Search Previous Year Questions

The correct answer is 5.

Key Points

• The total number of  Lok Sabha constituencies from Uttarakhand is 5. 

1. Almora (SC)

2. Garhwal

3. Nainital

4. Haridwar

5. Tehri

Additional Information

• The Lok Sabha (meaning "House of the People") is the Lower House of the Parliament of India.
• Members are elected for Five years with first-past-the-post voting.
• The number of seats, allocated to the state/union territory are determined by the population of the state/union territory.

The correct answer is on foreign exchange transactions.

Key Points

Tobin tax

• It is a proposed tax on Short-Term Currency Transactions.
• A Tobin tax is designed to deter only speculative flows of hot money—money that moves regularly between financial markets in search of high short-term interest rates.
• It is not meant to impact Long-Term Investments.
• The shorter the investment cycle (i.e., the time between buying and selling a currency), the higher the effective rate of tax—thus providing market-based incentives for lengthening the term structure of investments.

The correct answer is the Agricultural Produce Market Committee Act enacted by States

Key Points

Agricultural Produce Market Committee:

• Agricultural Produce Market Committee (APMC) under the State Government regulates the notified agricultural produce and livestock.
• Agriculture is a State subject under Schedule 7 of the Indian Constitution.
• The whole geographical area in the State is divided and declared as a market area (Yard Mandis) wherein the markets are managed by the Market Committees constituted by the State Governments.
• Once a particular area is declared a market area and falls under the jurisdiction of a Market Committee, no person or agency is allowed freely to carry on wholesale marketing activities.
• Buyers, too, need to obtain individual licenses from each APMC to transact.
• It is a part of government policy toward food security, remunerative prices to farmers, and fair prices to consumers

Additional Information

  Essential Commodities Act, 1955

• The main objective is to ensure the Affordability of essential commodities for the poor by restricting hoarding. To make this happen, this act controls the production, supply and distribution of, and trade and commerce in certain goods which are treated as essential commodities.
• It however affects the development of agricultural markets by creating distortions in the market.
• It does not distinguish between firms that genuinely need to hold stocks owing to the nature of their operations and firms that use them for speculation.
• The impositions by the Act are ineffective in controlling the price volatility.
• In the long term, the ECA Disincentivizes the development of storage infrastructure thereby leading to increased volatility in prices following production or consumption shocks.
• The conviction rate under the ECA is at 2-4%, which indicates that raids under the act may only lead to harassment of traders. The Act while penalizing manipulative hoarding also ends up punishing the consumption smoothening that the storage facilities provide.

The correct answer is It is a statutory body.

Key Points 

National Development Council (NDC) 

• It is the apex body for decision-making and discussions on development matters in India presided over by the Prime Minister.
• National Development Council was set up on August 6, 1952.
• It is Non-constitutional and non-statutory. (Option 2 is correct and option 3 is incorrect )
• The secretary of the Planning Commission is also the secretary of the NDC.
• It should meet at least twice a year. (Option 4 is correct)
• Composition:

1. Prime Minister
2. All the Union Cabinet Ministers
3. Chief Ministers of all States or their substitutes (Option 1 is correct)
4. Representatives of the union territories and
5. The members of the Planning Commission.

Additional InformationFunctions:

• To empower and mobilize the effort and resources of the nation in support of the Plan.
• To promote common economic policies in all vital spheres, and
• To ensure the balanced and rapid development of all parts of the country.

The correct answer is Strengthening of capital market.

Key Points

​11^th Five-Year Plan: 

• Its duration was from 2007 to 2012, under the leadership of Manmohan Singh.
• It was prepared by C. Rangarajan.
• Its main theme was “Rapid and More Inclusive Growth”.
• Assessment:
• India has recorded an average annual economic growth rate of 8%, farm sector grew at an average rate of 3.7% as against the 4% targeted.
• The industry grew with an annual average growth of 7.2% against the 10% targeted.
• Objectives:
• Rapid and inclusive growth.
• Empowerment through education and skill development.
• Reduction of gender inequality.
• Environmental sustainability.
• To increase the growth rate in agriculture, industry, and services to 4%,10% and 9% respectively.
• Provide clean drinking water for all by 2009.

Additional Information 

• The Constitution came into force on 26 January 1950.
• Subsequently, Planning Commis­sion was set up on 15 March 1950 and the plan era started from 1 April 1951 with the launch­ing of the First Five Year Plan (1951-56).
• All Five Year Plans:

The correct answer is It grants loans to only member countries.

Key Points

International Monetary Fund (IMF)

• Working areas:
• Foster global monetary cooperation.
• Facilitate international trade.
• Reduce poverty around the world.
• To secure financial stability by eliminating or minimizing the exchange rate stability.
• To promote high employment through economic assistance and sustainable economic growth.

