DAY – 1 (InstaTest-1): Insta 75 Days Revision Plan-2022: Topic – ECONOMY, Subject-wise Test 12, Textbook-wise Test 1 and June 2021 CA

Solution: B

1. Vulnerable – IUCN
2. CITES Appendix I species
3. one of the three crocodilians found in India, the others being the gharial and the saltwater crocodile

1. Habitat

• found in freshwater habitats including, rivers, lakes, reservoirs, hill streams, village ponds and man made tanks. It may also be found in coastal saltwater lagoons. This species is a hole-nesting species.
• Range – throughout Indian subcontinent

It is extinct in Myanmar and Bhutan, and possibly extinct in Bangladesh. Vadodara is the only city in India where crocodiles live in their natural habitat amidst human population

Threats

• habitat destruction due to agricultural and industrial expansion
• entanglement and drowning in fishing equipment
• egg predation by humans
• illegal poaching for skin and meat and the use of body parts in medicine
• Crocodiles were often treated as pests to inland fisheries and killed whenever

Solution: C

Asian and African Elephants

• Asian elephants, in general, do not move in mixed groups consisting of males and
  females. Males use smell to track females.

• • Male Asian elephants spent less time in all-male groups as compared to African
    savannah elephants
  • In an African savannah elephant population, young males seemed to prefer old
    males possibly due to opportunities for social learning. Asian elephants: Young
    males spent a greater proportion of time associating with females (in mixed-sex
    groups) than with other males (in all-male groups). For old males, these two
    proportions were similar. While males met at random in the presence of females, the
    behaviour differed in their absence.
  • Asian elephant has been listed as ‘Endangered’ while African elephant has been
    listed as ‘Vulnerable’

• Only Asian Elephants males have tusk while females have rudimentary tuskes
  called tushes. While in African elephants, both the male and female of the African elephants have tusks

Asian Elephants are found in Nepal, India, Bangladesh, Sri Lanka, Myanmar, Laos,
and Thailand while African elephants range across the rainforests of West and
Central Africa, and through the savannas and deserts of Africa.

Solution: D

Bihar’s Valmiki Tiger Reserve (VTR):

• Authorities in Bihar’s Valmiki Tiger Reserve (VTR) have started planning for conservation of vultures after 150 of the birds were sighted recently in the protected area.
• Different species of vultures including Egyptian vulture, Griffon vulture, White-rumped vulture and Himalayan griffon were among the 150 individuals spotted in VTR.
• VTR forms the easternmost limits of the Himalayan Terai forests in India. Situated in the Gangetic Plains bio-geographic zone of the country, the forest has a combination of bhabar and terai tracts.
• Indian flying foxes can be sighted here.

There are nine recorded species of vultures in India — the Oriental white-backed, long-billed, slender-billed, Himalayan, red-headed, Egyptian, bearded, cinereous and the Eurasian Griffon.

Solution: D

The Kaveri (also known as Cauvery, the anglicized name) is an Indian river flowing through the states of Karnataka and Tamil Nadu. In ancient Tamil literature, it was also called Ponni (the golden maid, in reference to the fine silt it deposits). The Kaveri river rises at Talakaveri in the Brahmagiri range in the Western Ghats, Kodagu district of the state of Karnataka, at an elevation of 1,341 m above mean sea level and flows for about 800 km before its outfall into the Bay of Bengal. It reaches the sea in Poompuhar in Mayiladuthurai district. It is the third largest river – after Godavari and Krishna – in southern India and the largest in the State of Tamil Nadu, which, on its course, bisects the state into North and South.

The river enters Tamil Nadu through Dharmapuri district leading to the flat plains where it meanders. It drops into the Hogenakkal Falls just before it arrives in the town of Hogenakkal in Tamil Nadu. The three minor tributaries, Palar, Chinnar and Thoppar enter into the Kaveri on her course, above Stanley Reservoir in Mettur, where the dam has been constructed. It then flows further through the length of Erode district where the river Bhavani, running through the breadth of the district, merges with it. The confluence of the rivers Kaveri, Bhavani and Akash Ganga (mythological) is at the exact place of Bhavani, Tamil Nadu Kooduthurai or Tiriveni Sangamam, Northern part of Erode City.

