Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions
1. Solution: d)
At one level, colonialism simply means the establishment of rule by one country over
another. In the modern period western colonialism has had the greatest impact. Every policy
of the British was geared towards the strengthening and expansion of British capitalism. For
instance it changed the very laws of the land. It changed not just land ownership laws but
decided even what crops ought to be grown and what ought not to be.
It meddled with the manufacturing sector. It altered the way production and distribution of
goods took place. It entered into the forests. It cleared trees and started tea plantations. It
brought in Forest Acts that changed the lives of pastoralists. They were prevented from
entering many forests that had earlier provided valuable forage for their cattle.
Moreover, the Indian police was established to suppress popular revolts via the Indian
Police Act 1861 which is in force even till date.
On the positive front, the British rule also inculcated a spirit of rationality and scientific
temper in the masses by their education, literature etc.
2. Solution: d)
Rihla is written by Ibn Battuta, not Al Biruni.
Al-Biruni was born in 973, in Khwarizm in presentday Uzbekistan. Khwarizm was an
important centre of learning, and Al-Biruni received the best education available at the time.
He was well versed in several languages: Syriac, Arabic, Persian, Hebrew and Sanskrit.
Although he did not know Greek, he was familiar with the works of Plato and other Greek
philosophers, having read them in Arabic translations. In 1017, when Sultan Mahmud
invaded Khwarizm, he took several scholars and poets back to his capital, Ghazni; Al-Biruni
was one of them.
He arrived in Ghazni as a hostage, but gradually developed a liking for the city, where he
spent the rest of his life until his death at the age of 70. It was in Ghazni that Al-Biruni
developed an interest in India. This was not unusual. Sanskrit works on astronomy,
mathematics and medicine had been translated into Arabic from the eighth century
onwards. When the Punjab became a part of the Ghaznavid empire, contacts with the local
population helped create an environment of mutual trust and understanding. Al-Biruni
spent years in the company of Brahmana priests and scholars, learning Sanskrit, and
studying religious and philosophical texts. While his itinerary is not clear, it is likely that he
travelled widely in the Punjab and parts of northern India.
Ibn Battutas book of travels, called Rihla, written in Arabic, provides extremely rich and
interesting details about the social and cultural life in the subcontinent in the fourteenth
century. This Moroccan traveller was born in Tangier into one of the most respectable and
educated families known for their expertise in Islamic religious law or sharia. True to the
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tradition of his family, Ibn Battuta received literary and scholastic education when he was
quite young.
3. Solution: a)
In the short run, another factor that is important in determining exchange rate movements is
the interest rate differential i.e. the difference between interest rates between countries.
There are huge funds owned by banks, multinational corporations and wealthy individuals
which move around the world in search of the highest interest rates. If we assume that
government bonds in country A pay 8 per cent rate of interest whereas equally safe bonds in
country B yield 10 per cent, the interest rate diferential is 2 per cent.
Investors from country A will be attracted by the high interest rates in country B and will
buy the currency of country B selling their own currency. At the same time investors in
country B will also find investing in their own country more attractive and will therefore
demand less of country As currency. This means that the demand curve for country As
currency will shift to the left and the supply curve will shift to the right causing a
depreciation of country As currency and an appreciation of country Bs currency. Thus, a
rise in the interest rates at home often leads to an appreciation of the domestic currency. Here, the
implicit assumption is that no restrictions exist in buying bonds issued by foreign
governments.
4. Solution: d)
A lot of social evils had plagued Indian society. The wellknown issues are that of sati,child
marriage, widow remarriage and caste discrimination. It is not that attempts were not made
to fight social discrimination in pre-colonial India. They were central to Buddhism, to Bhakti
and Sufi movements. Going ahead, what marked the post-colonial 19th century social reform
attempts was the modern context and mix of ideas. It was a creative combination of modern
ideas of western liberalism and a new look on traditional literature.
5. Solution: d)
Within India, social reformers from Punjab and Bengal exchanged ideas with reformers from
Madras and Maharashtra. Keshav Chandra Sen of Bengal visited Madras in 1864. Pandita
Ramabai travelled to different corners of the country. Some of them went to other countries.
Modern social organisations like the Brahmo Samaj in Bengal and Arya Samaj in Punjab were
set up. The All-India Muslim Ladies Conference (Anjuman-E-Khawatn-E-Islam) was founded
in 1914. Indian reformers debated not just in public meetings but through public media like
newspapers and journals. Translations of writings of social reformers from one Indian
language to another took place.
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6. Solution: c)
Both the concepts of participatory democracy and decentralised governance have thus become
popular. Participatory democracy is a system of democracy in which the members of a
group or community participate collectively in the taking of major decisions. Panchayati raj
is a major example where participatory democracy is being practiced. For e.g. in MGNREGA
major project decisions, approvals, social audit etc. are done by the local community. In
other bodies like State LA or DPC, it is an indirect or representative democracy.
7. Solution: a)
Broadly speaking, revenue expenditure consists of all those expenditures of the government
which do not result in creation of physical or financial assets. It relates to those expenses
incurred for the normal functioning of the government departments and various services,
interest payments on debt incurred by the government, and grants given to state
governments and other parties (even though some of the grants may be meant for creation
of assets).
8. Solution: a)
Among the renewable energy sources, onshore wind had the maximum contribution of 51.2
billion kWh, which comprised of one-third of the renewable energy contribution to the
energy mix. Gross electricity contribution of solar photovoltaic increased maximum, by 4.2
billion kWh, contributing 22.4 per cent of the renewable energy mix. Except for hydro
power, contribution from all renewable energy sources increased during 2014. Off-shore
wind has also seen rapid scale-up with energy production increasing by 37 per cent as
compared to 2013. Geo-thermal energy has also contributed to the renewable energy mix but
its share has been only about 0.1 per cent.
http://www.downtoearth.org.in/content/renewable-energy-share-germany-crosses-252014
9. Solution: c)
Muhammad bin Tughlaq
Unlike most other members of his class, Ibn Battuta considered experience gained through
travels to be a more important source of knowledge than books. He just loved travelling,
and went to far-off places, exploring new worlds and peoples. Before he set off for India in
1332-33, he had made pilgrimage trips to Mecca, and had already travelled extensively in
Syria, Iraq, Persia, Yemen, Oman and a few trading ports on the coast of East Africa.
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Travelling overland through Central Asia, Ibn Battuta reached Sind in 1333. He had heard
about Muhammad bin Tughlaq, the Sultan of Delhi, and lured by his reputation as a
generous patron of arts and letters, set off for Delhi, passing through Multan and Uch. The
Sultan was impressed by his scholarship, and appointed him the qazi or judge of Delhi. He
remained in that position for several years, until he fell out of favour and was thrown into
prison. Once the misunderstanding between him and the Sultan was cleared, he was
restored to imperial service, and was ordered in 1342 to proceed to China as the Sultans
envoy to the Mongol ruler.
10. Solution: b)
Since a country interacts with many countries, we may want to see the movement of the
domestic currency relative to all other currencies in a single number rather than by looking
at bilateral rates. That is, we would want an index for the exchange rate against other
currencies, just as we use a price index to show how the prices of goods in general have
changed.
This is calculated as the Nominal Effective Exchange Rate (NEER) which is a multilateral
rate representing the price of a representative basket of foreign currencies, each weighted by
its importance to the domestic country in international trade (the average of export and
import shares is taken as an indicator of this).
The Real Effective Exchange Rate (REER) is calculated as the weighted average of the real
exchange rates of all its trade partners, the weights being the shares of the respective
countries in its foreign trade. It is interpreted as the quantity of domestic goods required to
purchase one unit of a given basket of foreign goods.
11. Solution: c)
Even as India fought for its independence from British colonialism a vision of what Indian
democracy ought to look like emerged. As far back as in 1928, Motilal Nehru and eight other
Congress leaders drafted a constitution for India. In 1931, the resolution at the Karachi
session of the Indian National Congress dwelt on how independent Indias constitution
should look like. The Karachi Resolution reflects a vision of democracy that meant not just
formal holding of elections but a substantive reworking of the Indian social structure in
order to have a genuine democratic society.
The Karachi Resolution clearly spells out the vision of democracy that the nationalist
movement in India had. It articulates the values that were further given full expression in
the Indian Constitution.
Cabinet mission plan was about the post-independent political and territorial reorganization
of India.
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Lucknow pact was the merger of the league and Congress and the acceptance of separate
electorates (which is not at all a core value of the constitution).
12. Solution: a)
When the constitution was being drafted panchayats did not find a mention in it. At this
juncture, a number of members expressed their sorrow, anger and disappointment over this
issue. At the same time, drawing on his own rural experience Dr. Ambedkar argued that
local elites and upper castes were so well entrenched in society that local self-government
only meant a continuing exploitation of the downtrodden masses of Indian society. The
upper castes would no doubt silence this segment of the population further.
The concept of local government was dear to Gandhiji too. He envisaged each village as a
self-sufficient unit conducting its own affairs and saw gram-swarajya to be an ideal model to
be continued after independence.
13. Solution: c)
The budget provides for the capital expenditure of the government.
Since Independence, with the launching of the Five-Year Plans, it has also become a
significant national policy statement. The budget, it has been argued, reflects and shapes,
and is, in turn, shaped by the countrys economic life. Along with the budget, three policy
statements are mandated by the Fiscal Responsibility and Budget Management Act, 2003
(FRBMA). The Medium-term Fiscal Policy Statement sets a three-year rolling target for
specific fiscal indicators and examines whether revenue expenditure can be financed
through revenue receipts on a sustainable basis and how productively capital receipts
including market borrowings are being utilised.
RBI can not regulate governments fiscal policy, nor can any international treaty.
14. Solution: a)
http://en.wikipedia.org/wiki/Panna_National_Park
http://www.downtoearth.org.in/content/public-hearings-ken-betwa-river-link-projectsham-complain-activists
http://indiatoday.intoday.in/story/dam-in-panna-tiger-reserve-a-great-dream-with-somedeceit/1/383926.html
15. Solution: d)
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Once the Portuguese arrived in India in about 1500, a number of them wrote detailed
accounts regarding Indian social customs and religious practices. A few of them, such as the
Jesuit Roberto Nobili, even translated Indian texts into European languages. Among the best
known of the Portuguese writers is Duarte Barbosa, who wrote a detailed account of trade
and society in south India.
Later, after 1600, we find growing numbers of Dutch, English and French travellers coming
to India. One of the most famous was the French jeweller Jean-Baptiste Tavernier, who
travelled to India at least six times. He was particularly fascinated with the trading
conditions in India, and compared India to Iran and the Ottoman empire. Some of these
travellers, like the Italian doctor Manucci, never returned to Europe, and settled down in
India.
Franois Bernier, a Frenchman, was a doctor, political philosopher and historian. Like many
others, he came to the Mughal Empire in search of opportunities. He was in India for twelve
years, from 1656 to 1668, and was closely associated with the Mughal court, as a physician to
Prince Dara Shukoh, the eldest son of Emperor Shah Jahan, and later as an intellectual and
scientist, with Danishmand Khan, an Armenian noble at the Mughal court.
16. Solution: d)
Agricultural land is the single most important resource and form of property in rural
society. But it is not equally distributed among people living in a particular village or region.
Nor does everyone have access to land. In fact, the distribution of landholdings in most
regions is highly unequal among households. In some parts of India the majority of rural
households own at least some land usually very small plots. In other areas as much as 40
to 50 per cent of families do not own any land at all. This means that they are dependent on
agricultural labour or other kinds of work for their livelihoods. This of course means that a
few families are well-to-do. The majority live just above or below the poverty line.
In most regions of India, women are usually excluded from ownership of land, because of
the prevailing patrilineal kinship system and mode of inheritance. By law women are
supposed to have an equal share of family property. In reality they only have limited rights
and some access to land only as part of a household headed by a man.
Access to land largely determines what role one plays in the process of agricultural
production. Medium and large landowners are usually able to earn sufficient or even large
incomes from cultivation (although this depends on agricultural prices, which can fluctuate
greatly, as well as other factors such as the monsoon). But agricultural labourers are more
often than not paid below the statutory minimum wage and earn very little. Their incomes
are low. Their employment is insecure.
Most agricultural labourers are daily-wage workers. And do not have work for many days
of the year. This is known as underemployment. Similarly, tenants (cultivators who lease
their land from landowners) have lower incomes than owner-cultivators. Because they have
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to pay a substantial rent to the landowner often as much as 50 to 75 per cent of the income
