh adopted two endangered species, snow leopard and black-necked crane, as State animal and State bird. The bird is classified as NearThreatened, as per the IUCN classification; whereas Snow leopard has been classified as ‘vulnerable’

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