Solution: C

Cauvery Water Management Authority (CWMA) and Cauvery Water Regulation Committee (CWRC) 2018

Acting on the Supreme Court’s direction, the Centre constituted a Cauvery Water Management Authority (CWMA) on 1 June 2018 to address the dispute over sharing of river water among Tamil Nadu, Karnataka, Kerala and Puducherry.The central government failed to adhere with the top court’s deadline of within six weeks of deliverance of judgement.

On 16 February 2018, the apex court had directed the government to form the CWMA within six weeks in a verdict that marginally increased Karnataka’s share of Cauvery water, reduced the allocation for Tamil Nadu and sought to settle the protracted water dispute between the two states.

On 22 June 2018, despite opposition from Karnataka, the Central government constituted the Cauvery Water Regulation Committee (CWRC) as per the provisions in the Kaveri Management Scheme laid down by the Supreme Court.

Central Water Commission chairman S. Masood Hussain will head the CWMA and chief engineer of the Central Water Commission Navin Kumar will be the first chairman of the CWRC. While the CWMA is an umbrella body, the CWRC will monitor water management on a day-to-day basis, including the water level and inflow and outflow of reservoirs in all the basin states.

Solution: A

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. Hence, statement 2 is incorrect.

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.

Solution: A

Government provides certain goods and services which cannot be provided by the market mechanism i.e. by exchange between individual consumers and producers. Examples of such goods are national defence, roads, government administration etc. which are referred to as public goods. To understand why public goods need to be provided by the government, we must understand the difference between private goods such as clothes, cars, food items etc. and public goods. There are two major differences. One, the benefits of public goods are available to all and are not only restricted to one particular consumer. For example, if a person eats a chocolate or wears a shirt, these will not be available to others. It is said that this person’s consumption stands in rival relationship to the consumption of others. However, if we consider a public park or measures to reduce air pollution, the benefits will be available to all. One person’s consumption of a good does not reduce the amount available for consumption for others and so several people can enjoy the benefits, that is, the consumption of many people is not ‘rivalrous’.

Two, in case of private goods anyone who does not pay for the goods can be excluded from enjoying its benefits. If you do not buy a ticket, you will not be allowed to watch a movie at a local cinema hall. However, in case of public goods, there is no feasible way of excluding anyone from enjoying the benefits of the good. That is why public goods are called non-excludable. Even if some users do not pay, it is difficult and sometimes impossible to collect fees for the public good. These nonpaying users are known as ‘free-riders’. Consumers will not voluntarily pay for what they can get for free and for which there is no exclusive title to the property being enjoyed. The link between the producer and consumer which occurs through the payment process is broken and the government must step in to provide for such goods.

Public goods, as distinct from private goods, are collectively consumed. Two important features of public goods are – they are non-rivalrous in that one person can increase her satisfaction from the good without reducing that obtained by others and they are non-excludable, and there is no feasible way of excluding anyone from enjoying the benefits of the good. These make it difficult to collect fees for their use and private enterprise will in general not provide these goods. Hence, they must be provided by the government.

Solution: C

The Gini coefficient (Gini index or Gini ratio) is a statistical measure of economic inequality in a population. The coefficient measures the dispersion of income or distribution of wealth among the members of a population.

Solution: A

In India, the most highlighted measure of national income has been the GDP at factor cost. The Central Statistics Office (CSO) of the Government of India has been reporting the GDP at factor cost and at market prices. In its revision in January 2015 the CSO replaced GDP at factor cost with the GVA at basic prices, and the GDP at market prices, which is now called only GDP, is now the most highlighted measure.