from the crop.
17. Solution: a)
That part of our final output that comprises of capital goods constitutes gross investment of
an economy. These may be machines, tools and implements; buildings, office spaces,
storehouses or infrastructure like roads, bridges, airports or jetties. But all the capital goods
produced in a year do not constitute an addition to the capital stock already existing.
A significant part of current output of capital goods goes in maintaining or replacing part of
the existing stock of capital goods. This is because the already existing capital stock suffers
wear and tear and needs maintenance and replacement.
18. Solution: a)
Land ceiling act fixed the amount of land that can be owned by a particular family. The
ceiling varies from region to region, depending on the kind of land, its productivity, and
other such factors.
Very productive land has a low ceiling while unproductive dry land has a higher ceiling
limit. According to these acts, the state is supposed to identify and take possession of
surplus land (above the ceiling limit) held by each household, and redistribute it to landless
families and households in other specified categories, such as SCs and STs. But in most of
the states these acts proved to be toothless. There were many loopholes and other strategies
through which most landowners were able to escape from having their surplus land taken
over by the state.
While some very large estates were broken up, in most cases landowners managed to divide
the land among relatives and others, including servants, in so-called benami transfers
which allowed them to keep control over the land (in fact if not in name). In some places,
some rich farmers actually divorced their wives (but continued to live with them) in order to
avoid the provisions of the Land Ceiling Act, which allowed a separate share for unmarried
women but not for wives.
19. Solution: a)
The basic equation representing the economy is:
I+G+XMS+T
In other words
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(I S) + (G T) M X (2.8)
In the equation, G T measures by what amount the government expenditure exceeds the
tax revenue earned by it. This is referred to as budget deficit. M X is known as the trade
deficit it measures the excess of import expenditure over the export revenue earned by the
economy (M is the outflow from the country, X is the inflow into the country).
If there is no government, no foreign trade then G = T = M = X = 0.
Hence the equation yields I S, which means investments equal to savings.
20. Solution: b)
If Ibn Battuta chose to describe everything that impressed and excited him because of its
novelty, Franois Bernier belonged to a different intellectual tradition. He was far more
preoccupied with comparing and contrasting what he saw in India with the situation in
Europe in general and France in particular, focusing on situations which he considered
depressing. His idea seems to have been to influence policy-makers and the intelligentsia to
ensure that they made what he considered to be the right decisions.
Berniers Travels in the Mughal Empire is marked by detailed observations, critical insights
and reflection. His account contains discussions trying to place the history of the Mughals
within some sort of a universal framework. He constantly compared Mughal India with
contemporary Europe, generally emphasising the superiority of the latter. His
representation of India works on the model of binary opposition, where India is presented
as the inverse of Europe. He also ordered the perceived differences hierarchically, so that
India appeared to be inferior to the Western world.
According to Bernier, one of the fundamental differences between Mughal India and Europe
was the lack of private property in land in the former. He was a firm believer in the virtues
of private property, and saw crown ownership of land as being harmful for both the state
and its people. He thought that in the Mughal Empire the emperor owned all the land and
distributed it among his nobles, and that this had disastrous consequences for the economy
and society.
This perception was not unique to Bernier, but is found in most travellers accounts of the
sixteenth and seventeenth centuries. Owing to crown ownership of land, argued Bernier,
landholders could not pass on their land to their children. So they were averse to any longterm investment in the sustenance and expansion of production. The absence of private
property in land had, therefore, prevented the emergence of the class of improving
landlords (as in Western Europe) with a concern to maintain or improve the land. It had led
to the uniform ruination of agriculture, excessive oppression of the peasantry and a
continuous decline in the living standards of all sections of society, except the ruling
aristocracy.
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21. Solution: a)
The Reserve Deposit Ratio: Banks hold a part of the money people keep in their bank
deposits as reserve money and loan out the rest to various investment projects. Reserve
money consists of two things vault cash in banks and deposits of commercial banks with
RBI. Banks use this reserve to meet the demand for cash by account holders. Reserve deposit
ratio (rdr) is the proportion of the total deposits commercial banks keep as reserves.
Keeping reserves is costly for banks, as, otherwise, they could lend this balance to interest
earning investment projects. However, RBI requires commercial banks to keep reserves in
order to ensure that banks have a safe cushion of assets to draw on when account holders
want to be paid. RBI uses various policy instruments to bring forth a healthy rdr in
commercial banks. The first instrument is the Cash Reserve Ratio which specifies the
fraction of their deposits that banks must keep with RBI. There is another tool called
Statutory Liquidity Ratio which requires the banks to maintain a given fraction of their total
demand and time deposits in the form of specified liquid assets.
Apart from these ratios RBI uses a certain interest rate called the Bank Rate to control the value of
rdr. Commercial banks can borrow money from RBI at the bank rate when they run short of reserves.
A high bank rate makes such borrowing from RBI costly and, in effect, encourages the commercial
banks to maintain a healthy rdr.
22. Solution: a)
Gharials once thrived in all the major river systems of the Indian Subcontinent, spanning the
rivers of its northern part from the Indus River in Pakistan across the Gangetic floodplain to
theIrrawaddy River in Myanmar. Today, they are extinct in the Indus River, in
the Brahmaputra ofBhutan and Bangladesh, and in the Irrawaddy River. Their distribution
is now limited to only 2% of their former range.
In India, small populations are present and increasing in the rivers of the National Chambal
Sanctuary, Katarniaghat Wildlife Sanctuary, Son River Sanctuary and
the rainforest biome ofMahanadi in Satkosia Gorge Sanctuary, Odisha, where they
apparently do not breed.
Gharials do not kill and eat humans. Jewellery found in their stomachs may have been the
reason for the myth that gharials are man-eaters. They may have swallowed this jewellery
as gastroliths used to aid digestion or buoyancy management.
As the population has declined drastically in the past 70 years, the gharial is listed
as Critically Endangered by the IUCN.
http://www.downtoearth.org.in/content/science-technology-bytes-1
23. Solution: d)
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In most of the Green Revolution areas, it was primarily the medium and large farmers who were
able to benefit from the new technology. This was because inputs were expensive, and small and
marginal farmers could not afford to spend as much as large farmers to purchase these
inputs. When agriculturists produce primarily for themselves and are unable to produce for
the market, it is known as subsistence agriculture and they are usually termed peasants.
Agriculturists or farmers are those who are able to produce surplus, over and above the
needs of the family, and so are linked to the market. It was the farmers who were able to produce
a surplus for the market who were able to reap the most benefits from the Green Revolution and
from the commercialisation of agriculture that followed.
24. Solution: d)
The largescale circulation of labour has had several significant effects on rural society, in
both the receiving and the supplying regions. For instance, in poor areas where male family
members spend much of the year working outside of their villages, cultivation has become
primarily a female task. Women are also emerging as the main source of agricultural labour,
leading to the feminisation of agricultural labour force. The insecurity of women is greater
because they earn lower wages than men for similar work. Until recently, women were
hardly visible in official statistics as earners and workers. While women toil on the land as
landless labourers and as cultivators, the prevailing patrilineal kinship system, and other
cultural practices that privilege male rights, largely exclude women from land ownership.
25. Solution: c)
In some regions such as Punjab and Karnataka, farmers enter into contracts with
multinational companies (such as PepsiCo) to grow certain crops (such as tomatoes and
potatoes), which the companies then buy from them for processing or export. In such
contract farming systems, the company identifies the crop to be grown, provides the seeds
and other inputs, as well as the knowhow and often also the working capital.
In return, the farmer is assured of a market because the company guarantees that it will
purchase the produce at a predetermined fixed price. Contract farming is very common now
in the production of specialised items such as cut flowers, fruits such as grapes, figs and
pomegranates, cotton, and oilseeds.
While contract farming appears to provide financial security to farmers, it can also lead to
greater insecurity as farmers become dependent on these companies for their livelihoods.
Contract farming of export-oriented products such as flowers and gherkins also means that
agricultural land is diverted away from food grain production.
Contract farming has sociological significance in that it disengages many people from the
production process and makes their own indigenous knowledge of agriculture irrelevant. In
addition, contract farming caters primarily to the production of elite items, and because it
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usually requires high doses of fertilisers and pesticides, it is often not ecologically
sustainable.
26. Solution: a)
In a system of flexible exchange rates (also known as floating exchange rates), the exchange
rate is determined by the forces of market demand and supply. In a completely flexible
system, the central banks follow a simple set of rules they do nothing to directly affect the
level of the exchange rate, in other words they do not intervene in the foreign exchange
market (and therefore, there are no official reserve transactions).
In a fixed system, the Central bank completely determines the exchange rates.
In a managed system, the Central bank allows the currency to be affected by market forces.
At few times, the Bank intervenes directly in the forex market to buy and sell foreign
currencies in an attempt to moderate exchange rate movements whenever they feel that such
actions are appropriate. Official reserve transactions are, therefore, not equal to zero.
27. Solution: d)
All of these somewhat divergent and even disparate beliefs and practices would come to be
classified as Hindu over the course of the next millennium. The divergence is perhaps most
stark if we compare Vedic and Puranic traditions. The principal deities of the Vedic
pantheon, Agni, Indra and Soma, become marginal figures, rarely visible in textual or visual
representations. And while we can catch a glimpse of Vishnu, Shiva and the goddess in
Vedic mantras, these have little in common with the elaborate Puranic mythologies.
However, in spite of these obvious discrepancies, the Vedas continued to be revered as
authoritative. Not surprisingly, there were sometimes conflicts as well those who valued
the Vedic tradition often condemned practices that went beyond the closely regulated
contact with the divine through the performance of sacrifices or precisely chanted mantras.
On the other hand those engaged in Tantric practices frequently ignored the authority of the
Vedas. Also, devotees often tended to project their chosen deity, either Vishnu or Shiva, as
supreme. Relations with other traditions, such as Buddhism or Jainism, were also often
fraught with tension if not open conflict.
The traditions of devotion or bhakti need to be located within this context. Devotional
worship had a long history of almost a thousand years before the period we are considering.
During this time, expressions of devotion ranged from the routine worship of deities within
temples to ecstatic adoration where devotees attained a trance-like state. The singing and
chanting of devotional compositions was often a part of such modes of worship. This was
particularly true of the Vaishnava and Shaiva sects.
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28. Solution: a)
A major point of difference between developing and developed countries is the number of
people in regular salaried employment. In developed countries, the majority are formally
employed. In India, over 50% of the population is selfemployed, only about 14% are in
regular salaried employment, while approximately 30% are in casual labour (Anant 2005:
239). Economists and others often make a distinction between the organised or formal and
unorganised or informal sector.
29. Solution: d)
After mining has finished in an area, the company is supposed to cover up the open holes
and restore the area to its earlier condition. But they dont do this.
Workers in underground mines face very dangerous conditions, due to flooding, fire, the
collapse of roofs and sides, the emission of gases and ventilation failures. Many workers
develop breathing problems and diseases like tuberculosis and silicosis. Those working in
overground mines have to work in both hot sun and rain, and face injuries due to mine
blasting, falling objects etc. The rate of mining accidents in India is very high compared to
other countries.
30. Solution: d)
Former Prime Minister Atal Bihari Vajpayee and late educationist Madan Mohan Malviya
(posthumously) have been chosen for Bharat Ratna- countrys highest civilian award.
It was announced by the press communique from Rashtrapati Bhavan.
About Madan Mohan Malviya
He was born on December 25, 1861 and was an educationist and politician notable
for his role in Indias freedom struggle. He was popularly known Mahaman.
He is founder of Asias largest residential university Banaras Hindu University.
He was President of Indian National Congress in 1909 and 1918.
He is also remembered for his stellar role in the Independence movement and his
espousal of Hindu nationalism.
He is considered as one of the initial leaders of the right-wing Hindu Mahasabha and
died in 1946.
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31. Solution: d)
Panchayats should be given powers and authority to function as institutions of selfgovernment. It, thus, requires all state governments to revitalise local representative
institutions.
The following powers and responsibility were delegated to the Panchayats:
to prepare plans and schemes for economic development
to promote schemes that will enhance social justice
to levy, collect and appropriate taxes, duties, tolls and fees
help in the devolution of governmental responsibilities, especially that of finances to

