PRELIMS TEST SERIES (PTS)

Civil Services Examination 2025

Test Code: 01052209 DATE : 22/09/2024

A
GENERAL STUDIES
Test Booklet Series

(Paper-I)
M1T5 : (Economic, Social Development
and Current Affairs)

Time Allowed: Two Hours Maximum Marks: 200

Before attempting paper please read the instructions given on page no. 2 carefully and follow
them.

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(1 – A)
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 Economic, Social Development and Current Affairs, M1T5

1. Which of the following statements correctly Which one of the following is correct in
differentiate public goods from private respect of the above statements?
goods? (a) Both Statement-II and Statement-III
1. Public goods are collectively are correct and both of them explain
consumed, unlike private goods. Statement-I
2. There is no feasible way of excluding (b) Both Statement-II and Statement-
anyone from enjoying the benefits of III are correct, but only one of them
public goods. explain Statement-I
3. Public goods are produced only by the (c) Only one of the Statements II and III is
government. correct and that explains Statement-I
4. Public goods are generally financed (c) Neither Statement-II nor Statement-III
through the government budget. is correct
Select the correct answer using the codes 4. Why did a large portion of India’s workforce
given below: continue to be engaged in agriculture,
(a) 1, 2, and 4 only despite the sector’s declining share in GDP
(b) 1 and 3 only from 1950 to 1990?
(c) 2 and 4 only (a) Ineffective land reforms
(d) 1, 2, 3, and 4 (b) Inability of the industrial and service
2. With reference to Indian Economy, consider sectors to absorb the excess labor from
the following statements: agriculture
1. Bond yield is the return an investor (c) Insufficient technological advancements
gets on a bond. in agriculture
2. An increase in interest rates may lead (d) Government’s policy focus on
to a rise in bond prices. agricultural self-sufficiency
3. Higher internal borrowing by the 5. Consider the following statements with
government may decrease the bond respect to the Monetary Policy Framework
prices. Agreement between the Government of
Which of the statements given above are India and Reserve Bank of India (RBI) :
correct? Statement I:
(a) 1 and 2 only
RBI is responsible for containing inflation
(b) 2 and 3 only
targets at 4% with a band of (+/-) 2 percent
(c) 1 and 3 only
in the medium term.
(d) 1, 2 and 3
Statement II:
3. Consider the following statements
Statement I: RBI determines the inflation target once
every five years under the RBI Act 1934.
The Consumer Price Index (CPI) and Gross
Domestic Product (GDP) Deflator may not Which of the following is correct in respect
always measure price changes in the same of the above statements?
way. (a) Both Statement-I and Statement-II are
Statement II: correct and Statement-II is the correct
explanation for Statement-I
The goods purchased by the representative
(b) Both Statement-I and Statement-II
consumers do not represent all the goods
are correct and Statement-II is not the
produced in a country.
correct explanation for Statement-I
Statement III:
(c) Statement-I is correct but Statement-II
The GDP deflator does not consider the is incorrect
prices of goods imported from other (d) Statement-I is incorrect but Statement-
countries. II is correct

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6. Which of the following best describes the 4. Balances of the Government of India
term ‘Liquidity Coverage Ratio’? with the Reserve Bank
(a) It is an indication of the provision 5. Cash Reserve Requirements
made against bad loans from the profit
Select the correct answer using the code
generated by the banks.
given below:
(b) It is a key financial metric that
(a) 1, 2 and 3 only
calculates a company’s ability to repay
(b) 1, 2, 4 and 5 only
its debt obligations by selling its assets.
(c) 2, 3 and 5 only
(c) It is the ratio of a bank’s capital in
(d) 1, 2, 3, 4 and 5
relation to its risk weighted assets and
current liabilities. 10. Consider the following:
(d) It refers to the proportion of highly 1. Rupee Securities
liquid assets held by a bank to meet its 2. Deposits
short-term obligations. 3. Notes Issued
7. Country A has a lower nominal Gross 4. Loans and Advances
Domestic Product (GDP) than Country B, Which of the above are considered as the
but its GDP at Purchasing Power Parity assets of the Reserve Bank of India (RBI)?
(PPP) is higher. Which of the following is (a) 2 and 4 only
the most likely explanation for this? (b) 1 and 3 only
(a) The overall cost of goods and services (c) 2 and 3 only
in Country A is higher than in (d) 1 and 4 only
Country B.
(b) Country A’s currency is significantly 11. National Disposable Income (NDI) is a
undervalued compared to Country B’s measure of:
currency. (a) The total income earned by households
(c) Goods and services in Country A are in a country.
relatively cheaper than in Country B. (b) The total value of goods and services
(d) Country A has a larger workforce than produced in a country.
Country B. (c) The maximum amount of goods and
services a domestic economy has at its
8. Which of the following taxes are levied on
disposal.
imports in India?
(d) The total government spending on
1. Customs duty
public goods and services.
2. Integrated Goods and Services Tax
(IGST) 12. Consider the following statements regarding
3. Central Goods and Services Tax Regional Rural Banks (RRBs) in India:
(CGST) 1. Narasimham Working Group
Select the correct answer using the codes recommended the establishment of
given below: RRBs.
(a) 1 only 2. The share capital of an RRB is held
(b) 2 only by the Central Government and the
(c) 1 and 2 only concerned State Government in equal
(d) 1 and 3 only proportion.
3. RRBs are exempted from following the
9. Which of the following instruments are
Priority Sector Lending (PSL) norms.
used by the Reserve Bank of India for
sterilisation of Forex inflows? Which of the statements given above is/are
1. Open Market Operations (OMO) correct?
2. Liquidity Adjustment Facility (LAF) (a) 1 only
3. Forex Swaps (b) 1 and 3 only