Here we discuss the concept of basic prices. The distinction between factor cost, basic prices and market prices is based on the distinction between net production taxes (production taxes less production subsidies) and net product taxes (product taxes less product subsidies). Production taxes and subsidies are paid or received in relation to production and are independent of the volume of production such as land revenues, stamp and registration fee. Product taxes and subsidies, on the other hand, are paid or received per unit or product, e.g., excise tax, service tax, export and import duties etc. Factor cost includes only the payment to factors of production, it does not include any tax. 

In order to arrive at the market prices, we have to add to the factor cost the total indirect taxes less total subsidies. The basic prices lie in between: they include the production taxes (less production subsidies) but not product taxes (less product subsidies). Therefore, in order to arrive at market prices we have to add product taxes (less product subsidies) to the basic prices.

As stated above, now the CSO releases GVA at basic prices. Thus, it includes the net production taxes but not net product taxes. In order to arrive at the GDP (at market prices) we need to add net product taxes to GVA at basic prices.

 Thus,

GVA at factor costs + Net production taxes = GVA at basic prices

GVA at basic prices + Net product taxes = GVA at market prices

Solution: D

Gains on sale of land will not be included in the estimation of National Income. As the gains received due to increase in the price of land will not add to the flow of goods and services in the economy.

Solution: A

Brent Index is associated with crude oil prices. Brent Crude is a trading classification of the sweet light crude oil which serves as a major benchmark price for purchasing oil throughout the world.

Solution: A

Price mechanism refers to the system where the forces of demand and supply determine the prices of commodities and the changes therein. It is the buyers and sellers who actually determine the price of a commodity.

Solution: A

Indexation is a system or technique used by organizations or governments to connect prices and asset values. This is done by linking adjustments made to the value of a good, price of a service, or another specified value to a predetermined price or composite index.

Solution: C

The interest rate that the RBI charges when commercial banks borrow money from it is called the repo rate. The interest rate that the RBI pays commercial banks when they park their excess cash with the central bank is called the reverse repo rate.

 It is not the loan contract between a commercial bank and the central bank. The central bank has the power to change it to regulate it according to the situation.

Solution: B

Cash Reserve Ratio refers to the fraction of the total Net Demand and Time Liabilities (NDTL) of a Scheduled Commercial Bank held in India, that it has to maintain as cash deposit with the Reserve Bank of India (RBI). The requirement applies uniformly to all banks in the country irrespective of an individual bank’s financial situation or size. 

As per the RBI Act 1934, all Scheduled Commercial Banks (that includes public and private sector banks, foreign banks, regional rural banks and co-operative banks) are required to maintain a cash balance on average with the RBI on a fortnightly basis to cater to the CRR requirement.

Solution: B

Equity, Productivity, empowerment, and sustainability are considered to be the four pillars of human development. Human Development can be described as a process of enlarging opportunities, improving their well-being, and livelihood.

Solution: B

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 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. 

We may note here that some commodities like television sets, automobiles or home computers, although they are for ultimate consumption, have one characteristic in common with capital goods – they are also durable. That is, they are not extinguished by immediate or even short period consumption; they have a relatively long life as compared to articles such as food or even clothing. They also undergo wear and tear with gradual use and often need repairs and replacements of parts, i.e., like machines they also need to be preserved, maintained and renewed. That is why we call these goods consumer durables.

Solution: D

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.

Notice that 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.

Solution: A

Open Market Operations refers to buying and selling of bonds issued by the Government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the Government. When RBI buys a Government bond in the open market, it pays for it by giving a cheque. This cheque increases the total amount of reserves in the economy and thus increases the money supply. Selling of a bond by RBI (to private individuals or institutions) leads to reduction in quantity of reserves and hence the money supply.

Solution: C

All the above statements are correct.

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.

When the interest rate is very high everyone expects it to fall in future and hence anticipates capital gains from bond-holding. Hence people convert their money into bonds. Thus, speculative demand for money is low. When interest rate comes down, more and more people expect it to rise in the future and anticipate capital loss. Thus they convert their bonds into money giving rise to a high speculative demand for money. Hence speculative demand for money is inversely related to the rate of interest.