local authorities
Social welfare responsibilities of the Panchayats include the maintenance of burning and
burial grounds, recording statistics of births and deaths, establishment of child welfare and
maternity centres, control of cattle etc.
32. Solution: c)
It IS known that nitrite-rich food, such as beetroot, improve blood flow and are good for the
heart. But how this happens was not clear. A study shows that nitrite works as a signal to
haemoglobin, found in red blood cells, to form nitric oxide. This reduces platelet activation
which causes blood clots. Researchers now aim to enhance this ability of haemoglobin to
treat conditions such as hypertension, sickle cell disease and stroke.
http://www.downtoearth.org.in/content/science-technology-bytes-1
33. Solution: d)
Argument A is more about the idea of a welfare state. A liberalised state too can look after
welfare needs of citizens.
Argument C strengthens the case for liberalisation.
Argument D is more complete and clear than Argument B. It is self-explanatory as to why
liberalisation may not be taken in an economy. Hence the answer is D.
34. Solution: d)
Refer to the section THE DIFFERENT DIMENSIONS OF GLOBALISATION in the
chapter 6 of Social Change and Development in India XII NCERT.
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It has been explained comprehensively there. This topic is important for Mains too. So lot of
points can be lifted for use in answers.
35. Solution: d)
This question is in the background of - UN Security Council (UNSC) has rejected a
resolution demanding an end to the Israeli occupation of the Palestinian territories within
three years i.e. 2017.
In this regard, Jordan earlier had submitted the motion in UN after it was agreed and backed
by 22 Arab states and the Palestinian Authority.
Eight members of the 15-strong Security Council voted for it
Russia, China, France, Argentina, Chad, Chile, Jordan and Luxembourg voted in
favour the resolution.
US and Australia voted against it.
UK, Lithuania, Nigeria, the Republic of Korea and Rwanda remained abstained.
This resolution failed to get support of at least nine members in order to pass.
36. Solution: b)
Russia and four ex-Soviet nations have finalized the formation of a new economic allianceEurasian Economic Union (EEU). Four ex-Soviet nations are Belarus, Kazakhstan, Armenia
and Kyrgyzstan.
It was finalized in EEU summit held in Moscow, Russia.
EEU will come into existence on 1 January 2015. It seeks to bolster integration of member
nations which includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan primarily
located in northern Eurasia.
It aims to provide free trade among member countries without any barriers.
In addition, it will co-ordinate the financial systems and regulates industrial and
agricultural policies along with labour markets and transportation networks of
member nations.
EEU will bring together around 170 million people from 5 member nations and will
have a combined economic output of $4.5 trillion.
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37. Solution: c)
At a different level, historians of religion often classify bhakti traditions into two broad
categories: saguna (with attributes) and nirguna (without attributes). The former included
traditions that focused on the worship of specific deities such as Shiva, Vishnu and his
avatars (incarnations) and forms of the goddess or Devi, all often conceptualised in
anthropomorphic forms. Nirguna bhakti on the other hand was worship of an abstract form
of god.
38. Solution: b)
Camouflage NEED not always be visual. Filefish use a cologne they prepare from the corals
they eat to hide from the nose of predators. A study in Australia found that crabs were
unable to smell filefish because they smelled like the corals. Insects are known to use the
technique but this is the first time that a vertebrate has been found to use chemical
camouflage. The find indicates that there could be more species which use it
39. Solution: c)
Government has launched Mission Indradhanush to immunise kids against 7 vaccinepreventable diseases.
Mission Indradhanush depicts 7 colours of the rainbow which aims to cover all those
children by 2020 who are either unvaccinated, or are partially vaccinated against 7 vaccine
preventable diseases.
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7 preventable diseases: diphtheria, whooping cough, tetanus, polio, tuberculosis,

