Economy

CDS 202512 questions

1. Q1

   Which one among the following pairs of type of firm and feature is not correctly matched ?

   • AOligopoly firm : Interdependence in decision-making
   • BMonopolistic firm : Firm is a price setter
   • CMonopoly firm : Produces an efficient level of output
   • DPerfectly competitive firm : Produces socially optimum output
   Show answer & solution

   Correct answer: (C) Monopoly firm : Produces an efficient level of output

   The mismatched pair is C: a monopoly firm does NOT produce an efficient (socially optimum) level of output—it restricts output and charges above marginal cost, creating deadweight loss. The other pairings (oligopoly interdependence, monopolistic price-setting, perfect competition producing the socially optimum) are correct.

2. Q2

   The practice of reducing the size of a product while maintaining its sticker price is called :

   • AShrinkflation
   • BReflation
   • CDisinflation
   • DDeflation
   Show answer & solution

   Correct answer: (A) Shrinkflation

   Reducing a product's size or quantity while keeping the sticker price the same is termed shrinkflation (A). Reflation, disinflation and deflation are macro price-level concepts, not this packaging practice.

3. Q3

   Consider the following statements about innovation and research and development in India : 1. India's rank in Global Innovation Index reported by World Intellectual Property Organization (WIPO) has improved significantly between 2015 and 2024. 2. Funding of research and development is sourced primarily from private sector entities and is sectorally concentrated in pharmaceuticals and information technology. Which of the statements given above is/are correct ?

   • A1 only
   • B2 only
   • CBoth 1 and 2
   • DNeither 1 nor 2
   Show answer & solution

   Correct answer: (A) 1 only

   Only statement 1 is correct (A). India's Global Innovation Index rank did improve markedly between 2015 (about 81st) and 2024 (about 39th). Statement 2 is wrong because R&D funding in India is dominated by the government/public sector rather than private-sector entities.

4. Q4

   Consider the following statements about the Indian Institute of Entrepreneurship (IIE) : 1. The IIE was established in 1999 in Guwahati. 2. The main aim of the institute is to provide training, research and consulting activities for small and micro enterprises. Which of the statements given above is/are correct ?

   • A1 only
   • B2 only
   • CBoth 1 and 2
   • DNeither 1 nor 2
   Show answer & solution

   Correct answer: (B) 2 only

   Only statement 2 is correct (B). The Indian Institute of Entrepreneurship at Guwahati does focus on training, research and consultancy for small and micro enterprises, but it was established in 1993, not 1999, making statement 1 wrong.

5. Q5

   Consider the following statements about Union Government's Expenditure on revenue account and effective capital expenditure : 1. Effective capital expenditure as percentage of GDP has increased from 2020 – 21 to 2023 – 24. 2. Expenditure on revenue account as percentage of GDP has increased from 2020 – 21 to 2023 – 24. Which of the statements given above is/are correct ?

   • A1 only
   • B2 only
   • CBoth 1 and 2
   • DNeither 1 nor 2
   Show answer & solution

   Correct answer: (A) 1 only

   Only statement 1 is correct (A). Effective capital expenditure as a share of GDP rose over 2020-21 to 2023-24 as the government pushed capex-led growth, whereas revenue expenditure as a percentage of GDP declined over the same period (helped by the withdrawal of pandemic-era spending), so statement 2 is wrong.

6. Q6

   Which one among the following statements about the Districts as Export Hubs (DEH) in India is not correct ?

   • ADEH was launched in August 2019.
   • BThe aim of DEH is to boost exports of only selected districts of the country.
   • CIndia's Foreign Trade Policy 2023 reiterated the role of DEH.
   • DDEH aims to promote exports by providing financial inclusion and facilitating logistical and infrastructural support.
   Show answer & solution

   Correct answer: (B) The aim of DEH is to boost exports of only selected districts of the country.

   The incorrect statement is B. The Districts as Export Hubs initiative aims to promote exports from every district by identifying products/services with export potential, not just a few selected districts. The other statements (2019 launch, reiteration in FTP 2023, and support through logistics/infrastructure) are correct.

7. Q7

   Consider the following statements regarding Annual Periodic Labour Force Survey (PLFS) report 2023 – 24 by the National Statistical Organization (NSO) : 1. The agriculture sector remains dominant in employment, with its share rising from about 44 per cent in 2017 – 18 to about 46 per cent in 2023 – 24. 2. The share of female workers in agriculture has increased during the period 2017 – 18 to 2023 – 24. Which of the statements given above is/are correct ?

