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6A) Macroeconomy (Prelims PYQs)

5A) Macroeconomy (Prelims PYQs)

2023 Prelims PYQs

1] Consider the following statements: [2023]

Statement-I :
In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes.
Statement-II:
Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means

Which of the following is correct in respect of the above statements?
a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I.
b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I.
c) Statement-I is correct but Statement-II is incorrect.
d) Statement-I is incorrect but Statement-II is correct.

Show Answer

Ans: a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I.

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2022 Prelims PYQs

1] Which of the following activities constitute a real sector in the economy? [2022]

1. Farmers harvesting their crops
2. Textile mills converting raw cotton into fabrics
3. A commercial bank lending money to a trading company
4. A corporate body issuing Rupee Denominated Bonds overseas
Select the correct answer using the codes given below

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

Show Answer

Ans: a) 1 and 2

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2021 Prelims PYQs

1] Which among the following steps is most likely to be taken at the time of an economic recession? [2021]

a) Cut in tax rates accompanied by increase in interest rate
b) Increase in expenditure on public projects
c) Increase in tax rates accompanied by reduction of interest rate
d) Reduction of expenditure on public projects

Show Answer

Ans: b) Increase in expenditure on public projects

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2] Consider the following statements: [2021]

Other things remaining unchanged, market demand for a good might increase if
1) Price of its substitute increases
2) Price of its complement increases
3) The good is an inferior good and income of the consumers increases
4) Its price falls
Which of the above statements are correct?

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

Show Answer

Ans: a) 1 and 4 only

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2020 Prelims PYQs

1] With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: [2020]

1. Worker productivity (Rs. per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.
2. The percentage share of rural areas in the workforce steadily increased.
3. In rural areas, the growth in non-farm economy increased.
4. The growth rate in rural employment decreased.
Which of the statements given above is/are Correct?

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

Show Answer

Ans: b) 3 and 4 only

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2019 Prelims PYQs

1] Consider the following statements: [2019]

1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.
2. In terms of PPP dollars, India is the sixth largest economy in the world.
Which of the statements given above is/are correct?

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

Show Answer

Ans: a) 1 only

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2018 Prelims PYQs

1] Which one of the following statements correctly describes the meaning of legal tender money? [2018]

a) The money which is tendered in courts of law to defray the fee of legal cases
b) The money which a creditor is under compulsion to accept in settlement of his claims
c) The bank money in the form of cheques, drafts, bill of exchange, etc.
d) The metallic money in circulation in a country

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Ans: b) The money which a creditor is under compulsion to accept in settlement of his claims

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2] If a commodity is provided free to the public by Government, then: [2018]

a) The opportunity cost is zero.
b) The opportunity cost is ignored.
c) The opportunity cost is transferred from the consumers of the product to the tax paying public.
d) The opportunity cost is transferred from the consumers of the product to the Government.

Show Answer

Ans: c) The opportunity cost is transferred from the consumers of the product to the tax paying public.

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3] Increase in absolute and per capita real GNP do not connote a higher level of economic development,if: [2018]

a) Industrial output fails to keep pace with agricultural output.
b) Agricultural output fails to keep pace with industrial output.
c) Poverty and unemployment increases.
d) Imports grow faster than exports.

Show Answer

Ans: c) Poverty and unemployment increases.

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4] Despite being a high saving economy, capital formation may not result in significant increase in output due to: [2018]

a) Weak administrative machinery
b) Illiteracy
c) High population density
d) High capital-output ratio

Show Answer

Ans: d) High capital-output ratio

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2017 Prelims PYQs

1] Which of the following has/have occurred in India after its liberalization of economic policies in 1991? [2017]

1. Share of agriculture in GDP increased enormously.
2. Share of India’s exports in world trade increased.
3. FDI inflows increased.
4. India’s foreign exchange reserves increased enormously.
Select the correct answer using the codes given below:

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

Show Answer

Ans: b) 2, 3 and 4 only

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2015 Prelims PYQs

1] With reference to India economy, consider the following statements: [2015]

1. The rate of growth of real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade
Which of the statement given above is/are correct?

