UPSC Prelims 2020: Daily Practice Test – 5

upsc ias prelims exam 2020 test series

Civil Services Preliminary Exam 2020: Practice Test – 5

1. Consider the following statements regarding Imported Inflation.

  1. When the general price level rises in a country because of the rise in prices of imported commodities, inflation is termed as imported.
  2. The weakening of the domestic currency may lead to imported inflation in the country.

Which of the above statements is/are correct?

 a) 1 only

 b) 2 only

 c) Both

 d) None

Solution: c

2.  Consider the following statements regarding Basel III:

  1. Basel III is a global, voluntary regulatory framework on bank capital adequacy.
  2. It was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007–08.
  3. It is intended to increase bank liquidity and bank leverage.

Which of the above statements is/are correct?

 a) 1, 2

 b) 1, 3

 c) 2, 3

 d) 1, 2, 3

Solution: a

3.  Participatory Notes commonly known as P-Notes are one of the instruments of foreign investment. In this context, consider the following statements:

  1. These are financial instruments used by overseas investors that are not registered with the SEBI to invest in Indian securities.
  2. The investors enjoy the voting rights in relation to shares invested through the P – Notes.

Which of the above statements is/are correct?

 a) 1 only

 b) 2 only

 c) Both

 d) None

Solution: a

4. Consider the following statements about Regional Rural Banks (RRBs):

  1. Regional Rural Banks were set up on the basis of the recommendations of Vijay Kelkar committee.
  2. The larger shareholder of regional rural banks is the Central Government.
  3. RRBs are under the ambit of priority sector lending on par with the commercial banks.

Which of the above statements is/are correct?

 a) 1, 2

 b) 2, 3

 c) 1, 3

 d) 1, 2, 3

Solution: b

5. With reference to World Trade Organization (WTO) affairs, which of the following best describes Special Safeguard Mechanism (SSM)?

 a) Mechanism provided for the developed countries to raise tariffs to deal with cheap goods from the developing nations.

 b) Mechanism to restrict the imports of disease infected agricultural products from other countries.

 c) Mechanism to curb the imports of goods whose manufacturing process has violated International labour norms

 d) A tool that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls.

Solution: d

It is a tool that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls.

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