DAY – 1 (InstaTest-1): Insta 75 Days Revision Plan-2023: Topic – ECONOMY, Subject-wise Test 12, Textbook-wise Test 1 and June 2022 CA (PRELIMS 30 & MAINS 30)

Solution: D

It is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April, 1949, by the United States, Canada, and several Western European nations to provide collective security against the Soviet Union.

A key provision of the treaty, the so-called Article 5, states that if one member of the alliance is attacked in Europe or North America, it is to be considered an attack on all members.

MEMBERS:

Solution: C

The Abraham Accords is a series of joint normalization statements initially between Israel, the United Arab Emirates, and Bahrain.

Mediated by the United States, the initial announcement of August 13, 2020, concerned only Israel and the United Arab Emirates before the announcement of a follow-up agreement between Israel and Bahrain on September 11, 2020. On September 15, 2020, the official signing ceremony for the Abraham Accords was hosted by the United States at the White House.

As part of the dual agreements, both the United Arab Emirates and Bahrain recognized Israel’s sovereignty, enabling the establishment of full diplomatic relations.

Solution: B

Solution: C

Definition of Web 5.0

Considering the scale of improvements introduced by the previous versions of the web, it is important to wonder about the reasons for introducing web 5.0. However, let us start with a clear web 5.0 definition to develop a better impression of what it is capable of. Web 5.0 has been designed as a decentralized web platform that can allow the flexibility and resources for developing decentralized web applications. 

The primary objective of web 5.0 would focus on empowering users to reclaim control and ownership of their data. As of now, the web 5.0 version is still under development. However, some experts have pointed out that web 5.0 would be more of a combination between web 2.0 and web 3.0.

https://101blockchains.com/web-5-0/

Solution: C

India has been surveying and exploring uranium since 1949. According to the UCIL, mining operations at Jaduguda began in 1967, and it is also India’s first uranium mine.

Atomic Minerals Directorate for Exploration and Research is to identify and evaluate uranium resources required for the successful implementation of Atomic Energy program of the country.

After the AMD completes the final exploration of uranium, it hands over information/data to Uranium Corporation of India Limited (UCIL).

In India, UCIL is the only organisation responsible for mining and processing of uranium ore for commercial purposes.

Mines and Minerals (Development and Regulation) Act as well as Mineral Conservation & Development Rules along with Mineral Conservation Rules further guide mining and exploration of uranium.

Solution: D

Ethanol is a clear, colourless liquid with a characteristic pleasant odour and burning taste. It is highly flammable. Ethanol is used to dissolve other chemical substances and mixes readily with water and many organic liquids. Ethanol is considered a volatile organic compound by the National Pollutant Inventory.

Ethanol may cause mutations (genetic changes).

Ethanol is rapidly oxidised by the body to carbon dioxide and water, with no cumulative effect. Concentrations below 1000 parts per million (ppm) usually produce no signs of intoxication.

Entering the body

Ethanol can enter the body by ingestion, inhaling fumes or by absorption through the skin.

https://www.dcceew.gov.au/environment/protection/npi/substances/fact-sheets/ethanol-ethyl-alcohol

Solution: D

Primary characteristics and applications of iron and steel slag

Solution: A

LaMDA (Language Model for Dialogue Applications) is a family of conversational large language models developed by Google. The first generation was announced during the 2021 Google I/O keynote, while the second generation was announced at the following year’s event. In June 2022, LaMDA gained widespread attention when Google engineer Blake Lemoine made claims that the chatbot had become sentient.

Solution: A

The S-400 Triumf – NATO calls it SA-21 Growler — is a modern long-range surface-to-air missile (MLR SAM) system developed by Russia. First used in 2007, the S-400 is an upgrade of the S-300 series of missile systems put in place for the defence of Moscow.

The missile system integrates a multifunction radar, autonomous detection and targeting systems, anti-aircraft missile systems, launchers, and command and control centre.

