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The PM SVANidhi scheme was launched during the pandemic to provide affordable working capital loans of up to Rs. 10,000 specifically to ___, who were severely impacted by the lockdowns.
- street vendors
- Refinery Products
- multiplier
- National Income
Answer: street vendors
Street vendors operate entirely in the informal cash economy and rarely possess the collateral required for traditional bank loans. PM SVANidhi (Street Vendor's AtmaNirbhar Nidhi) provided collateral-free, short-term micro-credit with an interest subsidy to help them restart their small businesses and sustain their livelihoods without falling into the debt trap of local moneylenders.
The WTO agreement that prohibits member countries from imposing local content requirements or trade-balancing conditions on foreign investors is known as the ___ Agreement.
- TRIMs (or Trade-Related Investment Measures)
- Laffer
- frictional
- lending (or credit)
Answer: TRIMs (or Trade-Related Investment Measures)
TRIMs ensures that foreign direct investment is not subjected to discriminatory domestic regulations. For example, a host country cannot force a foreign automobile manufacturer to source 50% of its spare parts locally, nor can it restrict the company's imports based on the volume of its exports. This promotes a fair, rules-based environment for global capital flows.
Under the Insolvency and Bankruptcy Code (IBC), 2016, a resolution plan for a defaulting corporate debtor can only be approved by the Committee of Creditors (CoC) if it secures a minimum voting threshold of ___% of the financial debt.
- crowding out
- Production
- 66
- public
Answer: 66
Originally set at 75%, the threshold was lowered to 66% by the government to prevent a single, stubborn minority creditor from blocking viable resolution plans and forcing the liquidation of a company. This supermajority requirement ensures that the collective wisdom of the majority creditors prevails, facilitating faster and more realistic revival of stressed assets.
The 'Misery Index', created by economist Arthur Okun, is a simple macroeconomic indicator calculated by adding the annual rate of ___ to the annual rate of unemployment.
- micro
- inflation
- health and education
- Population
Answer: inflation
The Misery Index is designed to capture the dual economic pain felt by the average citizen. High unemployment causes the distress of lost income and job insecurity, while high inflation erodes the purchasing power of whatever income remains. A rising Misery Index often serves as a potent political indicator of public dissatisfaction with the incumbent government's economic management.
The ___ Club is an informal group of official creditors (primarily wealthy, developed nations) whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries.
- 279A
- Paris
- Kuznets
- increase
Answer: Paris
The Paris Club deals with the restructuring of bilateral sovereign debt owed by developing or distressed nations to other governments. In contrast, the 'London Club' handles debt owed to private commercial banks. When a country faces a sovereign default, it typically negotiates with the Paris Club to secure debt relief, rescheduling, or forgiveness.
Introduced in India in 2005-06, ___ Budgeting shifts the focus from the mere allocation of funds to the actual physical and social outcomes achieved by government ministries and departments.
- product
- Outcome
- collusion
- increase
Answer: Outcome
Outcome Budgeting requires ministries to define measurable deliverables (e.g., 'number of households electrified' rather than just 'rupees spent on cables'). It aims to enforce accountability and improve the efficiency of public spending by linking financial outlays directly to tangible developmental results and performance indicators.
To improve the transmission of monetary policy, the RBI mandated that all new floating-rate retail and MSME loans must be linked to an ___ Benchmark Lending Rate (EBLR), such as the RBI's Repo Rate.
- External
- US Treasury
- collusion
- 16
Answer: External
Historically, banks used internal benchmarks like the Base Rate or MCLR, which they manipulated to delay passing on the benefits of RBI rate cuts to consumers. By mandating an External Benchmark (like the Repo Rate or T-bill yield), the RBI ensured that any change in the central bank's policy rate is automatically and quickly transmitted to the end borrower's EMI.
The ___ effect occurs when massive government borrowing to finance a fiscal deficit drives up interest rates in the money market, thereby reducing or 'crowding out' private sector investment.
- short
- crowding out
- 2003
- six
Answer: crowding out
When the government issues large amounts of bonds to fund its deficit, it competes with private corporations for the same pool of available savings. This increased demand for loanable funds pushes up the equilibrium interest rate, making it too expensive for private firms to borrow for new factories or equipment, ultimately stifling long-term economic growth.
While Giffen goods are inferior goods where the negative income effect outweighs the substitution effect, ___ goods are luxury items where demand increases as price rises because they serve as conspicuous status symbols.
- Veblen
- snob
- indifference
- 2011-12
Answer: Veblen
Named after sociologist Thorstein Veblen, these goods violate the standard law of demand not due to poverty (like Giffen goods), but due to 'conspicuous consumption.' For items like ultra-luxury watches or designer handbags, a higher price actually enhances their snob appeal and exclusivity, driving up demand among the ultra-wealthy.
In international trade agreements, ___ of Origin are the criteria used to determine the national source of a product, which is crucial for deciding whether the product qualifies for preferential tariff treatment under a Free Trade Agreement.
- 1965
- Kuznets
- health and education
- Rules
Answer: Rules
Rules of Origin prevent 'trade deflection,' where a non-member country routes its exports through a low-tariff FTA member country to bypass higher tariffs. These rules typically mandate that a product must undergo a substantial transformation or meet a minimum value-addition threshold (e.g., 35% local content) within the FTA zone to claim duty-free benefits.
The Tendulkar Committee (2009) shifted the methodology for estimating poverty in India away from the traditional calorie-intake norm to a broader consumption basket that included expenditures on ___ and ___.