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 Economic, Social Development and Current Affairs, M1T5

(c) 2 and 3 only 2. It determines the policy repo rate

(d) 1, 2 and 3 required to achieve the inflation target.
3. The Chairperson of MPC has a casting
13. Which of the following terms best describes
vote in the event of a tie.
the government policies intended to reduce
deficits and the accumulation of debt? Which of the statements given above are
(a) Fiscal Stimulus correct?
(b) Quantitative Tightening (a) 1 and 2 only
(c) Debt Management (b) 2 and 3 only
(d) Fiscal Consolidation (c) 1 and 3 only
14. Which of the following can be the possible (d) 1, 2 and 3
effects of higher Fiscal Deficit in an 18. Consider the following statements:
economy? Statement I:
1. Decrease in bond yield
2. Increase in interest rates Import substitution is always considered as
3. Decreased tax on goods and services an effective strategy for achieving economic
growth and development.
Select the correct answer using the codes
given below: Statement II:
(a) 1 and 2 only Import substitution can promote domestic
(b) 2 only industrialization, reduce dependence on
(c) 1 and 3 only foreign imports, and create jobs.
(d) 1, 2 and 3
Which one of the following is correct in
15. With reference to the Indirect Taxes, respect of the above statements?
consider the following statements: (a) Both Statement-I and Statement-II are
1. They are levied on goods and services correct and Statement- II is the correct
2. The burden of indirect taxes can not be explanation for Statement-I
shifted. (b) Both Statement-I and Statement- II
3. They are generally proportionate in are correct and Statement-II is not the
nature. correct explanation for Statement-I
4. They have a limited reach. (c) Statement- I is correct but Statement-II
How many of the statements given above is incorrect
are correct? (d) Statement-I is incorrect but Statement-
(a) Only one II is correct
(b) Only two 19. With reference to Non-Banking Financial
(c) Only three Companies (NBFCs), consider the
(d) All four following statements:
16. Which of the following is the most likely 1. NBFCs form part of the Payment and
impact of monetisation of the budget Settlement system.
deficit? 2. They can engage in the acquisition of
(a) Decreased money supply securities issued by the Government.
(b) Increased inflation 3. The NBFCs cannot accept demand
(c) Increased household consumption deposits.
(d) Decreased private investment 4. All NBFCs must be registered with the
Reserve Bank of India.
17. With reference to the Monetary Policy
Committee (MPC) in India, consider the Which of the statements given above are
following statements: correct?
1. It consists of six members with the RBI (a) 1, 2 and 4 only
Governor as its chairperson. (b) 2 and 3 only

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PTS (GS): CSE 2025

(c) 3 and 4 only (d) Corporate income tax, wealth tax,

(d) 1, 2, 3 and 4 property tax, and goods and services
tax
20. Consider the following statements regarding
Domestic Systemically Important Banks 23. The organisms Blue magpie, White
(D- SIBs): Common Sandpiper, Blue Whistling
1. D-SIBs are financial institutions that Thrush, Giant Shrike are:
(a) Birds
are large enough where they cannot be (b) Primates
allowed to fall. (c) Reptiles
2. The banks are recognized as D-SIBs by (d) Amphibians
the Reserve Bank of India.
24. With reference to the various components
3. As of now, only State Bank of India of the Government budget, consider the
(SBI), ICICI Bank and HDFC Bank following statements:
have been identified under the category 1. Revenue receipts are redeemable
of D-SIBs. claims on the government.
2. Capital receipts either reduce the
How many of the statements given above is/ government liability or create assets
are correct? for the government.
(a) Only one
Which of the statements given above is/are
(b) Only two correct?
(c) All three (a) 1 only
(d) None (b) 2 only
21. Consider the following: (c) Both 1 and 2
(d) Neither 1 nor 2
1. Investment in shares
2. Interest payments on market loans 25. Which of the following best describes the
3. Loans by the Central government to term “Psychic income”?
(a) The monetary value of goods and
Union Territory Governments
services consumed.
4. Borrowing by the Government from (b) The satisfaction derived from the
the market consumption of goods and services.
5. Grants given to Local governments (c) The income earned from employment
or investments.
How many of the above forms a part of
(d) The intangible benefits of material
the Capital Expenditure under the Union possessions.
Budget of India?
26. Consider the following statements regarding
(a) Only two
the Marginal Standing Facility (MSF):
(b) Only three 1. It refers to the facility under which
(c) Only four banks can borrow funds overnight from
(d) Only five the Reserve Bank of India without any
22. Which of the following taxes are generally collateral.
2. Under the MSF, the banks can borrow
considered Direct Taxes?
up to 10% of their net demand and time
(a) Income tax, value added tax, corporate liabilities (NDTL).
income tax, and wealth and property 3. The facility is available for both
tax Scheduled Commercial Banks and
(b) Goods and services tax, income tax, Scheduled Urban Cooperative Banks.
value added tax, and corporate income Which of the statements given above is/are
tax not correct?
(c) Income tax, corporation tax, wealth (a) 1 and 3 only
tax, and property tax (b) 1 and 2 only

