Economic Development

11. The process of reforms in India has to be completed via which of the f

The process of reforms in India has to be completed via which of the following processes ?

  • 1. Liberalisation
  • 2. Privatisation
  • 3. Globalisation

Select the correct answer using the code given below :

Subscribe on YouTube
1 and 2 only
2 and 3 only
1 and 3 only
1, 2 and 3
This question was previously asked in
UPSC SO-Steno – 2018
Download PDFAttempt Online
The process of reforms in India includes Liberalisation, Privatisation, and Globalisation.
The major economic reforms initiated in India in 1991 are commonly referred to as the LPG reforms, standing for Liberalisation, Privatisation, and Globalisation. Liberalisation involved removing restrictions on economic activity, Privatisation involved reducing the role of the state in the economy by selling public sector undertakings, and Globalisation involved integrating the Indian economy with the global economy. All three are considered integral components of India’s reform process.
These reforms were undertaken in response to a severe economic crisis and marked a significant shift in India’s economic policy, moving away from a more protectionist and state-controlled model towards a market-oriented economy.

Join Our Telegram Channel

12. Which one of the following relations is correct for net domestic

Which one of the following relations is correct for net domestic product?

Subscribe on YouTube
Net Domestic Product = Gross Domestic Product + Depreciation
Net Domestic Product = Gross Domestic Product – Depreciation
Net Domestic Product = Gross Domestic Product/Depreciation
Net Domestic Product = Gross Domestic Product × Depreciation
This question was previously asked in
UPSC SO-Steno – 2018
Download PDFAttempt Online
The correct answer is B. Net Domestic Product (NDP) is calculated by subtracting Depreciation from Gross Domestic Product (GDP).
– Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country’s borders in a specific time period.
– Depreciation is the consumption of fixed capital, representing the decrease in the value of physical capital goods (like machinery, buildings) due to wear and tear or obsolescence over time.
– Net Domestic Product (NDP) measures the value of goods and services produced within a country’s borders minus the cost of capital consumed during the production process. It is a measure of net output.
The relationship is NDP = GDP – Depreciation. Similarly, Net National Product (NNP) is Gross National Product (GNP) minus Depreciation. NDP at market prices is GDP at market prices minus depreciation. NDP at factor cost is GDP at factor cost minus depreciation. NDP is a more accurate measure of the nation’s annual output available for consumption and investment after accounting for the capital used up in production.

Join Our Telegram Channel

13. Core CPI inflation is generally lower than headline CPI inflation

Core CPI inflation is generally lower than headline CPI inflation because

Join Our Telegram Channel
food inflation is generally higher than non-food inflation
food prices fluctuate too widely over the year
food prices are controlled by the Government
share of food in consumption basket has been increasing over time
This question was previously asked in
UPSC SO-Steno – 2017
Download PDFAttempt Online
Option A is the most accurate explanation among the choices for why core CPI is *generally* lower than headline CPI. Headline CPI includes food and energy, while core CPI excludes them. When food inflation is high (which it often is in economies like India due to supply shocks, weather dependency, etc.), it pushes headline inflation up relative to core inflation.
Core inflation measures inflation excluding volatile items like food and energy. Headline inflation includes all items. If the excluded items (food and energy) experience higher price increases than the included items, then headline inflation will be higher than core inflation.
Option B is true, food prices do fluctuate widely, but the *reason* core is generally lower than headline is specifically when these fluctuations lead to high food inflation. Option C is generally incorrect; food prices are largely market-driven, though the government might intervene through procurement or subsidies for certain items. Option D, the share of food in the consumption basket, affects the *weight* of food in CPI calculation, not directly why core is lower than headline, although a large food share means food inflation has a significant impact on headline CPI.

Subscribe on YouTube

14. In Economics, which one of the following is not an essential condition

In Economics, which one of the following is not an essential condition for existence of market ?

Subscribe on YouTube
Product (goods or service)
Buyers
Sellers
Place
This question was previously asked in
UPSC SO-Steno – 2017
Download PDFAttempt Online
Place is not always an essential condition for the existence of a market.
A market is essentially a mechanism that brings together buyers and sellers to exchange goods or services. The essential components are: 1) A product or service to be exchanged, 2) Buyers (demand), and 3) Sellers (supply). Traditionally, markets were associated with physical locations (marketplaces), but in the modern economy, especially with the advent of e-commerce and digital platforms, markets can exist without a specific physical ‘place’. Online markets, for instance, facilitate transactions globally without a common physical location for buyers and sellers.
Products, buyers, and sellers are fundamental requirements for any exchange mechanism to function as a market. Without any one of these, a market cannot exist.

Join Our Telegram Channel

15. Which of the following statements is/are correct ? Tax expenditure is

Which of the following statements is/are correct ?
Tax expenditure is the revenue foregone by the Government due to

Join Our Telegram Channel
  • 1. exemptions under corporation tax.
  • 2. deductions allowed on account of accelerated depreciations.
  • 3. deductions on export profits earned by the SEZ units.

Select the correct answer using the code given below :

1 only
1 and 2 only
2 and 3 only
1, 2 and 3
This question was previously asked in
UPSC SO-Steno – 2017
Download PDFAttempt Online
The correct answer is D. All three statements describe revenue foregone by the government due to specific tax provisions, which constitutes tax expenditure.
Tax expenditure refers to deviations from the normal tax structure that provide preferential treatment to certain activities or groups. These deviations result in a reduction of government revenue that would otherwise be collected.
1. Exemptions under corporation tax reduce the amount of corporate income subject to tax, thus lowering the tax collected. This is a form of tax expenditure.
2. Accelerated depreciation allows businesses to deduct the cost of assets faster than their actual wear and tear, reducing taxable income in the earlier years and deferring tax liability. This is considered a tax expenditure as it provides a benefit compared to normal depreciation rules.
3. Deductions or exemptions on export profits earned by Special Economic Zones (SEZ) units are specific tax incentives aimed at promoting exports and economic activity in SEZs. These provisions reduce the tax burden on these entities, representing foregone revenue.
Governments often publish a ‘Statement of Revenue Foregone’ or ‘Tax Expenditure Budget’ in their annual financial statements, detailing these types of tax concessions to show their impact on the budget.

