UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Each day, we will cover one new subject. Attempt today’s subject quiz on Economy to check your progress. Come back tomorrow to solve the MCQs on International Relations. Don’t miss checking the answers and explanations at the end of the quiz.

Consider the following:

1. Solar PV Modules

2. Medical Devices

3. Telecommunication

4. Drones

How many of the above are covered under production-linked incentive (PLI) schemes?

(a) Only one

(b) Only two

(c) Only three

(d) All four

Which of the following is/are the effect of the depreciation of the rupee?

1. Export of goods and services becomes less competitive.

2. Import of goods and services becomes costlier.

Select the correct answer using the codes given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Carbon Border Adjustment Mechanism (CBAM) is associated with:

(a) African Union

(b) World Trade Organisation

(c) European Union

(d) International Monetary Fund

With reference to the TReDS, consider the following statements:

1. It is an electronic platform for facilitating the financing/discounting of trade receivables of MSMEs.

2. Only Non-Banking Financial Corporations are permitted to participate as financiers in TReDS.

3. MSMEs can participate only as sellers.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Consider the following statements:

1. The WPI-based inflation data is compiled by the Ministry of Statistics and Programme Implementation.

2. CPI is dominated by the prices of manufactured goods.

3. WPI does not take into account the change in the price of services.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) Only three

(d) All four

FYI:

— The government has disbursed Rs 4,415 crore under production-linked incentive (PLI) schemes for eight sectors till October in this fiscal year.

— Incentive amount of around Rs 4,415 crore disbursed under PLI Schemes for eight sectors including Large-Scale Electronics Manufacturing, IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing and Drones and Drone Components.

— The government in 2021 announced PLI schemes for 14 sectors such as telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell battery, drones, and pharma with an outlay of Rs 1.97 lakh crore.

— The plans aim to attract investments in important industries and cutting-edge technology; assure efficiency; bring economies of size and scale to the manufacturing sector; and make Indian enterprises and manufacturers globally competitive.

Therefore, option (d) is the correct answer.

FYI:

— The rupee’s exchange rate vis-à-vis the dollar is essentially the number of rupees one needs to buy $1. Depreciation of the Rupee is defined as the rupee becoming less valuable compared to the United States dollar.

— When the rupee depreciates, importing goods and services becomes costlier. Hence, statement 2 is correct.

— Export of goods and services, especially in the United States, exports become more competitive because depreciation makes these products cheaper for foreign buyers. Hence, statement 1 is not correct.

Therefore, option (b) is the correct answer.

FYI:

— The European Union’s Carbon Border Adjustment Mechanism (CBAM) is the world’s first system that imposes carbon emission tariffs on iron, steel, aluminium and cement, among other such items imported into the 27-nation bloc.

— India’s goods exports to the European Union (EU) have already slowed due to weakening demand in the backdrop of the Russia-Ukraine war. The EU contributes to over 15 per cent of India’s total goods exports.

— Indian manufacturing exports in industries such as steel, oil refining, and cement are extremely competitive with global cost benchmarks, and the concerns raised by Indian exporters are about important trade secrets in these segments being compromised.

Therefore, option (c) is the correct answer.

FYI:

— TReDS is an electronic platform for facilitating the financing/discounting of trade receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers. These receivables can be due from corporates and other buyers, including Government Departments and Public Sector Undertakings (PSUs). Hence, statement 1 is correct.

— Sellers, buyers and financiers are the participants on a TReDS platform.

Seller: Only MSMEs can participate as sellers in TReDS. Hence, statement 3 is correct.

Buyer: Corporates, Government Departments, PSUs and any other entity can participate as buyers in TReDS.

Financiers: Banks, NBFC – Factors and other financial institutions as permitted by the Reserve Bank of India (RBI), can participate as financiers in TReDS. Hence, statement 2 is not correct.

Therefore, option (b) is the correct answer.

(Other Source: rbi.org.in)

FYI:

— The two most-often used inflation rates in the country are the year-on-year

Wholesale price index (WPI) based inflation rate

— The WPI-based inflation data is put together by the Department for Promotion of Industry and Internal Trade (or DPIIT). Hence, statement 1 is not correct.

— The WPI is dominated by the prices of manufactured goods.

Consumer price index (CPI) based inflation rate

— The Ministry of Statistics and Programme Implementation (or MoSPI) compiles the CPI-based inflation data.

— CPI is dominated by the prices of food articles. Hence, statement 2 is not correct.

— These are two different baskets of goods and services. The government assigns different weights to different goods and services based on what is relevant for those two types of consumers.

— A key difference that must not be missed is that the WPI does not take into account the change in prices of services. Hence, statement 3 is correct.

Therefore, option (a) is the correct answer.

Daily subject-wise quiz — Polity and Governance (Week 41)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 41)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 41)

Daily subject-wise quiz — Economy (Week 40)

Daily subject-wise quiz – International Relations (Week 40)

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