2022 Prelims Paper 1 UPSC Question Paper

2022 Prelims Paper 1 UPSC Questions

1.
Rapid Financing Instrument" and "Rapid Credit Facility" are related to the provisions of lending by which one of the following?
A.
Asian Development Bank
B.
International Monetary Fund
C.
United Nations Environment Programme Finance Initiative
D.
World Bank
ANSWER :
B. International Monetary Fund
2.

With reference to the Indian economy, consider the following statements:
1. An increase in the Nominal Effective Exchange Rate (NEER) indicates the appreciation of the rupee.
2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness.
3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER.
Which of the above statements is correct?

A.

1 and 2 only

B.

2 and 3 only

C.

1 and 3 only

D.

1, 2 and 3

ANSWER :

C. 1 and 3 only

3.

With reference to the Indian economy. consider the following statements:
1. If the inflation is too high, the Reserve Bank of India (RBI) is likely to buy government securities.
2 If the rupee is rapidly depreciating, RBI is likely to sell dollars in the market.
3. If interest rates in the USA or European Union were to fall, that is likely to induce RBI to buy dollars.
Which of the statements given above are correct?

A.

1 and 2 only

B.

2 and 3 only

C.

1 and 3 only

D.

1, 2 and 3

ANSWER :

B. 2 and 3 only

4.

With reference to the "G20 Common Framework". consider the following statements:
1. It is an initiative endorsed by the G20 together with the Paris Club
2. It is an initiative to support Low Income Countries with unsustainable debt.
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

ANSWER :

C. Both 1 and 2

5.

With reference to the Indian economy, what are the advantages of "Inflation-Indexed Bonds (IIBs)”?
1. The government can reduce the coupon real sector in the economy
2. IIBs provide protection to investors from uncertainty regarding inflation.
3. The interest received as well as capital gains on IIBs are not taxable.
Which of the statements given above are correct?

A.

1 and 2 only

B.

2 and 3 only

C.

1 and 3 only

D.

1, 2 and 3

ANSWER :

A. 1 and 2 only

6.

With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?
1. They can sell their own goods in addition to offering their platforms as marketplaces.
2. The degree to which they can own big sellers on their platforms is limited.
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

ANSWER :

B. 2 only

7.

Which of the following activities constitute rates on its borrowing by way of IIBs?
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 code given below:

A.

1 and 2 only

B.

2, 3 and 4 only

C.

1,3 and 4 only

D.

1, 2, 3 and 4

ANSWER :

A. 1 and 2 only

8.
Which one of the following situations best reflects "Indirect Transfers" often talked about in media recently with reference to India?
A.
An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment
B.
A foreign company investing in India and paying taxes to the country of it base on the profits arising out of its investment.
C.
An Indian company purchases tangible assets in a foreign country and sells such assets after their value increases and transfers the proceeds to India.
D.
A foreign company transfers shares and such shares derive their substantial value from assets located in India.
ANSWER :
D. A foreign company transfers shares and such shares derive their substantial value from assets located in India.
9.

With reference to the expenditure made by an organization or a company, which of the following statements is/are correct?
1. Acquiring new technology is capital expenditure.
2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.
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

ANSWER :

A. 1 only

10.

With reference to the Indian economy, consider the following statements:
1. A share of the household's financial savings goes towards government borrowings.
2. Dated securities issued at market-related rates in auctions form a large component of internal debt.
Which of the above statements is/are correct?

A.

1 only

B.

2 only

C.

Both 1 and 2

D.

Neither 1 nor 2

ANSWER :

C. Both 1 and 2