Solution: D

All those who have thought Indian one-horned rhinoceros only existed in Jurassic-era, then a trip to Kaziranga is a must for them. One of the most sought after wildlife holiday destinations in India, Kaziranga National park’s 430 square kilometer area sprinkled with elephant-grass meadows, swampy lagoons, and dense forests is home to more than 2200 Indian one-horned rhinoceros, approximately 2/3rd of their total world population. Formed in 1908 on the recommendation of Mary Curzon, the park is located in the edge of the Eastern Himalayan biodiversity hotspots – Golaghat and Nagaon district. In the year 1985, the park was declared as a World Heritage Site by UNESCO. It is said when Mary Curzon, the wife of the Viceroy of India – Lord Curzon of Kedleston, visited the park to see Indian one-horned rhinoceros; she wasn’t able to found even one. Then she persuaded her husband to take urgent measures to protect the dwindling species which he did by initiating planning for their protection. After a series of meetings and documentations, the Kaziranga Proposed Reserve Forest was created with an area of 232 km2 (90 sq mi) in 1905.

Along with the iconic Greater one-horned rhinoceros, the park is the breeding ground of elephants, wild water buffalo, and swamp deer. Over the time, the tiger population has also increased in Kaziranga, and that’s the reason why Kaziranga was declared as Tiger Reserve in 2006. Also, the park is recognized as an Important Bird Area by BirdLife International for the conservation of avifaunal species. Birds like lesser white-fronted goose, ferruginous duck, Baer’s pochard duck and lesser adjutant, greater adjutant, black-necked stork, and Asian Openbill stork specially migrate from the Central Asia during the winter season.

Undoubtedly, the park is known for its good population of animals but more than that its the wildlife conservation initiatives that take place in the park are more popular. With its amazing wildlife conservation activities, the park has successfully managed to grow the population of Greater one-horned rhinoceros, an endangered species.

Kaziranga has become the first in the country to use satellite phones, which are generally used by the law-enforcing agencies. It is declared National park, Tiger reserve and recognized as An Important Bird Area. It is the home of the world’s most one-horned rhinos + Diphlu River flows through this park.

Solution: D

Wadhwana is a small hamlet located about 50 kms. from Vadodara. The route goes from Vadodara through Dabhoi to Wadhwana. It has a huge lake with about 2km radius. There are watchtowers placed at 1 km intervals on the periphery of the lake. Forest dept. has deputed personnel with fairly good knowledge about the local flora & fauna. Surprisingly, they even have a good quality Celestron telescope for the visitors (human) to gaze through.

It is internationally important for its birdlife as it provides wintering ground to migratory waterbirds, including over 80 species that migrate on the Central Asian Flyway.

Solution: B

Disaster Management Act, 2005.

The Act provided for the creation of the National Disaster Management Authority (NDMA) to spearhead and implement a holistic and integrated approach to disaster management in the country. Initially, the NDMA was constituted in 2005 by an Executive Order of the Government of India. Subsequently, the NDMA was notified in 2006 under the provisions of the Act.

The NDMA consists of a chairperson and other members, not exceeding nine. The Prime Minister is the ex-officio chairperson of the NDMA. The other members are nominated by the chairperson of the NDMA. The chairperson of the NDMA designates one of the members as the vice-chairperson of the NDMA. The vice chairperson has the status of a cabinet minister while the other members have the status of a Minister of State.

The NDMA is the apex body for disaster management in the country. It works under the administrative control of the Union Ministry of Home Affairs.

Solution: A

IUCN Red List or Red Data List or Red Book

• The IUCN Red List of Threatened Species, founded in 1964, is the world’s most comprehensive inventory of the global conservation status of biological species.

• When discussing the IUCN Red List, the official term “threatened” is a grouping of three categories: Critically Endangered, Endangered, and Vulnerable.
• The pink pages in this publication include the critically endangered species.
• As the status of the species changes, new pages are sent to the subscribers.
• Green pages are used for those species that were formerly endangered but have now recovered to a point where they are no longer threatened. Hence, statement 3 is incorrect.
• With passing time, the number of pink pages continue to increase.