measles and hepatitis B.
40. Solution: d)
This landmark treaty has officially became binding international law, which aims to regulate
around the USD 85 billion global arms trade.
It came into force after 60 nations ratified it, as of December 23 among the 130 signatories of
the treaty. In order to come in force, the treaty in total needed 50 nations ratification.
It is the first legally-binding multilateral agreement that prohibits nations from

exporting conventional weapons to countries that may use it for genocide, crimes
against humanity or war crimes.
It adds a new chapter in collective efforts of nations to bring responsibility,

accountability and transparency to the global arms trade.
It set robust global standards for cross-border transfers of conventional weapons

ranging from small firearms to tanks and attack helicopters.
It creates binding requirements for states to review cross-border contracts to ensure

weapons will not be used in human rights abuses, violations of humanitarian law or
organised crime
41. Solution: d)
Joint production would involve sharing and transfer or money and other resources across
nations.
Transfer of technology would also involve money and transfer of other resources. It is
essentially an external sector transaction of the economy.
Investment in treasury bills or government bonds of a country is a kind of FII. So an external
sector transaction.
42. Solution: a)
What makes countries rich or poor?
These are some of the central questions of economics. It is not that countries which are
endowed with a bounty of natural wealth minerals or forests or the most fertile lands are
naturally the richest countries. In fact the resource rich Africa and Latin America have some
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of the poorest countries in the world, whereas many prosperous countries have scarcely any
natural wealth.
There was a time when possession of natural resources was the most important
consideration but even then the resource had to be transformed through a production
process.
The economic wealth, or well-being, of a country thus does not necessarily depend on the
mere possession of resources; the point is how these resources are used in generating a flow
of production and how, as a consequence, income and wealth are generated from that
process.
43. Solution: a)
Some of the earliest bhakti movements (c. sixth century) were led by the Alvars (literally,
those who are immersed in devotion to Vishnu) and Nayanars (literally, leaders who were
devotees of Shiva). They travelled from place to place singing hymns in Tamil in praise of
their gods.
Some historians suggest that the Alvars and Nayanars initiated a movement of protest
against the caste system and the dominance of Brahmanas or at least attempted to reform
the system. To some extent this is corroborated by the fact that bhaktas hailed from diverse
social backgrounds ranging from Brahmanas to artisans and cultivators and even from
castes considered untouchable.
The importance of the traditions of the Alvars and Nayanars was sometimes indicated by
the claim that their compositions were as important as the Vedas. For instance, one of the
major anthologies of compositions by the Alvars, the Nalayira Divyaprabandham, was
frequently described as the Tamil Veda, thus claiming that the text was as significant as the
four Vedas in Sanskrit that were cherished by the Brahmanas.
44. Solution: a)
Nyaya Panchayats have been constituted in some states. They possess the authority to hear
some petty, civil and criminal cases. They can impose fines but cannot award a sentence.
These village courts have often been successful in bringing about an agreement amongst
contending parties. They have been particularly effective in punishing men who harass
women for dowry and perpetrate violence against them.
45. Solution: a)
Of the final goods, we can distinguish between consumption goods and capital goods.
Goods like food and clothing, and services like recreation that are consumed when
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purchased by their ultimate consumers are called consumption goods or consumer goods.
(This also includes services which are consumed but for convenience we may refer to them
as consumer goods.)
Then there are other goods that are of durable character which are used in the production
process. These are tools, implements and machines. While they make production of other
commodities feasible, they themselves dont get transformed in the production process.
They are also final goods yet they are not final goods to be ultimately consumed. They are
called capital goods.
Of the total production taking place in the economy a large number of products dont end
up in final consumption and are not capital goods either.
Such goods may be used by other producers as material inputs. Examples are steel sheets
used for making automobiles and copper used for making utensils. These are intermediate
goods, mostly used as raw material or inputs for production of other commodities. These are
not final goods.
46. Solution: d)
Several profound transformations in the nature of social relations in rural areas took place in
the post-Independence period, especially in those regions that underwent the Green
Revolution. These included:
an increase in the use of agricultural labour as cultivation became more intensive;
a shift from payment in kind (grain) to payment in cash;
a loosening of traditional bonds or hereditary relationships between farmers or

landowners and agricultural workers (known as bonded labour);
and the rise of a class of free wage labourers.
The change in the nature of the relationship between landlords (who usually belonged to the
dominant castes) and agricultural workers (usually low caste), was described by the
sociologist Jan Breman as a shift from patronage to exploitation.
47. Solution: a)
A part of the capital goods produced this year goes for replacement of existing capital goods
and is not an addition to the stock of capital goods already existing and its value needs to be
subtracted from gross investment for arriving at the measure for net investment. This
deletion, which is made from the value of gross investment in order to accommodate regular
wear and tear of capital, is called depreciation.
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So new addition to capital stock in an economy is measured by net investment or new
capital formation, which is expressed as
Net Investment = Gross investment Depreciation
So higher the depreciation, lower the net investment will be.
Depreciation is thus an annual allowance for wear and tear of a capital good. But it is NOT
related only to the wear and tear of a capital good.
Depreciation does not take into account unexpected or sudden destruction or disuse of
capital as can happen with accidents, natural calamities or other such extraneous
circumstances.
We are making a rather simple assumption here that there is a constant rate of depreciation
based on the original value of the asset. There can be other methods to calculate depreciation
in actual practice.
48. Solution: c)
Present Constitutional provisions for Vidarbha
Article 371 of Constitution says that President may provide governor of Maharashtra with
following special responsibility
Establish separate development boards for regions of Maharashtra like Vidarbha,

