Prelims Daily MCQs - Indian Polity (4 April)

1. Which of the following Acts are administered by the RBI?

  1. Public Debt Act, 1944
  2. Government Securities Act, 2006
  3. Banking Regulation Act, 1949
  4. Foreign Exchange Management Act, 1999

Select the correct answer from the codes given below.

a) 3 and 4 only

b) 1, 3 and 4 only

c) 1, 2 and 3 only

d) 1, 2, 3 and 4

Ans: a

Exp: Acts administered by Reserve Bank of India

  • Reserve Bank of India Act, 1934
  • Public Debt Act, 1944
  • Government Securities Act, 2006
  • Government Securities Regulations, 2007
  • Banking Regulation Act, 1949
  • Foreign Exchange Management Act, 1999
  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Chapter II)
  • Credit Information Companies(Regulation) Act, 2005
  • Payment and Settlement Systems Act, 2007
  • Payment and Settlement Systems Act, 2007 As Amended up to 2019
  • Payment and Settlement Systems Regulations, 2008 As Amended up to 2022
  • Factoring Regulation Act, 2011

2. With reference to real exchange rate, consider the following statements:

  1. It is the relative price of foreign goods in terms of domestic goods.
  2. It has a direct bearing on the amount of export and import transactions done by a country.
  3. It is a measure of a country’s international competitiveness.

Which of the statements given above is/are correct?

a) 2 only

b) 3 only

c) 1 and 3 only

d) 1, 2 and 3

Ans: d


Real exchange rate is the ratio of foreign to domestic prices, measured in the same currency. So the real exchange rate measures prices abroad relative to those at home.

The demand for imports depends on domestic income (Y) and the real exchange rate (R). Higher income leads to higher imports. A higher R makes foreign goods relatively more expensive, thereby leading to a decrease in the quantity of imports. Thus, imports depend positively on Y and negatively on R. The export of one country is, by definition, the import of another. Thus, our exports would constitute foreign imports. It would depend on foreign income, Yf , and on R. A rise in Yf will increase foreign demand for our goods, thus leading to higher exports. An increase in R, which makes domestic goods cheaper, will increase our exports. Exports depend positively on foreign income and the real exchange rate.

Thus, exports and imports depend on domestic income, foreign income and the real exchange rate and the real exchange rate is taken as a measure of a country‘s international competitiveness.

Hence, all statements are correct.

3. Consider following statements regarding India’s economy.

  1. Agricultural exports crossed the $50 bn mark for the first time in 2021-22.
  2. India is the top remittance receiver in the world in 2022 followed by Mexico and China.
  3. India has been the largest recipient of FDI in the world for the last five years.

Choose incorrect statements.

a) 1 and 2 only

b) 3 only

c) 1 only

d) 1, 2 and 3

Ans: b

Exp: As per the DGCI&S data, the country's agricultural products exports had grown by 19.92 percent in the latest FY of 2022 to touch USD 50.21 billion.

Remittance inflow in India in 2022 is expected to top the $100 billion mark for the first time ever. It will continue to retain the top spot in the list of countries with the highest remittance receipts, a report by World Bank said. India will be followed by Mexico with $60 billion in remittance receipts. At $51 billion, China, which occupied the second spot earlier will receive the third-highest remittances this year, the report added.

India jumped one position to 7th among the top recipients of foreign direct investment (FDI) in 2021 despite FDI inflows into the country declining, according to the United Nations Conference on Trade and Development (UNCTAD). Hence, third statement is wrong.

4. MUDRA loans can be taken for

  1. Poultry and Fishing.
  2. Crop cultivation and land improvement.
  3. Small business in manufacturing.

Choose the correct answer.

a) 1 and 2 only

b) 2 and 3 only

c) 1 and 3 only

d) 1, 2 and 3

Ans: c

Exp: MUDRA loans are provided for income generating small business activity in manufacturing, processing, service sector or trading. However, it can’t be issued for corporate or farm related activities like crop cultivation, land improvement etc. However, it can be issued for allied agricultural activities like Poultry, Fishing etc.

5. Which of the following banking institutions provides direct credit to the rural population?

  1. Regional rural bank
  3. Commercial bank
  4. Land development bank

Select the correct answer using the code given below.

a) 1, 3 and 4 only

b) 1. 2 and 4 only

c) 2 and 4 only

d) 1, 2, 3 and 4

Ans: a

Exp: All the above institutions, with the exception of NABARD, engage in direct credit to rural populations. Hence, option (a) is the correct answer.

Commercial banks are the largest lenders to the rural population.

NABARD, in contrast, does not participate in the direct credit system.. It mainly offers loans to RRBs, cooperatives, and state governments for rural development and agricultural growth.

6. In a cricket match, Arjun scores a total of 240 runs only by hitting fours and sixes. If the contribution of sixes in his total score is equal to the contribution of fours, then what is the number of sixes hit by Arjun?

a) 18

b) 20

c) 24

d) 26

Ans: b

Exp: Let number of sixes be X and number of fours be Y. Contribution of sixes = Contribution of fours

6X = 4Y....... (i)

Total score = 6X + 4Y = 240

From (i) we can put 4Y = 6X 6X + 6X = 12 X= 240

Or X = 20

7. In a class, there are 18 boys who are over 160 cm tall. If these boys constitute three-fourth of the total number of boys which is two-third of the total number of students in the class. What is the number of girls in the class?

a) 10

b) 12

c) 14

d) 18

Ans: b

Exp: Let the number of boys be x.

Then, (3/4)x = 18

x = 24

If the total number of students is y, then (2/3) y = 24

y = 36

Number of girls in the class = y – x = 36 – 24 = 12

Cover the entire CSAT syllabus in 70 hours.

Previous Post

Next Post