Important Points

1. It is based on a multifunctional system that can drop missiles at different speeds.
2. It can target aircrafts (up to 5^th generations), cruise and ballistic missiles by supersonic and hypersonic missiles of the system.
3. It can address the incoming targets at a range of 400 kms and a height of 30-40 kms.
4. It can neutralise 36 targets at one time in the range of 400 kms.
5. Its radar detection system has a range of 600kms and can target 100-300 targets.
6. It has 12 launchers equipped with missiles which can be launched within 5 minutes.

Solution: D

The National Institution for Transforming India, also called NITI Aayog, was formed via a resolution of the Union Cabinet on January 1, 2015. NITI Aayog is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs.

While designing strategic and long-term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States.

Functions of NITI Ayog

• To evolve a shared vision of national development priorities sectors and strategies with the active involvement of States in the light of national objectives
• To foster cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis, recognizing that strong States make a strong nation.
• To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government
• To ensure, on areas that are specifically referred to it, that the interests of national security are incorporated in economic strategy and policy
• To pay special attention to the sections of our society that may be at risk of not benefiting adequately from economic progress.
• To design strategic and long-term policy and programme frameworks and initiatives, and monitor their progress and their efficacy. The lessons learnt through monitoring and feedback will be used for making innovative improvements, including necessary mid-course corrections
• To provide advice and encourage partnerships between key stakeholders and national and international like-minded Think tanks, as well as educational and policy research institutions.
• To create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and other partners.
• To offer a platform for resolution of inter-sectoral and inter­ departmental issues in order to accelerate the implementation of the development agenda.
• To maintain a state-of-the-art Resource Centre, be a repository of research on good governance and best practices in sustainable and equitable development as well as help their dissemination to stake-holders
• To actively monitor and evaluate the implementation of programmes and initiatives, including the identification of the needed resources so as to strengthen the probability of success and scope of delivery
• To focus on technology upgradation and capacity building for implementation of programmes and initiatives.
• To undertake other activities as may be necessary in order to further the execution of the national development agenda, and the objectives mentioned above

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 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 don’t get transformed in the production process.
• 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. These goods are called as consumer durables.

Solution: C

Factor Cost, Basic Prices and Market 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 and the total indirect taxes deducting 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 price we have to add product taxes (less product subsidies) to the basic prices.

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

• As per the latest data available on World Development Indicators, World Bank, India is the 5th largest economy in terms of GDP ranking of countries at Current US Dollar in 2021.
• India is third largest economy in PPP (purchasing power parity) terms.

Gross National Product at Market Prices (GNPMP)

• GNPMP is the value of all the final goods and services that are produced by the normal residents of India and is measured at the market prices, in a year.
• GNP refers to all the economic output produced by a nation’s normal residents, whether they are located within the national boundary or abroad.
• Everything is valued at the market prices.

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.

• The GDP price deflator measures the changes in prices for all the goods and services produced in an economy.
• Using the GDP price deflator helps economists compare the levels of real economic activity from one year to another.
• The GDP price deflator is a more comprehensive inflation measure than the Consumer Price Index (CPI) index because it isn’t based on a fixed basket of goods.

Solution: D

GDP of a country cannot be taken as an index of the welfare of the people of that country because

• Distribution of GDP is unequal: If the GDP of the country is rising, the welfare may not rise as a consequence. This is because the rise in GDP may be concentrated in the hands of very few individuals or firms.
• Non-monetary exchanges are not included: Many activities in an economy are not evaluated in monetary terms.
  • For example, the domestic services women perform at home are not paid for.
• Externalities: Externalities refer to the benefits (or harms) a firm or an individual causes to another for which they are not paid (or penalised). Externalities do not have any market in which they can be bought and sold. They are not included while calculating GDP.
  • Ex: refinery may be polluting the nearby river.