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 Economic, Social Development and Current Affairs, M1T5

(c) 1, 2 and 3 (c) 1 and 2 only

(d) None (d) 1, 2, and 3
27. Consider the following statements regarding 31. Consider the following statements:
the ‘High Powered Money’ in the context of 1. Swell waves are caused by local
India :
winds while tsunamis are caused
1. It represents the total liability of the
Reserve Bank of India (RBI) by underwater disturbances such as
2. It includes currency in circulation, earthquakes.
deposits of banks with the RBI, and 2. Tsunamis travel approximately 10
other deposits with the RBI. times faster than swell waves.
Which of the statements given above is/are Which of the statements given above is/are
correct?
correct?
(a) 1 only
(b) 2 only (a) 1 only
(c) Both 1 and 2 (b) 2 only
(d) Neither 1 nor 2 (c) Both 1 and 2
28. Which of the following best describes the (d) Neither 1 nor 2
term “Bank Run”? 32. With reference to the “Ways and Means
(a) A situation where banks hold excess
Advances” in India, consider the following
cash reserves.
(b) A situation where a bank closes its statements:
branches after being convicted of 1. It is a source of long-term financing
fraud. for the Government to meet its fiscal
(c) Non-compliance by banks with the deficit.
guidelines provided by the RBI under 2. It is available only to the Central
Prompt Corrective Action (PCA).
government and not to state
(d) A situation where a large number of
customers withdraw their deposits governments.
simultaneously from a bank. 3. It can be used to meet the temporary
29. “Also known as the Architect of Indian mismatches in the government’s
Planning, he established the Indian receipts and payments.
Statistical Institute in Calcutta and started a How many of the statements given above
journal called Sankhya.”
are correct?
Who among the given personalities is (a) Only one
referred to in the above statement?
(b) Only two
(a) Dhananjay Ramchandra Gadgil
(b) Jawahar Lal Nehru (c) All three
(c) Prasanta Chandra Mahalanobis (d) None
(d) Kakkadan Nandanath Rajan
33. With reference to land reforms in
30. In the context of the taxation system, independent India, which one of the
consider the following taxes: following statements is not correct?
1. Excise duty
(a) The abolition of intermediaries led to
2. Sales tax
3. Commodities transaction tax a significant increase in agricultural
output.
Which of the above is/are usually considered
regressive in nature? (b) Land ceiling legislation was aimed
(a) 1 only at reducing the concentration of land
(b) 1 and 3 only ownership.

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PTS (GS): CSE 2025

(c) The land reforms were implemented (c) Financing secured by Public Sector
uniformly across all states of India. Undertakings (PSUs) via loans and
(d) The poorest of the agricultural laborers equity issuances.
did not benefit significantly from land (d) Revenue collected from interest
reforms. payments on loans given to states.
34. Consider the following financial entities : 37. With reference to Payments Banks, consider
1. Private Scheduled Commercial Banks the following statements:
2. Regional Rural Banks 1. A payments bank aims to enhance
3. Primary Dealers financial inclusion, especially through
savings accounts and payments services.
How many of the above financial entities 2. A payments bank is not allowed to give
are permitted by the RBI to participate in any form of loan or issue a credit card.
the Liquidity Adjustment Facility (LAF) 3. A payments bank can accept NRI
auctions? Deposits.
(a) Only one Which of the statements given above is/are
(b) Only two correct?
(c) All three (a) 1 and 2 only
(d) None (b) 1 only
35. In the context of the Fiscal Responsibility (c) 1 and 3 only
and Budget Management (FRBM) Act, (d) 3 only
consider the following statements: 38. In the context of the taxation system,
1. Central Government is not allowed to consider the following taxes:
borrow from the Reserve Bank of India 1. Tax on carbon emission
(RBI) except by way of Ways and 2. Tax on luxury goods
Means advances to meet temporary 3. Tax on sin goods like tobacco and
cash requirements. alcohol
2. RBI, in general, can not subscribe to Which of the above can be considered as a
primary issues of Central Government Pigouvian Tax?
securities. (a) 3 only
3. Central Government must present a (b) 1 and 2 only
Medium-term Fiscal Policy Statement (c) 1 and 3 only
with the Annual Budget, setting targets (d) 1, 2 and 3
for key fiscal indicators for the next 39. Consider the following pairs:
three years.
Type of Government
Which of the statements given above is/are Description
Deficit
correct? 1. Effective Revenue : Fiscal deficit
(a) 3 only Deficit minus the interest
(b) 1 and 2 only payments
(c) 1 and 3 only
2. Primary Deficit :R  evenue Deficit
(d) 1, 2, and 3
minus the grants
36. Which of the following best describes the for the creation of
‘Internal and Extra Budgetary Resources’ capital assets
of the government?
3. Monetised Deficit : G overnment
(a) Funds obtained through External
deficit financed
Commercial Borrowing.
by borrowing
(b) Capital raised through Small Saving
deposit schemes. from RBI.