Additional Information 

• Came into force in 1945, the IMF is governed by and accountable to the 190 countries that make up its near-global membership.
• Headquarters- Washington, D.C
• The International Monetary Fund (IMF) is an organization of 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The correct answer is ​​An appreciation of a currency.

 Key Points

• Currency Appreciation is an increase in the value of one currency in relation to another currency.
• Currencies appreciate against each other for a variety of reasons, including government policy, interest rates, trade balances, and business cycles.
• Appreciation is directly linked to demand.
• If the value appreciates (or goes up), demand for the currency also rises (or less supply of domestic currency in the global market).
• In contrast, if a Currency Depreciates, it loses value against the currency against which it is being traded.

Additional Information

• In a Floating Rate Exchange System, the value of a currency constantly changes based on supply and demand in the forex market. 
• If a country is fixing the exchange rate, official adjustments to the fixed exchange rate are called currency revaluation and devaluation.
• In the short run, currency Appreciation and Depreciation are driven by changes in demand and supply for a currency in the foreign exchange market.
• The demand and supply of currency depend on a country’s imports and exports, international financial transactions, speculations on the foreign exchange market, and, under “dirty float,” government interventions in the foreign exchange market.
• In the long run, currency appreciations and depreciations are determined by the inflation rate and economic growth of the country.
• When a nation's currency appreciates, it can have a number of different effects on the economy. 
• Exports decrease: If the Indian Rupee appreciates, foreigners will find Indian goods more expensive because they have to spend more on those goods.
• Hence it decreases the competitiveness of the domestic exports in the foreign markets and eventually leads to a reduction in the gross domestic product (GDP), which is definitely not a benefit.
• Cheaper imports: With the appreciation of the Indian rupee, imports become cheaper.
• As a result demand for foreign goods increases in the Indian markets while the demand for local products fall.

The correct answer is 1 only.

Key Points 

• Inflation redistributes wealth from creditors to debtors i.e. lenders suffer and borrowers benefit out of inflation.
• Bondholders have lent money (to debtor) and received a bond in return.
• So he is a lender, he suffers (Debtor benefits from inflation).

​​​

Additional Information 

• What is Inflation?
• Inflation refers to the rise in the prices of most goods and services of daily or common use, such as food, clothing, housing, recreation, transport, consumer staples, etc.
• Inflation measures the average price change in a basket of commodities and services over time.
• The opposite and rare fall in the price index of this basket of items is called ‘Deflation’.
• Inflation is indicative of the decrease in the purchasing power of a unit of a country’s currency. This could ultimately lead to a deceleration in economic growth.
• However, a moderate level of inflation is required in the economy to ensure that production is promoted.
• Who measures Inflation in India?
• Inflation is measured by a central government authority, which is in charge of adopting measures to ensure the smooth running of the economy.
• In India, the Ministry of Statistics and Programme Implementation measures inflation.
• In India, inflation is primarily measured by two main indices — WPI (Wholesale Price Index) and CPI (Consumer Price Index) which measure wholesale and retail-level price changes, respectively.
• The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics etc, which Indian consumers buy for use.

The correct answer is Both (2) and (3).

Key Points

1991 Economic Reforms:

• The 1991 economic reforms refer to the economic liberalization of the country’s economic policies with the goal of making the economy more market and service-oriented and expanding the role of private and foreign investment.
• It was part of a general pattern of economic liberalization and modernization occurring across the world in the late 20^th century.

Major outcomes of the reforms:

• 1991 reforms ushered in an era of high growth, declining poverty, a burgeoning, aspirational middle class and the very real possibility of a seat on the global stage.
• By the first decade of the 21^st century, India began to be seen as one of the fastest-growing emerging markets.
• The 1991 reforms unleashed the energies of Indian entrepreneurs, gave untold choices to consumers and changed the face of the Indian economy.
• Far from poverty increasing, for the first time, there was a substantial reduction in it.
• From 1992 to 2005, foreign investment increased 316.9%, and India’s GDP grew from $266 billion in 1991 to $2.3 trillion in 2018.

The correct answer is Employees of the company. 

Key Points 

• “Sweat Equity” shares mean equity shares issued by a company to its Employees or Directors at a discount or for consideration other than cash.
• In other words, it refers to the allotment of equity shares to employees as compensation for the efforts and hard work in providing intangibles, like growth or success, for the company.
• The issuing of sweat equity allows the company to attract and retain its employees by rewarding them for their contribution.

Additional Information 

• Equity shares are also known as ordinary shares. The holders of Equity shares are members of the company and have voting rights.
• Preference shares are the shares that promise the holder a fixed dividend, whose payment takes priority over that of equity share dividends. Preference shareholders do not have voting rights.
• A person having the debentures is called a debenture holder.
• A debenture is a form of loan procured by the company from the public.