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

Show Answer

Ans: b) 2 only

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2] The problem of international liquidity is related to the non-availability of: [2015]

a) Goods and services
b) Gold and silver
c) Dollars and other hard currencies
d) Exportable surplus

Show Answer

Ans: c) Dollars and other hard currencies

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3] A decrease in tax to GDP ratio of a country indicates which of the following? [2015]

1. Slowing economic growth rates
2. Less equitable distribution of national income
Select the correct answer using the code given below.

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

Show Answer

Ans: a) 1 only

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2013 Prelims PYQs

1] Economic growth in country X will necessarily have to occur if? [2013]

a) There is technical progress in the world economy
b) There is population growth in X
c) There is capital formation in X
d) The volume of trade grows in the world economy

Show Answer

Ans: c) There is capital formation in X

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2] The national income of a country for a given period is equal to the __? [2013]

a) Total value of goods and services produced by the nationals
b) Sum of total consumption and investment expenditure
c) Sum of personal income of all individuals
d) Money value of final goods and services produced

Show Answer

Ans: d) Money value of final goods and services produced

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2012 Prelims PYQs

1] Under which of the following circumstances may ‘capital gains’ arise? [2012]

1. When there is an increase in the sales of a product
2. When there is a natural increase in the value of the property owned
3. When you purchase a painting and there is a growth in its value due to increase in its popularity

Select the correct answer using the codes given below:
a) 1 Only                             b) 2 & 3 Only
c) 2 Only                             d) 1,2 & 3 Only

Show Answer

Ans: b) 2 & 3 Only

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2011 Prelims PYQs

1] In the context of Indian economy, consider the following statements? [2011]

1. The growth rate of GDP has steadily increased in the last five years.
2. The growth rate in per capita income has steadily increased in the last five years.

Which of the statements given above is/are correct?
a) 1 only                            b) 2 only
c) Both 1 and 2                 d) Neither 1 nor 2

Show Answer

Ans: d) Neither 1 nor 2

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2] Economic growth is usually coupled with? [2011]

a) Deflation                       b) Inflation.
c) Stagflation                    d) Hyperinflation

Show Answer

Ans: b) Inflation.

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3] A ‘closed economy” is an economy in which? [2011]

a) The money supply is fully controlled.
b) Deficit financing  takes place.
c) Only exports take place.
d) Neither exports nor imports take place.

Show Answer

Ans: d) Neither exports nor imports take place.

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UPSC Prelims PYQ Book
  • Collection of more than 3200 Previous Year Questions (1995-2023)
  • All questions divided into 10 Subjects
  • Subject further sub-divided into more than 75 topics
  • All answers according to official answer key
  • BEST PYQ CLASSIFICATION EVER !

2010-1995 Prelims PYQs

1] With reference to the Indian economy, consider the following statements: [2010]

1. The Gross Domestic Product (GDP) has increased by four times in the last 10 years.
2. The percentage share of Public Sector in GDP has declined in the last 10 years.

Which of the statements given above is/are correct?
a) 1 only                            b) 2 only
c) Both 1 and 2                 d) Neither 1 nor 2

Show Answer

Ans: b) 2 only

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2] In the context of Indian economy, consider the following pairs: Term Most appropriate description: [2010]

1. Melt down ‘ Fall in stock prices
2. Recession ‘ Fall in growth rate
3. Slow down ‘ Fall in GDP

Which of the pairs given above is / are correctly matched?
a) 1 only                            b) 2 and 3 only
c) 1 and 3 only                  d) 1, 2 and 3

Show Answer

Ans: a) 1 only  

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3] Which of the following is / are treated as artificial currency? [2010]

a) ADR                  b) GDR
c) SDR                  d) Both ADR and SDR

Show Answer

Ans: c) SDR 

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4] Which one of the following statements is an appropriate description of deflation? [2010]

a) It is a sudden fall in the value of a currency against other currencies.
b) It is a persistent recession in both the financial and real sectors of economy.
c) It is a persistent fall in the general price level of goods and services.
d) It is a fall in the rate of inflation over a period of time.