   • A1 only
   • B2 only
   • CBoth 1 and 2
   • DNeither 1 nor 2
   Show answer & solution

   Correct answer: (C) Both 1 and 2

   Both statements are correct (C). Per the PLFS 2023-24, agriculture's share in employment rose from about 44% (2017-18) to roughly 46% (2023-24), and the share of female workers in agriculture increased over this period, reflecting greater feminisation of the farm workforce.

8. Q8

   Which of the following surveys are being conducted by the Ministry of Statistics and Programme Implementation, Government of India? 1. Survey on Social Consumption – Health 2. Comprehensive Modular Survey – Telecom and ICT skills 3. Periodic Labour Force Survey 4. Annual Survey on Unincorporated Enterprises Select the answer using the code given below:

   • A1, 2, 3 and 4
   • B1, 2 and 3 only
   • C3 and 4 only
   • D1 and 2 only
   Show answer & solution

   Correct answer: (A) 1, 2, 3 and 4

   All four surveys - Survey on Social Consumption (Health), the Comprehensive Modular Survey on Telecom and ICT skills, the Periodic Labour Force Survey (PLFS) and the Annual Survey on Unincorporated Enterprises (ASUSE) - are conducted by the National Statistical Office under the Ministry of Statistics and Programme Implementation, so all are correct (A).

9. Q9

   Which of the following statements is/are correct? 1. The Government of India has discontinued the Pradhan Mantri Fasal Bima Yojana. 2. The Government of India has approved the continuation of Restructured Weather Based Crop Insurance Scheme. Select the answer using the code given below :

   • A1 only
   • B2 only
   • CBoth 1 and 2
   • DNeither 1 nor 2
   Show answer & solution

   Correct answer: (B) 2 only

   The Pradhan Mantri Fasal Bima Yojana has not been discontinued; it continues, so statement 1 is wrong. The Government has approved continuation of the Restructured Weather Based Crop Insurance Scheme, making statement 2 correct (B).

10. Q10

    Match List-I with List-II and select the answer using the code given below the Lists : List-I (Organization) A. European Union B. Asia-Pacific Economic Cooperation (APEC) C. Association of Southeast Asian Nations (ASEAN) D. Free Trade Area of the Americas (FTAA) List-II (Year of Formation) 1. 1994 2. 1967 3. 1989 4. 1993 Code : (a) A-3 B-2 C-1 D-4 (b) A-2 B-3 C-4 D-1 (c) A-4 B-3 C-2 D-1 (d) A-4 B-3 C-1 D-2

    • AA-3 B-2 C-1 D-4
    • BA-2 B-3 C-4 D-1
    • CA-4 B-3 C-2 D-1
    • DA-4 B-3 C-1 D-2
    Show answer & solution

    Correct answer: (C) A-4 B-3 C-2 D-1

    ASEAN was formed in 1967, APEC in 1989, the EU (via the Maastricht Treaty) in 1993, and the FTAA process began with the 1994 Summit of the Americas. Thus EU-4(1993), APEC-3(1989), ASEAN-2(1967), FTAA-1(1994), matching option C.

11. Q11

    Which one of the following is a good statistic to evaluate where an economy stands in the financial cycle?

    • ATax/GDP Ratio
    • BFiscal Deficit/GDP Ratio
    • CHousehold Consumption/GDP Ratio
    • DCredit/GDP Ratio
    Show answer & solution

    Correct answer: (D) Credit/GDP Ratio

    The Credit-to-GDP ratio (and the credit-to-GDP gap) is the standard indicator used to gauge an economy's position in the financial cycle, signalling credit booms or busts. Tax, fiscal-deficit and consumption ratios track fiscal or demand conditions, not the financial cycle, so D is correct.

12. Q12

    Which of the following pairs of initiatives of the Government of India and their objectives is/are correctly matched? 1. Global Capability Centre (GCC) : Reshaping corporate landscape 2. U-WIN Portal : Ease of doing business across states Select the answer using the code given below:

    • A1 only
    • B2 only
    • CBoth 1 and 2
    • DNeither 1 nor 2
    Show answer & solution

    Correct answer: (A) 1 only

    Global Capability Centres are correctly linked to reshaping the corporate landscape by hosting multinationals' strategic operations in India. U-WIN is a digital vaccination/immunization registry portal, not an ease-of-doing-business initiative, so statement 2 is mismatched and only 1 is correct (A).