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 Economic, Social Development and Current Affairs, M1T5

How many of the pairs given above are Which of the statements given above is/are
correctly matched? correct?
(a) Only one (a) 1 and 2 only
(b) Only two (b) 2 only
(c) All three (c) 1 and 3 only
(d) None (d) 1, 2 and 3
40. In the context of Goods and Services Tax 43. Which of the following liabilities of the
(GST), consider the following statements: Central government are part of the “Public
1. Input Tax Credit of Central GST debt”?
(CGST) can be used for paying State 1. Government securities issued in the
GST (SGST) liabilities. open market
2. Input Tax Credit from goods 2. Treasury bills issued to Commercial
transactions can be used for paying Banks
GST liabilities for a service transaction. 3. External debt raised by the government
4. Public Account Liabilities.
Which of the statements given above is/are
correct? Select the correct answer using the code
(a) 1 only given below:
(b) 2 only (a) 1 only
(c) Both 1 and 2 (b) 1 and 2 only
(d) Neither 1 nor 2 (c) 1,2 and 3 only
(d) 1, 2, 3 and 4
41. How does the Standing Deposit Facility
44. The Government of India seeks to compare
(SDF) differ from the fixed rate reverse the volume of production in the Indian
repo (FRRR)? economy across two different years. Which
1. SDF is a tool of the Reserve Bank of of the following indicators is most suitable
India to inject liquidity, whereas FRRR for this comparison?
is used for absorbing excess liquidity. (a) Real GDP
2. The SDF is available on all days of the (b) Nominal GDP
(c) Nominal GNP
week, while the FRRR is only available
(d) GDP Deflator
on certain days.
3. The SDF does not require any 45. Consider the following:
1. Opening a Bank account
collateral, while the FRRR does.
2. Buying a life insurance policy
How many of the above statements are 3. Investing in Mutual Fund
correct? In India, how many of the above activities
(a) Only one require mandatory Know Your Customer
(b) Only two (KYC) verifications?
(c) All three (a) Only one
(d) None (b) Only two
(c) All three
42. With reference to Peer to Peer lending, (d) None
consider the following statements:
46. Consider the following pairs:
1. Peer to peer lending is also referred to
Region mentioned in the Country
as crowdlending.
News
2. P2P-NBFCs lending is capped at 50
lakh. 1. Point Pedro : Philippines
3. P2P lending is regulated by SEBI in 2. La Cumbre Volcano : Ecuador
India. 3. Shaksgam valley : Afghanistan

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PTS (GS): CSE 2025

How many of the above pairs are correctly (c) It indicates the maximum production
matched? of one good when all resources are
(a) Only one pair allocated exclusively to its production.
(b) Only two pairs (d) It is a graphical representation of the
(c) All three pairs relationship between the demand and
(d) None supply of goods in an economy.
47. Consider the following statements with
50. Consider the following statements:
respect to SMART system launched by
DRDO: Statement I:
1. It is a next-generation missile-based A demand curve usually slopes downward.
light-weight torpedo delivery system.
Statement II:
2. It is a canister-based missile system
which consists of a two-stage solid Marginal utility from consuming each
propulsion system. additional unit of a commodity declines as
its consumption increases.
Which of the statements given above is/are
not correct? Which one of the following is correct in
(a) 1 only respect of the above statements?
(b) 2 only (a) Both Statement-I and Statement-II are
(c) Both 1 and 2 correct and Statement-II is the correct
(d) Neither 1 nor 2 explanation for Statement-I
(b) Both Statement-I and Statement-II
48. With reference to the calculation of are correct and Statement-II is not the
Gross Domestic Product, considering the correct explanation for Statement-I
following items: (c) Statement-I is Correct but Statement-II
1. Resale of goods is incorrect
2. Social security benefits (d) Statement-I is incorrect but Statement-
3. Exports from Exclusive Economic II is correct
Zones
4. Black-market activities 51. In the context of National Income
Accounting, consider the following
How many of the above are included in the statements:
calculation of Gross Domestic Product of 1. While Gross Value Added (GVA)
an economy? focuses on the supply side, Gross
(a) Only one Domestic Product (GDP) focuses on
(b) Only two the demand side.
(c) Only three 2. GVA is calculated at basic prices,
(d) All four whereas GDP is calculated at market
49. Which of the following best describes the prices.
‘Production Possibility Set’ of an economy? 3. GVA is generally calculated on a sector-
(a) It refers to the total output that an wise basis, whereas GDP is generally
economy can produce when all calculated for the entire economy.
resources are fully and efficiently Which of the statements given above are
employed. correct?
(b) It represents all possible combinations (a) 1 and 2 only
of two goods that can be produced in an (b) 2 and 3 only
economy, given its resource constraints (c) 1 and 3 only
and technology level. (d) 1, 2, and 3

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 Economic, Social Development and Current Affairs, M1T5