Marathwada and rest.
Every year, working reports of these boards will be placed before State Legislative
assembly.
Development expenditure funds must be equitable allocated for these regions.
These areas must be provided with equitable and adequate facilities for technical
education and vocational training. Even adequate employment opportunities in state
services must be provided to these regions.
Key Recommendations of Vijay Kelkar committee
Autonomous status must be granted to Vidarbha-eastern region of Maharashtra, as

people of this region feels neglected.
This region should get autonomous status on the lines of Meghalaya as it was
granted an autonomous status in 1969, when it was a part of Assam, by the 24th
constitutional amendment.
The people of Vidarbha feel that issues of the region are neglected by the Mumbaiheadquartered government.
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Shift the state secretariat (Mantralaya) to Nagpur- states second capital, for the
month i.e. from December 1 to 31 every year as a part of Nagpur pact (whereby
Vidarbha leaders agreed to merger of the region within Maharashtra in 1960)
All the important finance-related portfolios should be allocated to the leaders from
Vidarbha.
Some of the major directorates should be shifted to Aurangabad and Nagpur

districts.
Pending irrigation projects in Vidarbha should be completed on a priority basis.
Financial outlay of state: It should be classified into two categories- divisible and
non-divisible. The divisible outlay will be divided among three regions of Vidarbha,
Marathwada, and Rest of Maharashtra (RoM), excluding Mumbai. 45 per cent
divisible outlay for RoM, 33.24 per cent for Vidarbha and 25.31 per cent for
Marathwada.
49. Solution: c)
While Buddhism and Jainism had been prevalent in this region for several centuries,
drawing support from merchant and artisan communities, these religious traditions received
occasional royal patronage. Interestingly, one of the major themes in Tamil bhakti hymns is
the poets opposition to Buddhism and Jainism. This is particularly marked in the
compositions of the Nayanars. Historians have attempted to explain this hostility by
suggesting that it was due to competition between members of other religious traditions for
royal patronage. What is evident is that the powerful Chola rulers (ninth to thirteenth
centuries) supported Brahmanical and bhakti traditions, making land grants and
constructing temples for Vishnu and Shiva.
50. Solution: d)
There is output of consumer goods and services and output of capital goods. The consumer
goods sustain the consumption of the entire population of the economy. Purchase of
consumer goods depends on the capacity of the people to spend on these goods which, in
turn, depends on their income.
The other part of the final goods, the capital goods, are purchased by business enterprises
either for maintenance or addition to their capital stock so that they can continue to maintain
or expand the flow of their production. In a specific time period, say in a year, the total
production of final goods can thus be either in the form of consumption or investment and
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there is thus a trade-off. If an economy, out of its current production of final goods,
produces more of consumer goods, it is producing less of investment goods and vice-versa.
For the options B and C, If you apply common logic, you can understand that the more
intermediate goods are produced, the more capital and consumer goods can be produced.
For e.g. steel is an intermediate good machine is a capital good and car is a final
consumer good. There need not be a trade off in these pairs.
51. Solution: d)
GNP GDP + Factor income earned by the domestic factors of production employed in the
rest of the world Factor income earned by the factors of production of the rest of the world
employed in the domestic economy
Hence, GNP GDP + Net factor income from abroad
Remittances sent means Indian domestic labour being employed abroad.
Reliance and BMW outlet are domestic and foreign factors of production employed in
abroad and domestic country respectively.
52. Solution: a)
http://www.bbc.com/news/science-environment-30587002
http://en.wikipedia.org/wiki/NuSTAR
53. Solution: d)
NNP GNP Depreciation
It is to be noted that all these variables are evaluated at market prices.
Through the expression given above, we get the value of NNP evaluated at market prices.
But market price includes indirect taxes. When indirect taxes are imposed on goods and
services, their prices go up. Indirect taxes accrue to the government. We have to deduct
them from NNP evaluated at market prices in order to calculate that part of NNP which
actually accrues to the factors of production.
Similarly, there may be subsidies granted by the government on the prices of some
commodities (in India petrol is heavily taxed by the government, whereas cooking gas is
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subsidised). So we need to add subsidies to the NNP evaluated at market prices. The
measure that we obtain by doing so is called Net National Product at factor cost or National
Income.
Thus, NNP at factor cost National Income (NI ) NNP at market prices (Indirect taxes
Subsidies) NNP at market prices Net indirect taxes (Net indirect taxes Indirect taxes
Subsidies) .
54. Solution: a)
If prices change, then there may be difficulties in comparing GDPs. If we measure the GDP
of a country in two consecutive years and see that the figure for GDP of the latter year is
twice that of the previous year, we may conclude that the volume of production of the
country has doubled. But it is possible that only prices of all goods and services have
doubled between the two years whereas the production has remained constant.
Therefore, in order to compare the GDP figures (and other macroeconomic variables) of
different countries or to compare the GDP figures of the same country at different points of
time, we cannot rely on GDPs evaluated at current market prices. For comparison we take
the help of real GDP. Real GDP is calculated in a way such that the goods and services are
evaluated at some constant set of prices (or constant prices). Since these prices remain
fixed, if the Real GDP changes we can be sure that it is the volume of production which is
undergoing changes. Nominal GDP, on the other hand, is simply the value of GDP at the
current prevailing prices.
55. Solution: d)
The ratio of nominal GDP to real GDP gives us an idea of how the prices have moved from
the base year (the year whose prices are being used to calculate the real GDP) to the current
year. In the calculation of real and nominal GDP of the current year, the volume of
production is fixed. Therefore, if these measures differ it is only due to change in the price
level between the base year and the current year. The ratio of nominal to real GDP is a well
known index of prices. This is called GDP Deflator. Thus if GDP stands for nominal GDP
and gdp stands for real GDP then, GDP deflator = GDP/Gdp
There is another way to measure change of prices in an economy which is known as the
Consumer Price Index (CPI). This is the index of prices of a given basket of commodities
which are bought by the representative consumer. CPI is generally expressed in percentage
terms.
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56. Solution: a)
An individual may hold her wealth in the form of landed property, bullion, bonds, money
etc. For simplicity, let us club all forms of assets other than money together into a single
category called bonds. Typically, bonds are papers bearing the promise of a future stream
of monetary returns over a certain period of time. These papers are issued by governments
or firms for borrowing money from the public and they are tradable in the market. This
demand for money is speculative demand for money.
57. Solution: b)
If interest rates increase, more people would want to save in banks; and less people would
hold bonds. This would reduce the demand for bonds and their value. People holdings
bonds would suffer a loss.
For a deposit holder, lower inflation means better returns on deposit. Because inflation
erodes value of interest accrued to the holder.
58. Solution: a)
The value of the currency notes and coins is derived from the guarantee provided by the
issuing authority of these items. Every currency note bears on its face a promise from the
Governor of RBI that if someone produces the note to RBI, or any other commercial bank,
RBI will be responsible for giving the person purchasing power equal to the value printed
on the note. The same is also true of coins. Currency notes and coins are therefore called fiat
money.
They do not have intrinsic value like a gold or silver coin. They are also called legal tenders
as they cannot be refused by any citizen of the country for settlement of any kind of
transaction. Cheques drawn on savings or current accounts, however, can be refused by
anyone as a mode of payment. Hence, demand deposits are not legal tenders.
59. Solution: c)
The twelfth century witnessed the emergence of a new movement in Karnataka, led by a
Brahmana named Basavanna (1106-68) who was initially a Jaina and a minister in the court
of a Chalukya king. His followers were known as Virashaivas (heroes of Shiva) or Lingayats
(wearers of the linga). Lingayats continue to be an important community in the region to
date. They worship Shiva in his manifestation as a linga, and men usually wear a small linga
in a silver case on a loop strung over the left shoulder. Those who are revered include the
jangama or wandering monks.
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Lingayats believe that on death the devotee will be united with Shiva and will not return to
this world. Therefore they do not practise funerary rites such as cremation, prescribed in the
Dharmashastras. Instead, they ceremonially bury their dead. The Lingayats challenged the
idea of caste and the pollution attributed to certain groups by Brahmanas. They also
questioned the theory of rebirth. These won them followers amongst those who were
marginalised within the Brahmanical social order. The Lingayats also encouraged certain
practices disapproved in the Dharmashastras, such as post-puberty marriage and the
remarriage of widows.
60. Solution: d)
Money supply, like money demand, is a stock variable. The total stock of money in
circulation among the public at a particular point of time is called money supply. RBI
publishes figures for four alternative measures of money supply, viz. M1, M2, M3 and M4.
They are defined as follows
M1 = CU + DD
M2 = M1 + Savings deposits with Post Office savings banks
M3 = M1 + Net time deposits of commercial banks
M4 = M3 + Total deposits with Post Office savings organisations (excluding National
Savings Certificates)
where, CU is currency (notes plus coins) held by the public and DD is net demand deposits
held by commercial banks. The word net implies that only deposits of the public held by
the banks are to be included in money supply. The interbank deposits, which a commercial
bank holds in other commercial banks, are not to be regarded as part of money supply.
M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These
