UPSC Essentials | Daily subject-wise quiz — Economy (Week 9)

QUESTION 1

With reference to the Minimum Support Price (MSP), consider the following statements:

1. It is announced by Union Government on the recommendations of the Commission for Agricultural Costs and Prices.

2. Pulses are not included in the list of crops for MSP.

3. They are announced at the beginning of the harvesting season.

How many of the above statements are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

QUESTION 2

Consider the following:

1. Integration of Digital System

2. Unified Logistics Interface Platform

3. Ease of Logistics

4. System Improvement Group

How many of the above are features of National Logistic Policy, 2022?

(a) Only one

(b) Only two

(c) Only three

(d) All four

QUESTION 3

Consider the following statements about Non-fungible Tokens (NFTs):

1. It works on blockchain technology and it gives users complete ownership of a digital asset.

2. NFTs can have multiple owners at a time.

Which of the above statement(s) is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

QUESTION 4

With reference to renewable energy in India, consider the following statements:

1. India has a target of achieving 500 GW of Target by 2030.

2. Hydro power generation is the maximum among the renewable energy in India.

Which of the above statement(s) is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

QUESTION 5

With reference to the liquidity of the banking system, consider the following statements:

1. It refers to readily available cash that banks need to meet short-term business and financial needs.

2. The system of liquidity is said to be a deficit if the bank is a net borrower to the Reserve Bank of India (RBI).

Which of the above statement(s) is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

ANSWERS TO MCQs

1. (a)

FYI:

— Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.

— The MSPs are announced by the Union government and as such, it is the government’s decision. But the government largely bases its decision on the recommendations of the Commission for Agricultural Costs and Prices (CACP). Hence, statement 1 is correct.

— The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops. Hence, statement 3 is not correct.

— During each cropping season, the government announces minimum support prices for 23 crops. 

— MSPs provide a floor for market prices, and ensure that farmers receive a certain “minimum” remuneration so that their costs of cultivation (and some profit) can be recovered.

— Crops covered by MSPs include:

(i) 7 types of cereals (paddy, wheat, maize, bajra, jowar, ragi and barley).

(ii) 5 types of pulses (chana, arhar/tur, urad, moong and masur). Hence, statement 2 is not correct.

(iii) 7 oilseeds (rapeseed-mustard, groundnut, soyabean, sunflower, sesamum, safflower, nigerseed).

(iv) 4 commercial crops (cotton, sugarcane, copra, raw jute).

Therefore, option (a) is the correct answer.

Other Source: (vikaspedia.in)

2. (d)

FYI:

— Indian Prime Minister Narendra Modi unveiled the National Logistics Policy and set a goal to trim the country’s logistics costs from as much as 13-14 per cent of its GDP to a single digit over the next few years.

— The policy aims to ensure the seamless movement of goods and services across the country and cut elevated logistics costs, often considered the biggest structural bottleneck for both external and internal trade in India.

— It includes facilities crucial to trade: transport services for the movement of goods, storage facilities that are particularly essential for trade in perishable goods such as food items, fruits, and vegetables, and smooth functioning of government services that facilitate trade such as licensing and customs.

— The new logistics policy has four features:

(i) Integration of Digital System (IDS);

(ii) Unified Logistics Interface Platform (ULIP);

(iii) Ease of Logistics (ELOG); and

(iv) System Improvement Group (SIG).

— Under the IDS, 30 different systems of seven departments are integrated – including data from the road transport, railways, customs, aviation and commerce departments.

— A Unified Logistics Interface Platform ULIP will bring all the digital services related to the transportation sector into a single portal.

— Ease of Logistics Services (E-Logs) has been started for industry associations to resolve issues by reaching out to the government.

Therefore, option (d) is the correct answer.

3. (a)

FYI:

— NFTs are defined as anything which can be converted into digital forms like your drawings, photos, videos, GIFs, music, in-game items, selfies, and even a tweet that can be turned into an NFT, which can then be traded online using cryptocurrency.

—  The unique feature of NFTs is that they are backed by blockchain technology. Terra Nulius was the first NFT on Ethereum Blockchain.

— NFTs are gaining massive popularity now because they are becoming an increasingly popular way to showcase and sell your digital artwork.

— NFT works on blockchain as it gives users complete ownership of a digital asset. Hence, statement 1 is correct.

— An NFT is thus created, or as crypto enthusiasts say it is “minted”, to get exclusive ownership rights. NFTs can have only one owner at a time. Hence, statement 2 is not correct.

Therefore, option (a) is the correct answer.

4. (a)

FYI:

— The government announced a plan to add 250 GW of renewable energy capacity in the next five years to achieve its target of 500 GW of clean energy by 2030. Hence, statement 1 is correct.

— India currently has a total renewable energy capacity of 168.96 GW (as of 28th February 2023) with about 82 GW at various stages of implementation and about 41 GW under tendering stage.

— This includes 64.38 GW of Solar Power, 51.79 GW of Hydro Power, 42.02 GW of Wind Power and 10.77 GW of biopower. Hence, statement 2 is not correct.

— India has emerged as one of the world leaders in Energy Transition and this is evident in the growth that we have achieved in the area of Renewable Energy.

Therefore, option (a) is the correct answer.

5. (c)

FYI:

— Liquidity in the banking system refers to readily available cash that banks need to meet short-term business and financial needs. Hence, statement 1 is correct.

— On a given day, if the banking system is a net borrower from the RBI under Liquidity Adjustment Facility (LAF), the system liquidity can be said to be in deficit and if the banking system is a net lender to the RBI, the system liquidity can be said to be in surplus. Hence, statement 2 is correct.

— The LAF refers to the RBI’s operations through which it injects or absorbs liquidity into or from the banking system.

— The deficit in the liquidity situation has been caused by an uptick in the bank credit, advance tax payments by corporates, the intervention of the RBI into the forex market, and also incremental deposit growth not keeping pace with credit demand.

Therefore, option (c) is the correct answer.

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