52. For banks, a higher Statutory Liquidity (b) Government’s role in directly
Ratio (SLR) is generally preferred over a controlling wages and prices to ensure
higher Cash Reserve Ratio (CRR) because: economic stability.
1. SLR assets can be more easily (c) Government’s intervention to adjust
liquidated compared to CRR assets. aggregate demand in the economy
2. SLR assets generate interest, whereas to correct fluctuations in income and
CRR balances do not. employment.
Which of the statements given above is/are (d) Government’s intervention for
correct? redistribution of income through
(a) 1 only taxation and transfer payments to
(b) 2 only ensure social equity.
(c) Both 1 and 2 56. Consider the following:
(d) Neither 1 nor 2 1. President of India
53. Consider the following parameters: 2. Indian Armed Forces Personnel
1. Life expectancy at birth 3. Electors under Preventive Detention
2. Literacy rate 4. Persons with Disabilities having at
3. Expected years of schooling for least 40% disability
children entering school As per the Conduct of Election Rules, 1961,
4. Gross National Income (GNI) per how many of the above are entitled to vote
capita by postal ballot?
5. Access to basic amenities (a) Only one
Which of the above are included in the (b) Only two
Human Development Index (HDI) of (c) Only three
United Nations Development Programme? (d) All four
(a) 1, 2, and 3 only 57. With reference to the Non-Performing
(b) 1, 3, and 5 only
Assets (NPAs) and their categorisation,
(c) 1, 2, and 5 only
consider the following statements:
(d) 1, 3, and 4 only
1. Substandard Assets are NPAs where
54. Which of the following statements best the principal or interest is overdue for
describes the term “Fiscal Slippage”? less than 12 months.
(a) A situation where the government’s 2. Doubtful Assets are NPAs where the
fiscal deficit increases beyond the principal or interest is overdue for 12
target level set in the budget. to 36 months.
(b) The process by which the government 3. Loss assets are those assets which are
reduces its fiscal deficit to maintain un-collectible and of such little value
macroeconomic stability. that its continuance as a bankable asset
(c) A scenario where public sector revenues is not warranted.
exceed government expenditure during
a financial year. How many of the statements given above
(d) A situation where tax revenues fall are correct?
short of non-tax revenues in the fiscal (a) Only one
budget. (b) Only two
(c) All three
55. An important objective of the Government
(d) None
Budget is the “Stabilization function”,
which refers to: 58. With reference to the types of goods in an
(a) Government’s role in providing public economy, consider the following statements:
goods and services to ensure economic 1. Final goods can include both capital
efficiency goods and consumer goods.

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PTS (GS): CSE 2025

2. Non-durable consumer goods are charge levied on taxpayers for general

always intermediate goods. revenue purposes.
3. Durable consumer goods are (b) Cess is shared between the Central and
considered capital goods as they State Governments, while a Surcharge
undergo depreciation. is entirely allocated to the States.
4. Part of the final output that comprises (c) Both Cess and Surcharge are imposed
capital goods is considered as the to fund specific government schemes,
Gross Investment of the economy. but only the Surcharge is meant for
redistribution to the States.
How many of the statements given above
(d) Surcharge is applied only on indirect
are correct?
(a) Only one taxes, whereas Cess is applicable only
(b) Only two on direct taxes.
(c) Only three 62. Consider the following sectors:
(d) All four 1. Agriculture
59. What does the Lorenz Curve represent in 2. Micro, Small and Medium Enterprises
economics? 3. Export Credit
(a) The relationship between inflation and 4. Education
unemployment. 5. Capital Market Investments
(b) The distribution of income or wealth 6. Renewable Energy
within an economy.
(c) The trade-off between economic growth How many of the following sectors are
and environmental sustainability. covered under the Priority Sector Lending
(d) The relationship between interest rates (PSL) guidelines issued by the Reserve
and investment. Bank of India (RBI)?
(a) Only two
60. Which of the following statements is/are
(b) Only three
correct regarding the Small Finance Banks
(SFBs) in India? (c) Only four
1. They are required to maintain the (d) Only five
Cash Reserve Ratio (CRR), but 63. With reference to the Market Stabilization
are exempted from maintaining the Scheme (MSS) of the Reserve Bank of India
Statutory Liquidity Ratio (SLR). (RBI), consider the following statements:
2. They must allocate 75% of their 1. MSS is implemented during periods of
adjusted net bank credit (ANBC) to the
excess liquidity in the economy.
Priority Sector.
2. Under the scheme, the RBI undertakes
3. They can not accept demand deposits.
the sale of government securities.
Select the correct answer using the code Which of the above statements is/are correct?
given below: (a) 1 only
(a) 1 only (b) 2 only
(b) 2 only
(c) Both 1 and 2
(c) 1 and 3
(d) Neither 1 nor 2
(d) 3 only
64. Consider the following factors for a
61. Which of the following statements correctly
differentiates between Cess and Surcharge particular good in an economy:
in the Indian taxation system? 1. An increase in the price of a substitute
(a) Cess is a tax levied on specific goods good.
or services for a particular purpose, 2. An increase in the price of a
while a Surcharge is an additional complementary good.

