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. Exchange between virtual digital assets and fiat currencies.

2. Exchange between one or more forms of virtual digital assets.

3. Transfer of virtual digital assets.

4. Safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets.

How many of the above are covered under the Prevention of Money Laundering Act?

(a) Only one

(b) Only two

(c) Only three

(d) All four

Consider the following statements about production of palm oil:

1. India accounts for over 80 per cent of the global palm oil output.

2. The yield of palm oil per hectare of land is higher than any other oil seed worldwide.

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

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

With reference to the “One Nation One Fertilizer” scheme, consider the following statements:

1. The companies are allowed to display their name, brand, logo, and other relevant product information only on one-fourth space of their bags.

2. It will introduce one single brand “Bharat” for all subsidised fertilizers.

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

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

With reference to the Government-Securities (G-sec), consider the following statements:

1. G-secs are instruments that governments use to borrow money.

2. G-secs are the safest investments as the yield is the lowest risk-free interest rate in any economy.

3. The yields of the G-sec remain the same over time.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

With reference to the hybrid vehicles, consider the following statements:

1. Hybrid Electric Vehicle (HEV) uses both the internal combustion (usually petrol) engine and the battery-powered motor powertrain.

2. These vehicles are more efficient compared to Battery Electric Vehicle (BEV).

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

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

FYI:

— The Union Finance Ministry’s move to bring in virtual digital assets under the money laundering law is aimed at widening the taxation and regulatory net and giving teeth to agencies.

— The government issued a notification bringing transactions involving crypto assets under the Prevention of Money Laundering Act.

— It laid out the nature of transactions to be covered under PMLA. These are as follows:

(i) Exchange between virtual digital assets and fiat currencies;

(ii) Exchange between one or more forms of virtual digital assets;

(iii) Transfer of virtual digital assets;

(iv) Safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets;

(v) Participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.

Therefore, option (d) is the correct answer.

FYI:

— Palm oil is the world’s most consumed vegetable oil. It is used as an edible oil in processed foods like chocolate bars, ice cream, instant noodles, and margarine. Cosmetics, soaps, shampoos, and detergents also use palm oil derivatives.

— The yield of palm oil per hectare of land is higher than any other oilseed in the world. Hence, statement 2 is correct.

— Palm oil production also provides employment in rural areas, as currently over one million workers, three million smallholders, and many more households are involved in palm oil production across the world.

— Traditional growers in Indonesia and Malaysia account for more than 80% of the global palm oil output, and are focusing on replacing old oil palm trees that are cumbersome to harvest and less productive, while India and Thailand are trying to expand acreage. Hence, statement 1 is not correct.

Therefore, option (b) is the correct answer.

(Other Source: http://www.wwfindia.org)

FYI:

— The Ministry of Chemicals and Fertilisers has decided to implement One Nation One Fertiliser by introducing a “Single Brand for Fertilisers and Logo” under the fertilizers subsidy scheme named “Pradhanmantri Bhartiya Janurvarak Pariyojna” (PMBJP).

— The single brand name for UREA, DAP, MOP, and NPK would be BHARAT UREA, BHARAT DAP, BHARAT MOP, and BHARAT NPK respectively. Hence, statement 2 is correct.

— Under the new “One Nation One Fertiliser” scheme, companies are allowed to display their name, brand, logo, and other relevant product information only on one-third space of their bags.  Hence, statement 1 is not correct.

— The “Bharat” brand and Pradhanmantri Bharatiya Jan Urvarak Pariyojana logo will have to be shown on the remaining two-thirds space.

Therefore, option (b) is the correct answer.

FYI:

— G-secs, or government securities or government bonds, are instruments that governments use to borrow money. Hence, statement 1 is correct.

— G-secs are different from everyday lending between two private individuals or entities:

(a) G-secs carry the lowest risk of all investments. After all, the chances of the government not paying back your money are almost zero. It is thus the safest investment one can make. Hence, statement 2 is correct.

(b) G-Secs are different in the manner in which they are structured, and how their effective interest rates are calculated.

Calculation of G-sec yields

— G-sec yields change over time, often several times during a single day. This happens because of the manner in which G-secs are structured. Hence, statement 3 is not correct.

— Every G-sec has a face value, coupon payment, and price. The price of the bond may or may not be equal to the face value of the bond.

Example: Suppose the government floats a 10-year G-sec with a face value of Rs 100 and a coupon payment of Rs 5. If one were to buy this single G-sec from the government, it would mean that one would give Rs 100 to the government today and the government would promise to –

(1) Return the sum of Rs 100 at the end of tenure (10 years)

(2) Pay Rs 5 each year until the end of this tenure.

— If G-sec yields (say for a 10-year bond) are going up, it would imply that lenders are demanding even more from private sector firms or individuals; that’s because anyone else is riskier when compared to the government. If G-sec yields start increasing, lending to the government is becoming riskier.

— If a government’s finances are sorted, more and more people want to lend money to such a G-sec. This, in turn, leads to bond prices going up and yields coming down.

Therefore, option (b) is the correct answer.

FYI:

— Hybrids have both an internal combustion engine and an on-board electric motor, with the two systems working in tandem to provide motive power. Hence, statement 1 is correct.

— The different types of electric vehicles available are:

— Battery Electric Vehicle (BEV): Powered entirely by electricity. These are more efficient than hybrids and plug-in hybrids. Hence, statement 2 is not correct.

Hybrid Electric Vehicle

(i) Hybrid Electric Vehicle (HEV): The vehicle has both an internal combustion (often petrol) engine and a battery-powered motor powertrain. When the battery is empty, the petrol engine is used for both driving and charging. These vehicles are less efficient than all-electric or plug-in hybrid automobiles.

(ii) Plug-in Hybrid Electric Vehicle (PHEV): It has both an internal combustion engine and a battery that is charged via an external socket (a plug). This means that the vehicle’s battery can be charged using electricity rather than the engine. PHEVs are more efficient than HEVs, but not as efficient as BEVs.

— Fuel Cell Electric Vehicle (FCEV):Electric energy is produced from chemical energy. For example, a hydrogen FCEV.

Therefore, option (a) is the correct answer.

(Other Source: e-amrit.niti.gov.in)

Daily subject-wise quiz — Polity and Governance (Week 43)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 43)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 43)

Daily subject-wise quiz — Economy (Week 42)

Daily subject-wise quiz – International Relations (Week 42)

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