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.

M3 is broad money. M3 = M1 + Time deposits with the banking system. M2 = M1 + Savings deposits of post office savings banks. M1 = Currency with...
The Reserve Bank of India (RBI) controls the money supply in India. The RBI has control over the monetary policy of India. It controls the...
The Reserve Bank of India (RBI) manages and prints currency notes in India. The denomination of currency notes that should be circulated in the...
The 4 different types of money as classified by the economists are commercial money, fiduciary money, fiat money, commodity money. Money whose...
The features of the barter system are there is no need for money to exchange commodities, there has to be double coincidence of wants, which...
There is the issue of double coincidence of wants, and common measure of value. Barter system will not work in large economies. Hence the barter...
The invention of money led to the end of the barter system. It was a system which was used before the invention of the money. You can read about...
The most frequently used monetary policy is the Open Market Operations (OMO). The sale and purchase of Government securities for absorption and...
The two kinds of monetary policy are expansionary and contractionary. The monetary policy implemented with the objective of reducing the...
The qualitative tools of monetary policy are Rationing of credit, Consumer Credit Regulation, Guidelines, Margin requirements, Moral Suasion. You...
The main purpose of monetary policy is to achieve economic growth, maintain a healthy inflation rate which will help in maintaining a robust...
Stagflation is a situation where unemployment is very high, economic growth rate is too low, and inflation rate is high. Inflation is the rate at...
Percent inflation rate = (Final CPI Index Value/Initial CPI Value)*100 is the formula used for calculating inflation. You can read about...
Barter is a system where goods are exchanged without the use of money. In large economies, a barter system is not feasible due to the massive...
The advantages of barter system are, the system is simple, there are no complexities involved unlike monetary system, natural resources will not...
One cannot carry forward the wealth in the barter system, an example would be one cannot store surplus rice for long periods of time as rice is a...
Centuries old annual barter trade takes place in Assam. This mela is known as Joon Beel Mela. People from Assam, Arunachal Pradesh and Meghalaya...
On December 1, 2015, Reserve Bank of India (RBI) officially put an end to the barter system of trading along the Indo-Myanmar border. However,...
A system of exchanging goods without using money is known as barter system. The problems associated with the barter system are inability to make...
The 2 main types of inflation are Cost-Push Inflation and Demand-Pull inflation. When there is significant inflation in important services and...