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 Economic, Social Development and Current Affairs, M1T5

3. A change in consumer preferences in 68. Consider the following criteria used by the
favour of the good. 15th Finance Commission for horizontal
devolution of funds among the states:
Which of the above is/are likely to shift the 1. Income distance
demand curve for the good leftward? 2. Demographic performance
(a) 1 and 2 only 3. Area
(b) 2 only 4. Tax & fiscal efforts
(c) 2 and 3 only 5. Forest & ecology
(d) 1 and 3 only
What is the correct sequence of weightage
65. In the context of a market economy, consider given to above criteria in descending order?
the following: (a) 1-2-4-3-5
1. Many firms offer products that are
(b) 2-1-3-4-5
similar but not identical.
(c) 3-2-1-5-4
2. High barriers to entry for new firms.
3. A high degree of price elasticity of (d) 1-3-2-5-4
demand. 69. “State Finances: A Study of Budgets” is an
Which of the above is/are key characteristics annual publication released by:
of monopolistic competition? (a) NITI Aayog
(a) 1 and 2 only (b) Department of Economic Affairs,
(b) 1 and 3 only Ministry of Finance
(c) 2 and 3 only
(c) Reserve Bank of India
(d) 1, 2, and 3
(d) Department of Revenue, Ministry of
66. Which of the following statements best Finance
describes the concept of ‘Period Poverty’?
(a) A phase of economic downturn 70. Consider the following statements
experienced periodically by nations, regarding the Incremental Capital Output
leading to increased poverty levels. ratio (ICOR):
(b) The trend of poverty between two Statement I:
consecutive years in a nation.
(c) Poverty calculated based on the base Lower ICOR is considered beneficial for
year when a significant economic the economy.
change occurred in the country. Statement II:
(d) Economic vulnerability faced by Decrease in ICOR indicates that lower
women and girls due to the financial
investment is required to produce an
burden of accessing menstrual
products. additional unit of output.
Statement III:
67. Consider the following:
1. Appreciation of Rupee ICOR is an effective measure of the
2. Increase in savings rate among productivity of labor in the economy.
consumers Which one of the following is correct in
3. Increase in investment expenditure
respect of the above statements ?
How many of the above are likely impacts (a) Both Statement-II and Statement-III
of the expansionary monetary policy by the are correct and both of them explain
Reserve Bank of India?
Statement-I
(a) Only one
(b) Only two (b) Both Statement-II and Statement-
(c) All three III are correct, but only one of them
(d) None explains Statement-I

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PTS (GS): CSE 2025

(c) Only one of the Statements II and III is (b) Low inflation, low unemployment, and
correct and that explains Statement-I moderate GDP growth.
(d) Only one of the Statements II and III (c) High inflation, moderate
is correct, but that does not explain unemployment, and high GDP growth.
Statement-I (d) High GDP growth, low fiscal deficit,
and appreciating rupee.
71. The concept of the “invisible hand,” as
described by Adam Smith, primarily 75. Consider the following statements regarding
advocates for: the Index of Industrial Production (IIP) in
(a) Government intervention in markets India:
to ensure equitable distribution of
1. It measures short-term changes in the
resources.
(b) A centrally planned economy where volume of production of a selected
the government dictates production basket of industrial products during a
and consumption. given period.
(c) A free market economy with minimal 2. It covers the Mining, Manufacturing,
government interference. and Electricity sectors of the economy.
(d) A mixed economy that combines elements
3. It is compiled and published by the
of both market and planned systems.
Department for Promotion of Industry
72. Recently, the Reserve Bank of India and Internal Trade (DPIIT).
approved the First Loss Default Guarantee
(FLDG) programme for digital lending. Select the correct answer using the code
What will be its implication? given below:
(a) Fintech platform will compensate (a) 1 only
the lender for a portion of losses if a (b) 1 and 2 only
borrower defaults.
(c) 1 and 3 only
(b) Lender will compensate the fintech
(d) 1, 2, and 3
platform for a portion of losses if a
borrower defaults. 76. Which of the following bodies is responsible
(c) Deposit Insurance and Credit for recommending appointments of Whole-
Guarantee Corporation (DICGC) will Time Directors (WTDs) and Non-Executive
partially compensate the lender in case
Chairpersons (NECs) on the Boards of
of default.
(d) DICGC will partially compensate the Public Sector Banks, Financial Institutions,
fintech platform in case of default. and Public Sector Insurers?
(a) Bank Board Bureau
73. Angel tax, often seen in the news, is levied
on: (b) Reserve Bank of India
(a) Angel investors providing fund to (c) NITI Aayog
start-ups (d) Financial Services Institutions Bureau
(b) Startups which are more than 5 years 77. The Union Budget 2024-25 introduced a
old and are profitable
new Long-Term Capital Gains (LTCG) tax
(c) Unlisted companies issuing shares at a
price more than their fair market value regime, where the tax rate is lower but the
(d) Listed startups issuing shares to the indexation benefit has been removed. What
foreign investors does the term “indexation benefit” imply in
74. A Goldilocks economy in India would this context?
likely exhibit the following combination: (a) Reduction in the tax liability of
(a) High inflation, high unemployment, individuals or businesses payable to
and low GDP growth. the government.