- banks
- health and education
- gig
- 1998
Answer: health and education
Earlier poverty lines (like the Lakdawala Committee) focused almost exclusively on the cost of acquiring a minimum number of calories. The Tendulkar Committee recognized that modern poverty involves deprivations beyond mere starvation. It adopted a uniform poverty line basket across rural and urban areas that explicitly accounted for the rising costs of essential health and education services.
To unlock capital tied in completed infrastructure projects and attract institutional investors like pension funds, SEBI introduced a new asset class called ___ in 2014, which functions similarly to mutual funds but holds revenue-generating physical assets.
- banks
- IDA
- InvITs (or Infrastructure Investment Trusts)
- Tarapore
Answer: InvITs (or Infrastructure Investment Trusts)
InvITs enable developers to monetize their operational, revenue-generating assets (like toll roads or power grids) by transferring them into a trust. The trust then issues units to investors, distributing the cash flows generated by the assets as dividends. This recycling of capital allows developers to pay off debt and reinvest in new, greenfield infrastructure projects.
The Unified Payments Interface (UPI), which has revolutionized retail digital payments in India by enabling real-time bank-to-bank transfers via mobile, was developed and is operated by the ___.
- Coase
- first
- NAFED
- NPCI (or National Payments Corporation of India)
Answer: NPCI (or National Payments Corporation of India)
NPCI is an umbrella organization for operating retail payments and settlement systems in India, initiated by the RBI and the Indian Banks' Association (IBA). UPI's architecture allows multiple bank accounts to be accessed through a single mobile application, merging the seamless features of wallets with the security and direct settlement of traditional banking networks.
The apex governing body of the NITI Aayog, which includes the Prime Minister and the Chief Ministers of all states and Union Territories with legislatures, is known as the ___.
- Governing Council
- 266 (or 266(3))
- durable (or capital / physical)
- notice
Answer: Governing Council
The Governing Council is the premier body tasked with evolving a shared vision of national priorities and strategies. It embodies the principle of 'cooperative federalism' by providing a direct, high-level platform where state leaders can interact with the Centre as equals, rather than being dictated to by a top-down planning authority.
In the GST regime, Integrated GST (IGST) is levied by the Centre on inter-state supply of goods and services. The revenue collected under IGST is ultimately apportioned based on the ___ principle, ensuring the tax reaches the consuming state.
- seigniorage
- Paper Gold
- government spending (or autonomous expenditure)
- destination
Answer: destination
GST is a destination-based consumption tax. When goods move from State A to State B, the Centre collects IGST. However, since the goods are consumed in State B, the Centre retains its share and transfers the remainder to State B (the destination state), ensuring that manufacturing states do not unfairly hoard the tax revenues generated by consuming states.
When the Parliament is unable to pass the full Union Budget before the start of the new financial year due to elections or time constraints, it grants the executive a temporary authorization to incur expenditure, commonly known as a ___.
- Washington
- indirect
- Vote on Account
- first
Answer: Vote on Account
A Vote on Account is a constitutional provision (Article 116) that allows the government to withdraw funds from the Consolidated Fund of India for a limited period (usually two months) to keep essential administrative and developmental machinery running. It only covers the estimated expenditure side, not the new taxation proposals, which are debated in the full budget later.
The IS-LM model, which illustrates the intersection of the real economy (goods market) and the monetary economy (money market), was developed by John Hicks and Alvin Hansen as a mathematical interpretation of the theories of ___.
- India Debt Resolution Company Ltd (IDRCL)
- lending (or credit)
- Capital
- John Maynard Keynes
Answer: John Maynard Keynes
While Keynes published his revolutionary 'General Theory' in 1936, it was highly conceptual and literary. Hicks and Hansen formalized Keynes's ideas into the IS (Investment-Savings) and LM (Liquidity preference-Money supply) framework, creating the foundational macroeconomic model used to analyze the effects of fiscal and monetary policy on national income and interest rates.
To address the risk of excessive leverage that risk-based capital ratios might miss, Basel III introduced a non-risk-based ___ Ratio, calculated as Tier 1 Capital divided by the bank's total consolidated exposure.
- NPCI (or National Payments Corporation of India)
- Leverage
- multiplier
- National Income
Answer: Leverage
During the 2008 financial crisis, many banks maintained healthy risk-based capital ratios while simultaneously taking on massive, hidden leverage through off-balance-sheet vehicles. The Leverage Ratio acts as a strict backstop, limiting the overall degree to which a bank can multiply its equity through borrowing, regardless of how 'safe' the underlying assets are rated.
The ___ Dilemma describes the inherent paradox where a country issuing the global reserve currency (like the US Dollar) must run persistent current account deficits to supply the world with liquidity, which eventually undermines confidence in that very currency.
- Triffin
- seigniorage
- Total variable cost
- stagflation
Answer: Triffin
Proposed by economist Robert Triffin in the 1960s, this dilemma highlighted the fatal flaw in the Bretton Woods system. To facilitate global trade, the US had to pump dollars into the global economy via deficits, but doing so meant US gold reserves could no longer fully back the outstanding dollars, ultimately leading to the collapse of the gold standard in 1971.
The 'Washington Consensus' refers to a set of ten economic policy prescriptions, including fiscal discipline, trade liberalization, and privatization, that were traditionally promoted for developing countries by Washington-based institutions like the IMF, World Bank, and the ___.
- 75
- two
- Consumer Price Index (CPI)
- US Treasury
Answer: US Treasury
Coined by economist John Williamson in 1989, the Washington Consensus represented the dominant neoliberal paradigm of the late 20th century. It advocated for free markets, deregulation, and minimal state intervention. In recent years, it has faced severe criticism for ignoring institutional realities and social safety nets, leading to a shift toward more nuanced, context-specific development strategies.