Subscribe on YouTube

16. Contract is an agreement between two parties which is not

Contract is an agreement between two parties which is not

Join Our Telegram Channel
voluntary
deliberate
binding
imposed
This question was previously asked in
UPSC SO-Steno – 2017
Download PDFAttempt Online
The correct answer is D. A contract is based on voluntary agreement, not imposition.
A contract is a legally enforceable agreement between two or more parties. Essential elements of a valid contract include mutual assent (offer and acceptance), consideration, capacity, and legality. Mutual assent implies that the parties enter into the agreement voluntarily (A) and with intent (deliberately – B). Once formed correctly, the agreement is legally binding (C) on the parties. A contract cannot be legally imposed (D) on someone; it requires their free and willing consent.
Agreements entered into under duress, coercion, undue influence, or misrepresentation may be voidable because they lack the element of voluntary and deliberate consent.

Subscribe on YouTube

17. Auction is a market where price is

Auction is a market where price is

Subscribe on YouTube
set by negotiation between buyer and seller
arrived at by a bidding process
notified by Government
declared by auctioneer
This question was previously asked in
UPSC SO-Steno – 2017
Download PDFAttempt Online
The correct answer is B. In an auction, the price is determined by a bidding process.
An auction is a type of sale in which goods or services are sold to the highest bidder. The price is not fixed beforehand but is arrived at dynamically through competitive bidding by potential buyers. Options A, C, and D do not accurately describe the primary mechanism of price discovery in an auction. Negotiation might follow in some cases, but the core price setting is via bids. Government notification or auctioneer declaration are not the fundamental price-setting mechanisms.
There are various types of auctions, such as English auctions (ascending price), Dutch auctions (descending price), sealed-bid auctions, etc., but all involve a process where participants make offers (bids) that determine the final price.

Join Our Telegram Channel

18. Competitive advantage of a firm does not imply

Competitive advantage of a firm does not imply

Join Our Telegram Channel
lower price for same value
same price for higher value
same price and same value
matching core competencies to the opportunities
This question was previously asked in
UPSC SO-Steno – 2017
Download PDFAttempt Online
The correct answer is C. Competitive advantage implies offering something better than rivals, not the same price and same value.
Competitive advantage is achieved when a firm offers superior value to its customers compared to its rivals. This can be done in two primary ways:
A) Offering the same value (same quality/features) at a lower price (cost leadership).
B) Offering higher value (better quality/features) at the same price (differentiation).
C) Offering the same price and same value relative to competitors implies parity, not competitive advantage.
D) Matching core competencies to opportunities is a strategic process or strategy formulation that *leads* to competitive advantage, but it is not the definition of the advantage itself. The advantage is the *result* of this matching process.
The question asks what competitive advantage *does not imply*.
Michael Porter’s framework on competitive strategy identifies two basic types of competitive advantage: cost leadership and differentiation. Both involve providing superior value compared to competitors, either through lower cost or unique benefits.

Subscribe on YouTube

19. Which one is not a necessary condition for competitiveness of a firm ?

Which one is not a necessary condition for competitiveness of a firm ?

Subscribe on YouTube
Comparable quality of the product with that of rivals
Competitive price with rivals
Adequate returns to the firm
Economical use of resources by the firm
This question was previously asked in
UPSC SO-Steno – 2017
Download PDFAttempt Online
The correct answer is C. Adequate returns are a result, not a necessary condition, of competitiveness.
Competitiveness of a firm means its ability to perform successfully in the market against rivals. Necessary conditions for this often include offering comparable or superior quality (A), competitive pricing (B), and efficient use of resources (D) to control costs and improve quality. Adequate returns (profitability) are typically an outcome or consequence of being competitive, rather than a prerequisite for competing. A firm might be highly competitive (e.g., gaining market share) even while making low or negative returns initially due to strategic pricing or heavy investment.
Competitiveness is about a firm’s ability to deliver value to customers more effectively or efficiently than rivals. This value can be delivered through lower costs (cost leadership) or superior product/service differentiation. Resources (like capital, labour, technology) must be used economically to achieve either of these. Quality and price are key aspects of the product/service offering relative to competitors.

Join Our Telegram Channel

20. According to OECD report, what is the expected growth rate of India’s

According to OECD report, what is the expected growth rate of India’s economy in 2024-25 ?

Join Our Telegram Channel
5.5%
6.6%
7.2%
7.8%
This question was previously asked in
UPSC Combined Section Officer – 2024
Download PDFAttempt Online
According to the OECD report published in May 2024, the expected growth rate of India’s economy in 2024-25 is 6.6%.
In its Economic Outlook report released in May 2024, the Organisation for Economic Co-operation and Development (OECD) projected India’s GDP growth for the fiscal year 2024-25 (FY25) at 6.6%. This forecast was maintained from previous reports, reflecting strong domestic demand and investment.
Economic forecasts from international organizations like OECD, IMF, and World Bank are frequently updated based on evolving global and domestic economic conditions. These projections provide insights into the expected performance of an economy and are closely watched by policymakers and investors. The 2024-25 fiscal year in India runs from April 1, 2024, to March 31, 2025.

Subscribe on YouTube
Page 1Page 2Page 3Page 4Page 5