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 Economic, Social Development and Current Affairs, M1T5

(b) Process of linking tax rates to a general (c) All three

price index to adjust for inflation over (d) None
time. 80. Consider the following pairs:
(c) Exemption allowing individuals or Receipts under the Categorisation
entities to continue activities permitted Union Budget
prior to new regulations or laws. 1. Dividends : Revenue Receipt
(d) Adjustment of the purchase price of an and Profits on
asset to account for inflation, reducing Investments
the tax burden on capital gains. 2. Market : Revenue Receipt
Borrowings
78. Consider the following statements:
3. Small Savings : Revenue Receipt
Statement I: Schemes
When the Reserve Bank of India (RBI) 4. Provident Fund : Capital Receipt
reduces the Statutory Liquidity Ratio How many of the pairs given above are
(SLR), Scheduled Commercial Banks may correctly matched?
lower their lending rates. (a) Only one
Statement II: (b) Only two
(c) Only three
A reduction in the SLR allows banks to hold (d) All four
more funds, which can be used for lending.
81. Consider the following statements:
Which of the following is correct in respect
of the above statements? Statement I:
(a) Both Statement-I and Statement-II are The Marrakesh Agreement led to the
correct, and Statement-II is the correct establishment of the World Trade
explanation for Statement-I Organization (WTO).
(b) Both Statement-I and Statement-II
Statement II:
are correct, but Statement-II is not the
correct explanation for Statement-I The World Trade Organization (WTO) is
(c) Statement-I is correct, but Statement-II the only global international organization
is incorrect responsible for dealing with the rules of
(d) Statement-I is incorrect, but Statement- trade between nations.
II is correct Which one of the following is correct in
79. In the context of Government Budgeting, respect of the above statements?
consider the following data-sets: (a) Both Statement-I and Statement-II are
1. Actual data of the year 2022-23 correct, and Statement-II is the correct
2. Provisional data of the year 2023-24 explanation for Statement-I.
3. Budgetary estimates for the year (b) Both Statement-I and Statement-II
2024-25 are correct, but Statement-II is not the
How many of the above datasets were correct explanation for Statement-I.
included in the recently presented Union (c) Statement-I is correct, but Statement-II
Budget 2024-25? is incorrect.
(a) Only one (d) Statement-I is incorrect, but Statement-
(b) Only two II is correct

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82. Which of the following is/are correct 85. Which of the following function the Reserve
regarding the Marginal Cost of Funds based Bank of India (RBI) perform in its role as
Lending Rate (MCLR)? ‘Banker to Banks’
1. It refers to the minimum interest rate 1. It holds the deposits of commercial
banks and facilitates interbank
below which a bank cannot lend under
transactions.
any circumstance. 2. It provides short-term loans to banks
2. Each bank follows their own unique for specific purposes.
method to calculate MCLR. 3. It regulates the interest rates on savings
Select the correct answer using the code accounts offered by commercial banks.
given below: Select the correct answer using the codes
(a) 1 only given below:
(b) 2 only (a) 1 only
(c) Both 1 and 2 (b) 1 and 2 only
(c) 2 and 3 only
(d) Neither 1 nor 2
(d) 1, 2, and 3
83. In the context of nationalization of banks in
86. An increase in the Debt-to-GDP ratio
India, consider the following statements:
may lead to which of the following
1. Providing banking access to the
consequences?
unbanked population in rural areas
1. Increase in budget deficit
2. Curbing the concentration of economic
2. Increase in interest payment
power in a few hands.
3. Decrease in disposable income
3. Controlling the increasing Non-
Performing Asset (NPA) in the banking Select the correct option using the codes
sector given below:
4. Ensuring increased profitability for (a) 1 and 2 only
public sector banks. (b) 2 and 3 only
(c) 1 and 3 only
How many of the above were primary
(d) 1, 2 and 3
objectives of the nationalization of banks in
India? 87. Consider the following statements:
(a) Only one Statement I:
(b) Only two
(c) All three Cash Reserve Ratio (CRR) is a direct
(d) None instrument of Monetary Policy which
immediately impacts the system liquidity.
84. With reference to the H5N1 virus sometimes
seen in the news, consider the following Statement II:
statements: Direct instruments are tools of monetary
1. It causes a highly contagious respiratory policy that operate through the market by
illness in birds. influencing underlying demand and supply
2. H5N1 virus can be transmitted to conditions
humans through the consumption of
Which one of the following is correct in
unpasteurized cow’s milk.
respect of the above statements?
Which of the statements given above is/are (a) Both Statement-I and Statement-II are
correct? correct and Statement-II is the correct
(a) 1 only explanation for Statement-I
(b) 2 only (b) Both Statement-I and Statement-II
(c) Both 1 and 2 are correct and Statement-II is not the
(d) Neither 1 nor 2 correct explanation for Statement-I

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 Economic, Social Development and Current Affairs, M1T5