gradations are in decreasing order of liquidity. M1 is most liquid and easiest for transactions
whereas M4 is least liquid of all. M3 is the most commonly used measure of money supply.
It is also known as aggregate monetary resources.
61. Solution: b)
The concept will be difficult to explain in limited words here. You can best refer to the
section 3.3.2 Chapter 3 12th Macroeconomics NCERT.
It has been explained with the help of a numerical example there.
62. Solution: c)
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High CRR would mean banks would park more funds with RBI. Hence they can lend less to
the public. This would reduce the overall money supply. It will also lower demand and
tackle short-term inflation.
It has no immediate coorelation with reducing fiscal deficit in the short-run. That is
something best tackled by a prudent fiscal policy.
63. Solution: c)
Open Market Operations: RBI purchases (or sells) government securities to the general
public in a bid to increase (or decrease) the stock of high powered money in the economy.
Suppose RBI purchases Rs 100 worth government securities from the bond market. It will
issue a cheque of Rs 100 on itself to the seller of the bond. The seller will deposit the cheque
in her bank, which, in turn, will credit the sellers account with a balance of Rs 100. The
banks deposits go up by Rs 100 which is a liability to the bank. However, its assets also go
up by Rs 100 by the possession of this cheque, which is a claim on RBI. The bank will deposit
this cheque to RBI which, in turn, will credit the banks account with RBI with Rs 100.
64. Solution: a)
Sterilisation by RBI: RBI often uses its instruments of money creation for stabilising the stock
of money in the economy from external shocks. Suppose due to future growth prospects in
India investors from across the world increase their investments in Indian bonds which
under such circumstances, are likely to yield a high rate of return. They will buy these bonds
with foreign currency. Since one cannot purchase goods in the domestic market with foreign
currency, a person who sells these bonds to foreign investors will exchange her foreign
currency holding into rupee at a commercial bank. The bank, in turn, will submit this
foreign currency to RBI and its deposits with RBI will be credited with equivalent sum of
money.
This increased money supply may not altogether be good for the economys health. If the
volume of goods and services produced in the economy remains unchanged, the extra
money will lead to increase in prices of all commodities RBI often intervenes with its
instruments to prevent such an outcome. In the above example, RBI will undertake an open
market sale of government securities of an amount equal to the amount of foreign exchange
inflow in the economy, thereby keeping the stock of high powered money and total money
supply unchanged. Thus it sterilises the economy against adverse external shocks. This
operation of RBI is known as sterilisation.
65. Solution: d)
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First, certain goods, referred to as public goods (such as national defence, roads,
government administration), as distinct from private goods (like clothes, cars, food items),
cannot be provided through the market mechanism, i.e. by transactions between individual
consumers and producers and must be provided by the government. This is the allocation
function.
Second, through its tax and expenditure policy, the government attempts to bring about a
distribution of income that is considered fair by society. The government affects the
personal disposable income of households by making transfer payments and collecting taxes
and, therefore, can alter the income distribution. This is the distribution function.
Third, the economy tends to be subject to substantial fluctuations and may suffer from
prolonged periods of unemployment or inflation. The overall level of employment and
prices in the economy depends upon the level of aggregate demand which is a function of
the spending decisions of millions of private economic agents apart from the government.
66. Solution: d)
Revenue receipts are divided into tax and non-tax revenues.
Tax revenues consist of the proceeds of taxes and other duties levied by the central
government. Tax revenues, an important component of revenue receipts, comprise of direct
taxes which fall directly on individuals (personal income tax) and firms (corporation tax),
and indirect taxes like excise taxes (duties levied on goods produced within the country),
customs duties (taxes imposed on goods imported into and exported out of India) and
service tax.
Non-tax revenue of the central government mainly consists of interest receipts (on account
of loans by the central government which constitutes the single largest item of non-tax
revenue), dividends and profits on investments made by the government, fees and other
receipts for services rendered by the government. Cash grants-in-aid from foreign countries
and international organisations are also included.
67. Solution: a)
By the eleventh century Sufism evolved into a welldeveloped movement with a body of
literature on Quranic studies and sufi practices. Institutionally, the sufis began to organise
communities around the hospice or khanqah (Persian) controlled by a teaching master
known as shaikh (in Arabic), pir or murshid (in Persian). He enrolled disciples (murids) and
appointed a successor (khalifa). He established rules for spiritual conduct and interaction
between inmates as well as between laypersons and the master.
Sufi silsilas began to crystallise in different parts of the Islamic world around the twelfth
century. The word silsila literally means a chain, signifying a continuous link between
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master and disciple, stretching as an unbroken spiritual genealogy to the Prophet
Muhammad. It was through this channel that spiritual power and blessings were
transmitted to devotees. Special rituals of initiation were developed in which initiates took
an oath of allegiance, wore a patched garment, and shaved their hair
68. PSolution: d)
Budget documents classify total revenue expenditure into plan and non-plan expenditure.
Plan revenue expenditure relates to central Plans (the Five-Year Plans) and central assistance
for State and Union Territory Plans. Non-plan expenditure, the more important component
of revenue expenditure, covers a vast range of general, economic and social services of the
government.
The main items of non-plan expenditure are interest payments, defence services, subsidies,
salaries and pensions.
69. Solution: d)
The main items of capital receipts are loans raised by the government from the public which
are called market borrowings, borrowing by the government from the Reserve Bank and
commercial banks and other financial institutions through the sale of treasury bills, loans
received from foreign governments and international organisations, and recoveries of loans
granted by the central government. Other items include small savings (Post-Office Savings
Accounts, National Savings Certificates, etc), provident funds and net receipts obtained
from the sale of shares in Public Sector Undertakings (PSUs).
70. Solution: a)
The process of liberalisation also involved the taking of loans from international institutions
such as the International Monetary Fund (IMF). These loans are given on certain conditions.
The government makes commitments to pursue certain kind of economic measures that
involve a policy of structural adjustments. These adjustments usually mean cuts in state
expenditure on the social sector such as health, education and social security. There is also a
greater say by international institutions such as the World Trade Organisation (WTO).
71. Solution: d)
Take the following example It depends on the levels of the following
Primary Deficit = 2(a+b+c) + 5 - 1-4 - 2(a) = (2(a+b+c) 1 ) or RD (5-1-4)
Revenue Deficit (RD) = 2 (a+b+c) 1
If (5-1-4) is positive, i.e. if the capital expenditure in a particular year is high, then PD<RD,
else at times PD>RD.
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72. Solution: b)
http://www.downtoearth.org.in/content/india-high-alert-after-massive-oil-spill-threatenssunderbans-ecology
http://en.wikipedia.org/wiki/2014_Sundarbans_oil_spill
73. Solutions: d)
Kabir (c. fourteenth-fifteenth centuries) is perhaps one of the most outstanding examples of
a poet-saint who emerged within this context. Historians have painstakingly tried to
reconstruct his life and times through a study of compositions attributed to him as well as
later hagiographies. Such exercises have proved to be challenging on a number of counts.
Verses ascribed to Kabir have been compiled in three distinct but overlapping traditions.
The Kabir Bijak is preserved by the Kabirpanth (the path or sect of Kabir) in Varanasi and
elsewhere in Uttar Pradesh; the Kabir Granthavali is associated with the Dadupanth in
Rajasthan, and many of his compositions are found in the Adi Granth Sahib (see Section 8.2).
All these manuscript compilations were made long after the death of Kabir. By the
nineteenth century, anthologies of verses attributed to him circulated in print in regions as
far apart as Bengal, Gujarat and Maharashtra
74. Solution: d)
The government directly affects the level of equilibrium income in two specific ways
government purchases of goods and services (G) increase aggregate demand and taxes, and
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transfers affect the relation between income (Y) and disposable income (YD) the income
available for consumption and saving with the households.
A liberal FDI policy will bring more investment and increase the output of the economy.
75. Solution: d)
The options are self-explanatory. Investment abroad will be used to avoid excess spending
in domestic economy that would have caused extra demand. Moreover, returns can be
generated from abroad which will be used to bridge fiscal deficit.
76. Solution: a)
It has been argued that there is a decrease in investment due to a reduction in the amount of
savings available to the private sector. This is because if the government decides to borrow
from private citizens by issuing bonds to finance its deficits, these bonds will compete with
corporate bonds and other financial instruments for the available supply of funds. If some
private savers decide to buy bonds, the funds remaining to be invested in private hands will
be smaller. Thus, some private borrowers will get crowded out of the financial markets as
the government claims an increasing share of the economys total savings.
77. Solution: d)
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78. Solution: d)
This movement marked the first major anti British reaction and its
new political order initiated in 1849 among the people in the Punjab in 1857.
The Namdhari Movement, aftermath of the Kuka Movement was the most important
phase as it aimed at overthrowing the British rule and played important role in
freedom struggle.
It had evoked the strong feelings of self-respect and sacrifice for the countrys
freedom struggle.
This movement actively propagated the principles of boycott and non-co-operation

