Nature of Indian Economy

71. As per the World Bank’s Ease of Doing Business Ranking, India’s rank h

As per the World Bank’s Ease of Doing Business Ranking, India’s rank has improved from 142 in 2014 to 63 in 2019. During this period, in which of the following parameters has India’s rank deteriorated?

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Ease of starting a business
Getting electricity
Registering property
Paying taxes
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UPSC CDS-2 – 2020
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India’s overall rank in the World Bank’s Ease of Doing Business improved significantly from 142 in 2014 to 63 in 2019 (DoDB 2020 report). This improvement was driven by reforms across multiple parameters. However, India’s performance in some specific parameters was less impressive or even saw a decline in rank relative to other countries.
While parameters like ‘Starting a Business’, ‘Getting Electricity’, and ‘Paying Taxes’ saw substantial improvements in India’s rank during this period, the parameter ‘Registering Property’ showed a deterioration in rank. This suggests that reforms related to property registration did not keep pace with the improvements seen globally or in other areas within India.
Specific ranks in the DoDB 2020 report (reflecting 2019 status) show India’s rank in ‘Registering Property’ at 154, which was worse than its rank in the DoDB 2015 report (reflecting 2014 status), where it was around 120. This contrasts sharply with parameters like ‘Getting Electricity’ (rank 25 in DoDB 2020 vs ~137 in DoDB 2015).

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72. The value of the slope of a normal demand curve is

The value of the slope of a normal demand curve is

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positive
negative
zero
infinity
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The value of the slope of a normal demand curve is negative. This reflects the inverse relationship between price and quantity demanded, known as the law of demand. As the price of a good increases, the quantity demanded by consumers typically decreases, and vice versa, assuming all other factors remain constant (ceteris paribus). When plotted with price on the vertical axis and quantity on the horizontal axis, this relationship results in a curve that slopes downwards from left to right.
The negative slope of the demand curve illustrates the law of demand, showing that price and quantity demanded move in opposite directions.
Exceptions to the law of demand, such as Giffen goods or Veblen goods, exist but are rare. For a typical good, the demand curve has a negative slope. The steepness of the slope indicates the responsiveness of quantity demanded to price changes (elasticity).

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73. Which one of the following statements with regard to economic models i

Which one of the following statements with regard to economic models is not correct ?

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They involve simplification of complex processes.
They represent the whole or a part of a theory.
They can be expressed only through equations.
They help in gaining an insight into cause and effect.
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Statement C is incorrect. Economic models are simplifications of reality used to understand complex economic processes. While they can be expressed through equations (mathematical models), they can also be represented through diagrams (like supply and demand curves), graphs, or even verbal descriptions. Therefore, stating they can be expressed *only* through equations is wrong.
Economic models serve as tools for analysis and prediction, simplifying complex relationships. They are representations of theories, not the theories themselves.
Models help economists isolate specific variables, identify cause-and-effect relationships, and forecast outcomes based on given assumptions. The effectiveness of a model is judged by its predictive power and ability to explain real-world phenomena, not solely by the method of expression.

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74. The working of the price mechanism in a free-market economy refers to

The working of the price mechanism in a free-market economy refers to which one of the following ?

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The interplay of the forces of demand and supply
Determination of the inflation rate in the economy
Determination of the economy's propensity to consume
Determination of the economy's full employment output
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UPSC CDS-2 – 2019
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In a free-market economy, the price mechanism is the system where the forces of supply and demand determine the prices of goods and services and coordinate the allocation of resources. Prices act as signals, communicating information between buyers and sellers.
The price mechanism is a fundamental concept in microeconomics, explaining how markets tend towards equilibrium without central planning.
The interplay of demand and supply directly leads to price determination. Changes in demand or supply cause prices to adjust, signaling producers to increase or decrease output and consumers to alter their consumption choices. Options B, C, and D describe macroeconomic outcomes or behavioral tendencies that are influenced by, but are not the definition of, the price mechanism itself.

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75. Which of the following statements about ‘Invest India’ is/are correct?

Which of the following statements about ‘Invest India’ is/are correct?

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  • 1. It is a joint venture (not for profit) company.
  • 2. It is the National Investment Promotion and Facilitation Agency of India.

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1 only
2 only
Both 1 and 2
Neither 1 nor 2
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UPSC CDS-2 – 2019
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Both statements 1 and 2 are correct.
Invest India is the National Investment Promotion and Facilitation Agency of India. It is structured as a not-for-profit company under Section 8 of the Companies Act, 2013. It is indeed a joint venture, with stakeholders from government (Department for Promotion of Industry and Internal Trade – DPIIT), industry associations (FICCI, CII, ASSOCHAM), and State Governments.
Invest India assists investors looking to set up, operate, and expand their businesses in India. It offers sector-specific intelligence, policy analysis, location identification, and hand-holding support to domestic and foreign investors.

76. The natural rate of unemployment hypothesis was advocated by

The natural rate of unemployment hypothesis was advocated by

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Milton Friedman
A. W. Phillips
J. M. Keynes
R. G. Lipsey
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The correct answer is Milton Friedman.
The natural rate of unemployment hypothesis was prominently advocated by Milton Friedman and Edmund Phelps in the late 1960s. It posits that there is a specific level of unemployment consistent with a stable rate of inflation, influenced by structural and frictional factors in the labor market.
This hypothesis challenged the conventional view derived from the simple Phillips curve which suggested a stable trade-off between inflation and unemployment. Friedman argued that attempts to keep unemployment below its natural rate through expansionary policies would only lead to accelerating inflation without a permanent reduction in unemployment.