(c) Statement-I is Correct but Statement-II (c) All three

is incorrect (d) None
(d) Statement-I is incorrect but Statement-
II is correct 91. Consider the following aspects of an
economy:
88. The concept of “Scheduled Cooperative
1. Past performance of businesses
Banks” is often mentioned in news. What
2. Current status of businesses
are advantages a cooperative bank gains by
3. Future prospects of businesses
being “Scheduled”?
1. Scheduled banks have a lower capital Which of the above is/are indicated by the
adequacy ratio requirement. Purchasing Manager’s Index (PMI)?
2. Scheduled banks can directly access (a) 1 and 3 only
funds from the RBI’s repo window. (b) 1 and 2 only
3. Scheduled banks enjoy a relaxation in (c) 2 and 3 only
provisioning norms for bad loans. (d) 1, 2, and 3
How many of the statements given above is/ 92. Consider the following statements:
are correct?
Statement I :
(a) Only one
(b) Only two Reserve Bank of India is known as the
(c) All three ‘lender of last resort’.
(d) None Statement II :
89. In the context of the Liberalised remittance The RBI offers loans to central and state
scheme, which of the following is not governments to address immediate cash
a permissible purpose for outward needs arising from temporary mismatches
remittance? in their receipts and payments.
(a) Investment in foreign stocks and Which of the following is correct in respect
mutual funds. of the above statements?
(b) Payment for medical treatment abroad. (a) Both Statement-I and Statement-II are
(c) Donations to charitable organizations correct and Statement-II is the correct
outside India. explanation for Statement-I
(d) Trading in foreign exchange abroad. (b) Both Statement-I and Statement-II
are correct and Statement-II is not the
90. With reference to the Primary Agricultural
correct explanation for Statement-I
Credit Societies (PACS), consider the
(c) Statement-I is correct but Statement-II
following statements:
is incorrect
1. They are at the lowest tier of the short-
(d) Statement-I is incorrect but Statement-
term cooperative credit structure.
II is correct
2. They are not regulated by the Reserve
Bank of India. 93. Liberalization of Indian Economy in 1991
3. They act as a refinancing agency for led to:
1. Abolition of Industrial Licensing for
District Central Cooperative Banks.
most of the sectors of the economy.
How many of the statements given above is/ 2. Increase in the inflow of foreign
are correct? exchange.
(a) Only one 3. Abolition of Import licensing for most
(b) Only two of the sectors of the economy..

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PTS (GS): CSE 2025

How many of the above statements is/are 3. Gender Budget has been made a part of
correct? the Union Budget of India since 2005-06.
(a) Only one Which of the statements given above is/are
(b) Only two correct?
(c) All three
(a) 1 and 3 only
(d) None
(b) 2 and 3 only
94. Chir Pine trees are often associated with (c) 1 only
forest fires in hilly states. Consider the (d) 1, 2, and 3
following statements regarding these trees:
97. Consider the following statements
1. Chir Pine Trees were introduced to the
regarding the Government of India’s Policy
Himalayas by the British.
on Strategic Disinvestment of Public Sector
2. Chir Pine Trees are found only in
Enterprises:
Western Himalayas.
1. There will be bare minimum presence
Which of the statements given above is/are of the public sector enterprises in the
correct? strategic sectors.
(a) 1 only 2. Central Public Sector Enterprises will
(b) 2 only be privatised, or otherwise shall be
(c) Both 1 and 2 closed in the non-strategic sectors.
(d) Neither 1 nor 2 3. “Transport and Telecommunications”
95. Consider the following statements regarding has been categorized as one of the
the International Criminal Court (ICC) and strategic sectors.
the International Court of Justice (ICJ): Which of the statements given above is/are
1. Both the ICC and ICJ are principal correct?
judicial organs of the United Nations. (a) 2 only
2. While the ICC adjuticates dispute (b) 3 only
between state, the ICJ primarily (c) 2 and 3 only
prosecutes individuals. (d) 1, 2 and 3 only
3. India is a member of both the ICC and
ICJ. 98. Which of the following is a legal tender in
India?
How many of the statements given above 1. Cheques issued by Scheduled
are correct? Commercial Banks
(a) Only one 2. Demand drafts issued by Scheduled
(b) Only two Commercial Banks
(c) All three 3. Fifty paise coins for sum upto Rs. 10.
(d) None
Select the correct answer using the code
96. With reference to Gender Budgeting, given below:
consider the following statements: (a) 1 only
1. It emphasizes assessing the differential (b) 3 only
impact of public spending on men and
(c) 1 and 2 only
women.
(d) 2 and 3 only
2. Its objective is to allocate equal
budgetary resources for men and women 99. Which of the following is most likely a
to achieve uniform developmental consequence of the Global Minimum Tax
outcomes for both genders. coming into effect?

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 Economic, Social Development and Current Affairs, M1T5

(a) Multinational companies will primarily 100. A businessman in Maharastra sells a

shift their profits to developing product to a buyer in Karnataka. Which
countries to take advantage of lower type of Goods and Services Tax (GST) will
tax rates. be applied on the product, and how will the
(b) Countries with low corporate tax rates revenue be shared?
will lose their attractiveness as tax (a) CGST will be applied, and revenue
havens for multinational companies. will be shared between the Centre,
(c) Countries will adopt more stringent Maharashtra and Karnataka.
regulations on foreign investments to (b) IGST will be applied, and revenue will
offset potential tax losses. go to Maharashtra. .
(d) Multinational companies will relocate (c) IGST will be applied and revenue will
to countries with lower tax rates to be shared between Centre, Maharashtra
avoid the minimum tax. and Karnataka.
(d) IGST will be applied, and revenue
will be shared between Centre and
Karnataka.

nnnn

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Space for Rough Work

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