given by Guru Ram Singh (founded the Namdhari sect) for the Namdharis.
Gurus Non-co-operation Movement actively propagated few things such as boycott

of education institutions of British and laws established by them.
At the time of movement, the Kuka followers were rigid in their clothing and wore
only hand-spun white attire in order not to reveal their identity as large number of
followers were in the police as well as army.
79. Solution: d)
Refer to the section GDP and WELFARE in chapter 2- 12th Macroeconomics NCERT. It has
been explained comprehensively.
80. Solution: c)
In 1565 Rama Raya, the chief minister of Vijayanagara, led the army into battle at RakshasiTangadi (also known as Talikota), where his forces were routed by the combined armies of
Bijapur, Ahmadnagar and Golconda. The victorious armies sacked the city of Vijayanagara.
The city was totally abandoned within a few years. Now the focus of the empire shifted to
the east where the Aravidu dynasty ruled from Penukonda and later from Chandragiri (near
Tirupati).
Although the armies of the Sultans were responsible for the destruction of the city of
Vijayanagara, relations between the Sultans and the rayas were not always or inevitably
hostile, in spite of religious differences. Krishnadeva Raya, for example, supported some
claimants to power in the Sultanates and took pride in the title establisher of the Yavana
kingdom. Similarly, the Sultan of Bijapur intervened to resolve succession disputes in
Vijayanagara following the death of Krishnadeva Raya. In fact the Vijayanagara kings were
keen to ensure the stability of the Sultanates and vice versa. It was the adventurous policy of
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Rama Raya who tried to play off one Sultan against another that led the Sultans to combine
together and decisively defeat him.
81. Solution: d)
Rajasthan Governor has approved the Rajasthan Panchayati Raj (Second Amendment)
Ordinance-2014 after it was notified by the state government.
This ordinance will amend the Rajasthan Panchayati Raj Act 1994.
Key Provisions of Ordinance
Contestant for Zila Parishad or Panchayat Samiti elections should have the
minimum qualification of secondary education i.e. Class 10 from the state board or
any approved institution or board.
Contestant for the Sarpanch elections, must have passed Class VIII from any school
in case of general category. In case of the scheduled area of panchayat, the contestant
should have passed Class 5 from a school to become a Sarpanch.
82. Solution: d)
These sub-schemes and their allocations are:i. Bringing Green Revolution to Eastern Region: - This programme was initiated in
2010-11 targeting the improvement in the rice based cropping system of Assam, West
Bengal, Orissa, Bihar, Jharkhand, Eastern Uttar Pradesh and Chhattisgarh. Allocation for
this scheme in 2010-11 & 2011-12 was Rs. 400 crore each, which has been enhanced to Rs.
1000.00 crore in 2012-13 & 2013-14. The allocation for the year 2014-15 is Rs.1000.00 crore.
ii. Initiative on Vegetable Clusters: - Growing demand for vegetables was proposed to
be met by a robust increase in the productivity and market linkage. For the purpose, an
efficient supply chain needed to be established, to provide quality vegetables at competitive
prices. The allocation for this sub-scheme was Rs.300.00 crore each in 2011-12 & 2012-13. The
allocation for the year 2013-14 was Rs. 200.00 crore and 2014-15 is Rs. 175.00 crore.
iii. National Mission for Protein Supplements: - National Mission for Protein
Supplements was launched with an allocation of Rs.300 crore during 2011-12 to take up
activities to promote animal based protein production through livestock development, dairy
farming, piggery, goat rearing and fisheries in selected blocks. During 2012-13 & 2013-14 an
amount of Rs. 500 crore & Rs. 400.00 crore were allocated for 2014-15, Rs. 300.00 crore has
been earmarked for this scheme.
iv. Saffron Mission: - The Scheme was initiated in 2010-11 with an overall Government of
India budgetary support of Rs.288.06 crore over four years. Allocation has been Rs. 39.44
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crore in 2010-11, Rs.50.00 crore each in 2011-12 & 2012-13. The mission was meant to bring
economic revival of J&K Saffron. Outlay for the year 2013-14 was Rs. 100.00 crore. An
amount of Rs.100.00 crore is earmarked for 2014-15.
v. Vidharbha Intensive Irrigation Development Programme: - The Scheme was initiated
in 2012-13 which seeks to bring in more farming areas under protective irrigation. The
allocation for the year 2012-13 & 2013-14 was Rs. 300.00 crore each. For 2014-15 Rs. 150.00
crore has been allocated for VIIDP.
vi. Crop Diversification: - The original Green Revolution States have the problem of
stagnating yields and over-exploitation of water resources. The answer lies in crop
diversification. An amount of Rs.500.00 Crore was allocated for 2013-2014 to the start a
programme of crop diversification that would promote technological innovation and
encourage farmers to choose crop alternatives. For 2014-15 Rs. 250.00 crore has been
allocated for this scheme.
From PIB features.
83. Solution: a)
The current account records exports and imports in goods and services and transfer
payments. Trade in services denoted as invisible trade (because they are not seen to cross
national borders) includes both factor income (payment for inputs-investment income, that
is, the interest, profits and dividends on our assets abroad minus the income foreigners earn
on assets they own in India) and non-factor income (shipping, banking, insurance, tourism,
software services, etc.). Transfer payments are receipts which the residents of a country
receive for free, without having to make any present or future payments in return. They
consist of remittances, gifts and grants. They could be official or private.
84. Solution: b)
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85. Solution: d)
High CAD results in currency devaluation directly. Currency devaluation can directly feed
into inflation.
Thus a high CAD fuels directly into the domestic economy. Along with fiscal deficit (which
combinedly is called twin deficits), it leads to high inflation in the economy.
An overall consequence is that FII and other investors will not find the domestic market
worthy enough to invest and pull off from it.
86. Solution: a)
For e.g. If one wants to plan a trip to London, she needs to know how expensive British
goods are relative to goods at home.
The measure that captures this is the real exchange rate the ratio of foreign to domestic
prices, measured in the same currency. It is defined as
Real exchange rate = ePf/P
where P and Pf are the price levels here and abroad, respectively, and e is the rupee price of
foreign exchange (the nominal exchange rate). The numerator expresses prices abroad
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measured in rupees, the denominator gives the domestic price level measured in rupees, so
the real exchange rate measures prices abroad relative to those at home. If the real exchange
rate is equal to one, currencies are at purchasing power parity.
87. Solution: c)
Most of the tea gardens were situated in Assam. In 1903, the industry employed 4,79,000
permanent and 93,000 temporary employees. Since Assam was sparsely populated and the
tea plantations were often located on uninhabited hillsides, bulk of the sorely needed labour
had to be imported from other provinces. But to bring thousands of people every year from
their far-off homes into strange lands, possessing an unhealthy climate and infected with
strange fevers, required the provision of financial and other incentives, which the teaplanters of Assam were unwilling to offer. Instead, they had recourse to fraud and coercion;
and they persuaded the government to aid and abet them in this unholy task by passing
penal laws.
88. Solution: a)
The consumer can be concerned about future generations because they are the children and
grandchildren of the present generation and the family which is the relevant decision
making unit, continues living. They would increase savings now, which will fully offset the
increased government dissaving so that national savings do not change. This view is called
Ricardian equivalence after one of the greatest nineteenth century economists, David
Ricardo, who first argued that in the face of high deficits, people save more.
It is called equivalence because it argues that taxation and borrowing are equivalent means
of financing expenditure. When the government increases spending by borrowing today,
which will be repaid by taxes in the future, it will have the same impact on the economy as
an increase in government expenditure that is financed by a tax increase today.
It has often been argued that debt does not matter because we owe it to ourselves. This is
because although there is a transfer of resources between generations, purchasing power
remains within the nation. However, any debt that is owed to foreigners involves a burden
since we have to send goods abroad corresponding to the interest payments.
89. Solution: a)
eighteenth-century records tell us of zamindars in Bengal who remunerated blacksmiths,
carpenters, even goldsmiths for their work by paying them a small daily allowance and
diet money. This later came to be described as the jajmani system, though the term was not
in vogue in the sixteenth and seventeenth centuries.
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http://en.wikipedia.org/wiki/Jajmani_system
90. Solution: c)
If Indians travel abroad more often, the reverse will happen. The demand for foreign
currency will increase at the expense of Indian currency. So there will be depreciation, not
appreciation.
If more investment or export occurs, then domestic currency will appreciate. Because it will
bridge the CAD, and even make it positive at times.
91. Solution: c)
Change in Prices: Consider the effects of changes in prices, assuming the exchange rate to be
fixed. If prices of domestic products fall, while say foreign prices remain constant, domestic
exports will rise, adding to aggregate demand, and hence will raise our output and income.
Analogously, a rise in prices of a countrys exports will decrease that countrys net exports
and output and income. Similarly, a price increase abroad will make foreign products more
expensive and hence again raise net exports and domestic output and income. Price
decreases abroad have the opposite effects.
Exchange Rate Changes: Changes in nominal exchange rates would change the real
exchange rate and hence international relative prices. A depreciation of the rupee will raise
the cost of buying foreign goods and make domestic goods less costly. This will raise net
exports and therefore increase aggregate demand. Conversely, a currency appreciation
would reduce net exports and, therefore, decrease aggregate demand. However, we must
note that international trade patterns take time to respond to changes in exchange rates. A
considerable period of time may elapse before any improvement in net exports is apparent.
92. Solution: b)
Unlike Britain where the impact of industrialisation led to more people moving into urban
areas, in India the initial impact of the same British industrialisation led to more people
moving into agriculture. The Census of India Report shows this clearly.
The extensive importation of cheap European piece goods and utensils, and the
establishment in India itself of numerous factories of the Western type, have more or less
destroyed many village industries. The high prices of agricultural produce have also led
many village artisans to abandon their hereditary craft in favour of agriculture .
People started buying and wearing imported or domestically manufactured western wears.
This led to the decline of traditional cottage based cotton enterprises.
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93. Solution: d)
The spate of farmers suicides that has been occurring in the different parts of the country
since 1997-98 can be linked to the agrarian distress caused by structural changes in
agriculture and changes in economic and agricultural policies. These include: the changed
pattern of landholdings; changing cropping patterns especially due to the shift to cash crops;
liberalisation policies that have exposed Indian agriculture to the forces of globalisation;
heavy dependence on high-cost inputs; the withdrawal of the state from agricultural
extension activities to be replaced by multinational seed and fertiliser companies; decline in
state support for agriculture; and individualisation of agricultural operations. According to
official statistics, there have been 8,900 suicides by farmers between 2001 and 2006 in
Andhra Pradesh, Karnataka, Kerala and Maharashtra.
94. Solution: d)
The Defence Ministry has identified 4 strategic rail lines along the Indo-China border.
Four strategic rail lines are
Arunachal Pradesh: 378 kilometre long Missamari Tenga -Tawang and 227 kilometre
long Pasighat -Tezu -Rupai railway projects.
Jammu and Kashmir: 498 kilometre long Bilaspur- Manali Leh. It also includes some
part of Himachal Pradesh.
Assam: 249-kilometre long North Lakhimpur-Along-Silapathar.
However, Defence ministry has not identified any strategic railway line along Pakistan
border.
After the approval of Defence Ministry, Railway Ministry will carry out the final location
survey at a cost of Rs 345 crore.
The time of completion and cost of these projects will be finalized after detailed geotechnical studies and final sanction.
95. Solution: d)
The Emperor Akbar classified the lands and fixed a different revenue to be paid by each.
Polaj is land which is annually cultivated for each crop in succession and is never allowed to
lie fallow. Parauti is land left out of cultivation for a time that it may recover its strength.
Chachar is land that has lain fallow for three or four years. Banjar is land uncultivated for
five years and more. Of the first two kinds of land, there are three classes, good, middling,
and bad. They add together the produce of each sort, and the third of this represents the
medium produce, one-third part of which is exacted as the Royal dues.
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96. Solution: a)
Non-tax revenue of the central government mainly consists of interest receipts (on account
of loans by the central government which constitutes the single largest item of non-tax
revenue), dividends and profits on investments made by the government, fees and other
receipts for services rendered by the government. Cash grants-in-aid from foreign countries
and international organisations are also included.
97. Solution: c)
While dollars are the reserve currency of the global financial system, Forex reserves contain
other currencies too like Yen, Euro, Pound etc. SDRs are also used to settle trade related
payments.
98. Solution: a)
The MINERAL that makes 38 per cent of Earth has finally been named-bridgmanite. For
around 50 years, the mineral, a form of magnesium iron silicate found 660 km inside Earth,
could not be studied or named because it did not survive the trip to the surface and its
properties remained unknown. However, meteorites that fall on Earth have the same
element in "frozen" form. X-ray analysis of Tenham, a meteorite that crashed in Australia in
1879 and had bridgmanite grains, revealed that mineral contains high amounts of ferric iron
and sodium
http://en.wikipedia.org/wiki/Silicate_perovskite
99. Solution: d)
http://www.bbc.com/news/health-30641833
100.
Solution: c)
http://www.downtoearth.org.in/content/so-we-can-breathe-easy
Atmospheric particulate matter also known as particulate matter (PM) or particulates is
microscopic solid or liquid matter suspended in the Earth's atmosphere. The term aerosol
commonly refers to the particulate/air mixture, as opposed to the particulate matter
alone.[3] Sources of particulate matter can be man-made or natural. They have impacts on
climate and precipitation that adversely affect human health. Subtypes of atmospheric
particle matter include suspended particulate matter (SPM), respirable suspended particle
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(RSP; particles with diameter of 10 micrometres or less), fine particles (diameter of 2.5
micrometres or less), ultrafine particles, and soot.
The IARC and WHO designate airborne particulates a Group 1 carcinogen. Particulates are
the deadliest form of air pollution due to their ability to penetrate deep into the lungs and
blood streams unfiltered, causing permanent DNA mutations, heart attacks, and premature
death.[4] In 2013, a study involving 312,944 people in nine European countries revealed that
there was no safe level of particulates and that for every increase of 10 g/m3 in PM10, the
lung cancer rate rose 22%. The smaller PM2.5 were particularly deadly, with a 36% increase
in lung cancer per 10 g/m3 as it can penetrate deeper into the lungs
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Insights Mock Tests 2015 Test 11 Solutions

