UPSC Economic Questions and Answers

UPSC Economic Questions and Answers

The civil services exam is one of the toughest examinations conducted in the country, and economy questions constitute a major of the two written phases of the examination. At BYJU’S we bring to you a compiled list of Economy questions along with answers that are suitable from the prelims and mains perspective.

These answers have been provided by UPSC experts for the candidate’s assistance, without any indirect or ambiguous information. Questions based on sustainable development, GDP, economic growth, taxation, etc. are included in the economy syllabus and the list of questions provided below will focus on the same.

The compiled list of questions given below comes with straightforward and crisp answers, with the IAS mains General Studies-III paper syllabus as the focal point. Aspirants can refer to these questions and answers and familiarize themselves with the depth of important economic topics as per the UPSC Syllabus.

In the USA, the first Operation twist was implemented in 1961 and ended in 1965. The impact on corporate debt was negligible, impact on mortgages...
Depreciation reduces the value of a country’s currency when compared with the currency of other countries. Depreciation discourages imports...
Some of the reasons behind depreciation of rupee against the dollar are rise in crude oil prices, monetary policies of Fed, balance of payments,...
The stress on the balance sheets of the banks due to heavily indebted corporates on one hand, and bad loans or non-performing assets on the other...
The Government used a two-pronged strategy to solve the twin balance sheet problem. They are recapitalisation of banks to increase the...
TBS in banking refers to the twin banking sheet problem.This problem arises due to the existence of non performing assets and corporates having...
The ‘Bad Bank’ will be a 2 tiered structure. In tier-1, there will be an Asset Reconstruction Company (ARC) backed by the Government...
In 1991, the Indian economy was facing an economic crisis due to the balance of payment issue. The Indian Government decided to open up the...
When the currency is devalued, imports get discouraged because imported goods get more expensive for domestic consumers. When the currency is...
India devalued its currency on 6th June, 1966 as independent India faced its first balance of payment crisis. India was dependent on economic aid...
When devaluation of currency is done, the monetary authority formally sets a lower exchange rate of the national currency. Devaluation is...
To avoid frequent rounds of devaluation by nations and retaliatory action of devaluation by competing nations, various international...
Yes, devaluation helps in boosting exports because the goods become relatively cheaper for foreign consumers as the value of domestic currency...
No, the devaluation of currency is not the same as depreciation. Reduction of the value of currency in floating exchange rate is known as...
Richard A. Musgrave is the father of public finance. Raja Chelliah is often referred to as "The Father of Tax Reforms". You can read about the...
The Laffer Curve is “inverted U”. As the tax rate starts from 0% and increases, the Laffer Curve moves in an upward slope till it...
Inverted-U is the typical shape of a Laffer curve. As the tax rate increases beyond the optimal point, which is located at the peak of the Laffer...
The most important implication of laffer curve is that too much increase in tax rates beyond a certain point will be counter productive to the...
The Indian Rupee was devalued in three instances. The Indian rupee was devalued for the first time in 1949, later it was devalued in 1966 and...
India had to go for a devaluation of the Indian rupee because India was facing a massive economic crisis. India had very limited foreign reserves...