Species are classified by the IUCN Red List into nine groups

• Extinct (EX) No known individuals remaining.
• Extinct in the wild (EW) Known only to survive in captivity, or as a naturalized population outside its historic range.
• Critically endangered (CR) Extremely high risk of extinction in the wild.
  • reduction in population (greater than 90% over the last 10 years),
  • population size (number less than 50 mature individuals),
  • quantitative analysis showing the probability of extinction in wild in at least 50% in their 10 years, and
  • it is therefore considered to be facing an extremely high risk of extinction in the wild.
• Endangered (EN) High risk of extinction in the wild.
• Vulnerable (VU) High risk of endangerment in the wild.
• Near threatened (NT) Likely to become endangered in the near future.
• Least concern (LC) Lowest risk. Does not qualify for a more at-risk category. Widespread and abundant taxa are included in this category.
• Data deficient (DD) Not enough data to assess its risk of extinction.

Not evaluated (NE) Has not yet been evaluated against the criteria.

Solution: B

Census of Asiatic Lion

Context: Census of Asiatic lion was recently conducted by the Gujarat government and the details have been released.

About the lion census:

The census is conducted once every five years. This year it was delayed due to lockdowns. Hence, statement 1 is incorrect.

The first Lion Census was conducted by the Nawab of Junagadh in 1936; since 1965, the Forest Department has been regularly conducting the Lion Census every five years.

Wildlife under constitution: In 1976, the 42nd amendment incorporated protection of wildlife and forests in the Directive Principles. It also included forests and protection of wild animals in the Concurrent List – Seventh Schedule (Article 246) of the Constitution.

Why we need to relocate the lions to other regions?

Presently, Asiatic lions are confined only to Gujarat. A single epidemic could wipe the entire population and the species might become extinct. Hence, introduction of species to new areas and states might be a good idea.

Solution: C ) 

The passage talks about the fact that we still have not explored much of the life that live in the depth of the ocean and the ocean ecosystem is under huge threat due to climate change. This means that option C is correct because since oceans are getting destroyed, we might not come to know about the life forms we have ended up destroying since we know so little about them.

Solution : D ) 6 hours

It takes 12 hours for a couple of taps to fill a tank upto 80% of its capacity.
Hence, time taken to fill the tank fully = (12/80) × 100 = 15 hours.

So it takes 3 more hours to fill in the tank. However, if one of the tap is closed, it must take double that time, i.e., 6 hours to fill up the tank upto the rim.

Hence, option (d) is correct.

Solution : (B) 90 Km/hr

The speed gets reduced by 20%. Hence, the time taken to reach office will increase by 25%. As the distance is speed*time and is constant, if the speed is decreased the time should increase in the same proportion. (0.8 x 1.25 = 1)
Now, 25% increase in time is equivalent to 10 minutes. Hence, 100% is equivalent to 40 minutes.

Hence, his original speed = Total distance/Original time = 60/40 = 1.5 Km/minute = 90 Km/hr

Hence, option (b) is correct.

Solution: (D) 50%

Let 1st person be x and 2nd person be y.

Then, x’s 1 day’s work = 1/26

Y’s 1 days work = 1/39

x’s share : y’s share = 1/26 : 1/39

= 3/78 : 2/78 = 3 : 2

Difference of ratio = 3 – 2 = 1

Therefore, Required percentage = 1/2×100% = 50%

1st person’s wages is 50% more than the 2nd person’s wages.

Solution : (A) 5km

Let total distance to office = x km, while the uniform Speed = 4 kmph.
Time to cover first 0.7x distance is 30 min or 1/2 hour more than time to cover the rest of the distance,
i.e. 0.3x.
Time = distance / speed
Or 0.7x/4 = 0.3x/4 + ½
Or 0.4x/4= ½
Or x= 5 km

Hence, option (A) is correct.