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.

Human capital is extremely important for the development of the society, economy and the nation. Human capital is needed to produce more human...
India gave importance to the growth of human capital in the seventh five year plan. In a country like India, which has a very large population,...
Professors, doctors, engineers are the 3 examples of human capital.You can read about the Human Capital Index - Key Areas of Measurement,...
Health is a very important source for human capital formation. A healthy person will always be more productive and contribute to the nation than...
Investments in Education and Health are the two sources of human capital. Investments in education will lead to better qualifications, which will...
Capital formation means creation of more capital goods like heavy machineries, factories, infrastructure, production of more electricity etc. You...
Capital Adequacy Ratio (CAR) is the ratio of a bank's capital in relation to its risk weighted assets and current liabilities. You can read about...
The minimum capital adequacy ratio for banks as per Basel III norms is 8%. The CAR or the CRAR is computed by dividing the capital of the bank...
High capital adequacy ratio is good because it indicates that the bank is in a better position to deal with unexpected losses due to availability...
From a regulators perspective, it is the core measurement of a banks’ financial strength. Retained earnings and shareholders' equity is...
Banks need required reserves, and one of the important components of these required reserves is tier 2 capital. Tier 2 capital is considered to...
Tertiary capital is the tier 3 capital. This capital is held on to by many banks to support their risks derived from trading activities, foreign...
Capital adequacy ratio is measured by dividing a bank's capital by its risk-weighted assets. It is the ratio of a bank’s capital to its...
The opportunity cost to produce additional goods will increase as the production of one good is increased as per law of increasing opportunity...
For example, choosing public transportation to travel to a particular destination by foregoing the option of traveling in one's own car is a good...
Bills of exchange, bank drafts, postal orders, and cheques are examples of non-legal tender money. These types of money are usually accepted but...
Yes, paper is a legal tender. It is a medium of exchange for services and goods in an economy. Bank notes are paper money. You can read about the...
No, a shop cannot refuse a legal tender. Legally it should be accepted. Hence it is known as legal tender. However, there is no obligation to...
Banknotes and coins are two types of legal tender money in India. Every banknote issued by Reserve Bank of India (₹2, ₹5, ₹10, ₹20, ₹50, ₹100,...
When the legal tender can be accepted without any limit, then it is known as unlimited legal tender, when the legal tender is accepted with a...