UPSC CSE Prelims Questions

With reference to physical capital in the Indian economy, consider the following pairs:

	Items	Category
1.	Farmer’s plough	Working capital
2.	Computer	Fixed capital
3.	Yarn used by the weaver	Fixed capital
4.	Petrol	Working capital

How many of the above pairs are correctly matched?

(a) Only one
(b) Only two
(c) Only three
(d) All four

Correct Answer: (b) Only two

Explanation:

• Pair 1 is incorrect. A farmer’s plough is considered fixed capital because it is a long-term asset.
• Pair 2 is correct. A computer is considered fixed capital as it is a long-term asset used in production.
• Pair 3 is incorrect. Yarn used by the weaver is considered working capital as it is a consumable item used in production.
• Pair 4 is correct. Petrol is considered working capital as it is consumed in the process of production.
  Possible Sources: Economics textbooks on physical capital.

Consider the following materials:

1. Agricultural residues
2. Corn grain
3. Wastewater treatment sludge
4. Wood mill waste

Which of the above can be used as feedstock for producing Sustainable Aviation Fuel?

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

Correct Answer: (c) 1, 2, 3 and 4

Explanation:
All the listed materials—agricultural residues, corn grain, wastewater treatment sludge, and wood mill waste—can be used as feedstock for producing Sustainable Aviation Fuel (SAF).
Possible Sources: References on biofuels and sustainable aviation fuel production.

With reference to the sectors of the Indian economy, consider the following pairs:

	Economic activity	Sector
1.	Storage of agricultural produce	Secondary
2.	Dairy farm	Primary
3.	Mineral extraction	Tertiary
4.	Weaving cloth	Secondary

How many of the pairs given above are correctly matched?

(a) Only one
(b) Only two
(c) Only three
(d) All four

Correct Answer: (b) Only two

Explanation:

• Pair 1 is incorrect. Storage of agricultural produce is considered part of the Tertiary sector (services).
• Pair 2 is correct. A Dairy farm is part of the Primary sector (agriculture and allied activities).
• Pair 3 is incorrect. Mineral extraction is part of the Primary sector.
• Pair 4 is correct. Weaving cloth is part of the Secondary sector (manufacturing).
  Possible Sources: Economics textbooks and sector classification references.

Consider the following:

1. Exchange-Traded Funds (ETF)
2. Motor vehicles
3. Currency swap

Which of the above is/are considered financial instruments?

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

Correct Answer: (d) 1 and 3 only

Explanation:

• Exchange-Traded Funds (ETFs) and Currency swaps are considered financial instruments.
• Motor vehicles are not financial instruments; they are physical assets.
  Possible Sources: Financial market references.

In India, which of the following can trade in Corporate Bonds and Government Securities?

1. Insurance Companies
2. Pension Funds
3. Retail Investors

Select the correct answer using the code given below:

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

Correct Answer: (d) 1, 2 and 3

Explanation:

• Insurance Companies, Pension Funds, and Retail Investors can all trade in Corporate Bonds and Government Securities in India.
  Possible Sources: Securities market regulations and guidelines from SEBI and RBI.

Consider the following statements:

1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India.
2. In India, Foreign Institutional Investors can hold the Government Securities (G-Secs).
3. In India, Stock Exchanges can offer separate platforms for debts.

Which of the following statements is/are correct?

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

Correct Answer: (d) 2 and 3 only

Explanation:

• Statement 1 is incorrect because Non-Banking Financial Companies (NBFCs) in India generally do not have access to the Liquidity Adjustment Facility (LAF) window of the Reserve Bank of India.
• Statement 2 is correct. Foreign Institutional Investors (FIIs) can hold Government Securities (G-Secs) in India.
• Statement 3 is correct. Stock Exchanges in India can offer separate platforms for debt instruments.
  Possible Sources: Financial regulations and RBI guidelines.