Show Answer

Ans: c) It is a persistent fall in the general price level of goods and services.

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5] In the context of independent India’s Economy, which one of the following was the earliest event to take place? [2009]

a) Nationalisation of Insurance companies
b) Nationalisation of State Bank of India
c) Enactment of Banking Regulation act
d) Introduction of First Five-Year Plan

Show Answer

Ans: c) Enactment of Banking Regulation act

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6] Which one of the following is the correct sequence in the decreasing order of contribution of different sectors to the Gross Domestic Product of India.? [2007]

a) Service- Industry- Agriculture
b) Service-Agriculture-Industry
c) Industry- Services-Agriculture
d) Industry-Agriculture-Services

Show Answer

Ans: a) Service- Industry- Agriculture

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7] Which one among the following countries has the lowest GDP per capita? [2003]

a) China              b) India
c) Indonesia       d) Sri Lanka

Show Answer

Ans: b) India

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8] Which reference to the Indian economy, consider the following activities: [2002]

1. Agriculture, Forestry and Fishing
2. Manufacturing
3. Trade, Hotels Transport and Communication
4. Financing, Insurance, Real Estate and Business services

The decreasing order of the contribution of these sectors to the Gross Domestic Product (GDP) at factor cost at constant prices (2000’01) is
a) 3, 1, 2, 4           b) 1, 3, 4, 2
c) 3, 4, 1, 2           d) 1, 3, 2, 4

Show Answer

Ans: c) 3, 4, 1, 2

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9] Global capital flows to developing countries increased significantly during the nineties. In view of the East Asian financial crisis and Latin American experience, which type of inflow is good for the host country? [2002]

a) Commercial loans
b) Foreign Direct Investment
c) Foreign Portfolio Investment
d) External Commercial Borrowings

Show Answer

Ans: b) Foreign Direct Investment

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10] A country is said to be in debt trap if: [2002]

a) It has to abide by the conditionalities imposed by the International Monetary Fund
b) It has to borrow to make interest payments to on outstanding loans
c) It has been refused loans or aid by creditors abroad
d) The World Bank charges a very high rate of interest on outstanding as well as new loans

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Ans: b) It has to borrow to make interest payments to on outstanding loans

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11] The term National Income represents: [2001]

a) Gross National Product at market prices minus depreciation
b) Gross National Product at market prices minus depreciation and net factor income from abroad
c) Gross National Product at market prices minus depreciation and indirect taxes plus subsidies
d) Gross National Product at market prices minus net factor income from abroad

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Ans: c) Gross National Product at market prices minus depreciation and indirect taxes plus subsidies

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12] Consider the following States: [2001]

I. Gujarat
II. Karnataka
III. Maharashtra
IV. Tamil Nadu.

The descending order of these States with reference to their level of Per Capita Net State Domestic Product is
a) I, III, IV, II                        b) II, I, IV, III
c) I, III, II, IV                        d) III, I, II, IV

Show Answer

Ans: d) III, I, II, IV

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13] The most appropriate measure of a country’s economic growth is its: [2001]

a) Gross Domestic Product
b) Net Domestic Product
c) Net National Product
d) Per Capita Real Income

Show Answer

Ans: d) Per Capita Real Income

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14] The growth rate of per capita income at current prices is higher than that of per capita income at constant prices, because the latter takes into account the rate of: [2000]

a) Growth of population
b) Increase in price level
c) Growth of money supply
d) Increase in the wage rate