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Insights Mock Tests 2015 Test 11 Solutions

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He is founder of Asias largest residential university Banaras Hindu University.

He was President of Indian National Congress in 1909 and 1918.

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to prepare plans and schemes for economic development

to promote schemes that will enhance social justice

to levy, collect and appropriate taxes, duties, tolls and fees

help in the devolution of governmental responsibilities, especially that of finances to

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US and Australia voted against it.

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Insights Mock Tests 2015 Test 11 Solutions

7 preventable diseases: diphtheria, whooping cough, tetanus, polio, tuberculosis,

It is the first legally-binding multilateral agreement that prohibits nations from

It adds a new chapter in collective efforts of nations to bring responsibility,

It set robust global standards for cross-border transfers of conventional weapons

It creates binding requirements for states to review cross-border contracts to ensure

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

an increase in the use of agricultural labour as cultivation became more intensive;

a shift from payment in kind (grain) to payment in cash;

a loosening of traditional bonds or hereditary relationships between farmers or

and the rise of a class of free wage labourers.

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Establish separate development boards for regions of Maharashtra like Vidarbha,

Development expenditure funds must be equitable allocated for these regions.

Key Recommendations of Vijay Kelkar committee

Autonomous status must be granted to Vidarbha-eastern region of Maharashtra, as

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Some of the major directorates should be shifted to Aurangabad and Nagpur

Pending irrigation projects in Vidarbha should be completed on a priority basis.

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Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

This movement actively propagated the principles of boycott and non-co-operation

Gurus Non-co-operation Movement actively propagated few things such as boycott

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Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

Assam: 249-kilometre long North Lakhimpur-Along-Silapathar.

Insights Mock Tests 2015 Test 11 Solutions

Insights Mock Tests 2015 Test 11 Solutions

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