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77. According to the World Bank’s Doing Business Report, 2018, India’s ran

According to the World Bank’s Doing Business Report, 2018, India’s ranking has improved in 2018 as compared to 2017 in which of the following areas?

  • 1. Paying taxes
  • 2. Resolving insolvency
  • 3. Starting a business
  • 4. Getting electricity

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1 only
1 and 2 only
1, 2 and 3
2, 3 and 4
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UPSC CDS-2 – 2018
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The correct answer is D.
According to the World Bank’s Doing Business 2018 report (based on data from 2017), India significantly improved its ranking overall. Areas where India’s ranking improved included Getting electricity, Paying taxes, Resolving insolvency, Starting a business (marginal improvement), Trading across Borders, Enforcing Contracts, and Protecting Minority Investors. Among the options provided, areas showing improvement were 1. Paying taxes (significant), 2. Resolving insolvency (significant), 3. Starting a business (marginal), and 4. Getting electricity (significant). Option D includes three of these improved areas: 2, 3, and 4.
India’s jump to 100th rank in the Doing Business 2018 report from 130th in 2017 was a major highlight. The improvements were attributed to various reforms like the Insolvency and Bankruptcy Code (Resolving insolvency), GST (Paying taxes), and efforts to streamline processes for getting electricity connections and starting businesses, though the impact on the ‘Starting a business’ ranking was less pronounced compared to others in that year’s report. While Paying Taxes also saw significant improvement (1), option D excludes it while including the marginally improved Starting a Business (3) alongside major improvements in Resolving Insolvency (2) and Getting Electricity (4). This suggests a specific emphasis or interpretation used in the question’s source.

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78. Who among the following scholars argued that “capital created underdev

Who among the following scholars argued that “capital created underdevelopment not because it exploited the undeveloped world, but because it did not exploit it enough”?

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Bill Warren
Paul Baran
Geoffrey Kay
Lenin
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Bill Warren is the scholar who made the argument that “capital created underdevelopment not because it exploited the undeveloped world, but because it did not exploit it enough”.
This quote is a central theme in Bill Warren’s work, particularly in his book *Imperialism: Pioneer of Capitalism* (published posthumously in 1980). Warren, a Marxist, critiqued dependency theory and argued against the idea that imperialism solely created underdevelopment. He contended that capitalism, historically, played a progressive role by introducing capitalist social relations and development potential, and that the *failure* of true capitalist development and exploitation in the periphery was the reason for continued underdevelopment, rather than excessive exploitation by advanced capitalist nations.
Paul Baran was a key figure in early dependency theory, arguing that capitalism actively created underdevelopment in the periphery through surplus extraction. Geoffrey Kay also contributed to Marxist theories of development and underdevelopment, often engaging with Warren’s arguments. Lenin’s work on imperialism (`Imperialism, the Highest Stage of Capitalism`) focused on the economic roots of inter-imperialist rivalry and the export of capital but did not frame the underdevelopment argument in the terms of insufficient exploitation as Warren did.

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79. Which of the following indicators have been used by the World Economic

Which of the following indicators have been used by the World Economic Forum to calculate Global Competitiveness Index for 2016-17?

  • Efficiency enhancer subindex
  • Innovation and sophistication factors subindex
  • Life expectancy enhancer subindex

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1 and 2 only
2 and 3 only
1 and 3 only
1, 2 and 3
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UPSC CDS-2 – 2017
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The correct answer is 1 and 2 only.
The World Economic Forum’s Global Competitiveness Index (GCI) framework typically assesses national competitiveness based on a set of pillars, which are grouped into three sub-indices:
1. Basic Requirements (institutions, infrastructure, macroeconomic environment, health and primary education)
2. Efficiency Enhancers (higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size)
3. Innovation and Sophistication Factors (business sophistication, innovation)
Statements 1 (Efficiency enhancer subindex) and 2 (Innovation and sophistication factors subindex) correspond to two of these main sub-indices. Statement 3 (“Life expectancy enhancer subindex”) is not a component used in the GCI framework. While health is a pillar under ‘Basic Requirements’, there isn’t a dedicated ‘Life expectancy enhancer subindex’.
The GCI framework and its pillars have been refined over the years, but the general structure around Basic Requirements, Efficiency Enhancers, and Innovation and Sophistication has remained central to the methodology used around 2016-17. The sub-indices are aggregates of various specific pillars.

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80. Which of the following statements about India’s rank in the Global Inn

Which of the following statements about India’s rank in the Global Innovation Index-2023, published by the World Intellectual Property Organisation, is/are correct?

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  • 1. India has been placed at 40th rank.
  • 2. India has been on a rising trajectory over the period 2015-2023.

Select the correct answer using the code given below.

1 only
2 only
Both 1 and 2
Neither 1 nor 2
This question was previously asked in
UPSC CDS-1 – 2024
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Both statements about India’s rank in the Global Innovation Index-2023, published by the World Intellectual Property Organisation, are correct.
Statement 1 is correct. In the Global Innovation Index (GII) 2023, India was indeed ranked 40th among 132 economies.
Statement 2 is correct. India has shown a consistent upward trend in its GII ranking, improving significantly from 81st in 2015 to 40th in 2023. This represents a substantial rise in innovation performance over the period.
The Global Innovation Index is an annual ranking published by WIPO, tracking innovation trends globally. India’s consistent rise is attributed to efforts in various areas including research and development, startup ecosystem growth, and improved innovation inputs and outputs.

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