Show Answer

Ans: b) Increase in price level

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15] The new Gross Domestic Product (GDP) series released by the Central Statistical Organisation (CSO) in February 1999 is with reference to base price of: [2000]

a) 1991-’92                         b) 1992-’93
c) 1993′-94                         d) 1994′-95

Show Answer

Ans: c) 1993′-94

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16] Match List I with List II and select the correct answer using the codes given below the Lists: [2000]

List I     List II
I. BoomA) Business activity at high level with increasing income, output and employment at macro level
II. RecessionB) Gradual fall of income, output and employment with business activity in a low gear
III. Depression C) Unprecedented level of under employment and unemployment, drastic fall in income, output and employment
IV. RecoveryD) Steady rise in the general level of prices, income, output and employment

Codes:
a) I’A, II’B, III’C, IV’D
b) I’A, II’B, III’D, IV’C
c) I’B, II’A, III’D, IV’C
d) I’B, II’A, III’C, IV’D

Show Answer

Ans: a) I’A, II’B, III’C, IV’D

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17] In an open economy, the national income (Y) of the economy is: (C, I, G, X, M stand for Consumption, Investment, Govt. Expenditure, total exports and total imports respectively: [2000]

a) Y = C + I + G + X
b) Y = C + I + G – X + M
c) Y = C + I + G + (X – M)
d) Y = C + I – G + X – M

Show Answer

Ans: c) Y = C + I + G + (X – M)

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18] Since 1980, the share of the tertiary sector in the total GDP of India has: [1999]

a) Shown an increasing trend
b) Shown a decreasing trend
c) Remained constant
d) Been fluctuating

Show Answer

Ans: a) Shown an increasing trend

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19] A consumer is said to be in equilibrium, if: [1998]

a) He is able to fulfil his need with a given level of income
b) He is able to live in full comforts with a given level of income
c) He can fulfil his needs without consumption of certain items
d) He is able to locate new sources of income

Show Answer

Ans: a) He is able to fulfil his need with a given level of income

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20] The supply-side economics lays greater emphasis on the point of view of: [1998]

a) Producer                       b) Global economy
c) Consumer                     d) Middle-man

Show Answer

Ans: a) Producer

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21] National Income is the: [1997]

a) Net National Product at market price
b) Net National Product at factor cost
c) Net Domestic Product at market price
d) Net Domestic Product at factor cost

Show Answer

Ans: b) Net National Product at factor cost

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22] A redistribution of income in a country can be best brought about through: [1996]

a) Progressive taxation combined with progressive expenditure
b) Progressive taxation combined with regressive expenditure
c) Regressive taxation combined with regressive expenditure
d) Regressive taxation combined with progressive expenditure

Show Answer

Ans: a) Progressive taxation combined with progressive expenditure

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23] Which one of the following is correct regarding stabilization and structural adjustment as two components of the new economic policy adopted in India? [1996]

a) Stabilization is a gradual, multi-step process while structural adjustment is a quick adaptation process
b) Structural adjustment is a gradual, multi-step process, while stabilization is a quick adaptation process
c) Stabilization and structural adjustment are very similar and complementary policies. It is difficult to separate one
from the other
d) Stabilization mainly deals with a set of policies which are to be implemented by the Central Government while structural adjustment is to be set in motion by the State Governments

Show Answer

Ans: b) Structural adjustment is a gradual, multi-step process, while stabilization is a quick adaptation process

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24] The main reason for low growth rate in India, in spite of high rate of savings and capital formation is: [1995]

a) High birth rate
b) Low level of foreign aid
c) Low capital / output ratio
d) High capital / output ratio

Show Answer

Ans: d) High capital / output ratio

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  • Collection of more than 3200 Previous Year Questions (1995-2023)
  • All questions divided into 10 Subjects
  • Subject further sub-divided into more than 75 topics
  • All answers according to official answer key
  • BEST PYQ CLASSIFICATION EVER !
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