Solution: B

In a first of its kind, Uttarakhand will assign a monetary value to its natural resources in the form of Gross Environment Product (GEP). It is along the lines of Gross Domestic Product (GDP). Uttarakhand state is going to become the first state of the country to measure Gross Environment Product (GEP) for quantifying ecological growth measurement. 

Gross Environment Product (GEP) is an assessment system to measure the ecological status of a region and is one of the components of green GDP.  GEP is the measure of ecosystem services of any area.

Ecosystem services represent the benefits humans get: Forests, lakes and grasslands; timber and dyed; carbon sequestration and nutrient cycling; soil formation and productivity; and tourism.

According to the recommendation of 12th and 13th Finance Commissions, grants were transferred to forest rich states in amounts corresponding to their forest covers.

Solution: B

Espousing the spirit of the Gandhian economic thinking, Shriman Narayan Agarwal formulated The Gandhian Plan in 1944. The plan laid more emphasis on agriculture.

The people’s Plan

In 1945, yet another plan was formulated by the radical humanist leader M.N. Roy, Chairman of the Post-War Reconstruction Committee of Indian Trade Union. The plan was based on Marxist socialism and advocated the need of providing the people with the ‘basic necessities of life’.

The Sarvodaya Plan

After the reports of the NPC were published and the government was set to go for the five-year plans, a lone blueprint for the planned development of India was formulated by the famous socialist leader Jayaprakash Narayan—the Sarvodaya Plan published in January 1950.

Solution: D

Eighth Plan (1992 – 97)

The plan undertook drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6% through introduction of fiscal & economic reforms including LPG reforms under the Prime Minister ship of Shri P V Narasimha Rao.

Ninth Plan (1997- 2002)

Theme: Growth with Social Justice & Equality

Ninth Plan aimed to depend predominantly on the private sector – Indian as well as foreign (FDI) & State was envisaged to increasingly play the role of facilitator & increasingly involve itself with social sector viz education, health etc and infrastructure where private sector participation was likely to be limited.

Solution: A

The Central Statistics Office (CSO), in January 2015, released the new and revised data of National Accounts, effecting two changes:

1. The Base Year was revised from 2004–05 to 2011–12. This was done in accordance with the recommendation of the National Statistical Commission (NSC), which had advised to revise the base year of all economic indices every five years.
2. This time, the methodology of calculating the National Accounts has also been revised in line with the requirements of the System of National Accounts (SNA)-2008, an internationally accepted standard.

The major changes incorporated in this revision are as given below:

(i) Headline growth rate will now be measured by GDP at constant market prices, which will henceforth be referred to as ‘GDP’ (as is the practice internationally). Earlier, growth was measured in terms of growth rate in GDP at factor cost and at constant prices.

(ii) Sector-wise estimates of Gross Value Added (GVA) will now be given at basic prices instead of factor cost.

Solution: C

The National Development Council (NDC) or Rashtriya Vikas Parishad is the apex body for decision creating and deliberations on development matters in India, presided over by the Prime Minister. It was set up on 6 August 1952 to strengthen and mobilize the effort and resources of the nation in support of the Five-Year Plans made by Planning Commission, to promote common economic policies in all vital spheres, and to ensure the balanced and rapid development of all parts of the country. The Council comprises the Prime Minister, the Union Cabinet Ministers, Chief Ministers of all States or their substitutes, representatives of the Union Territories and the members of the NITI Aayog (erstwhile Planning Commission).

Solution: C

The Central Sector Schemes are 100 per cent funded by the Union Government with states functioning as implementing agencies. These schemes are mainly formulated on subjects from the Union List.

Under the Centrally Sponsored Schemes (CSSs) a certain percentage of the funding is borne by the Centre and the states in fixed ratios and the implementation is done by the state governments. CSSs are formulated in subjects from the State List to encourage states to priorities in areas that require more attention.

In March 2015, to rationalize the CSSs, a Sub-Group of Chief Ministers was set up. The major features of the restructuring of Centrally Sponsored Schemes (CSSs) are as given below:

(i) The CSSs have been divided into — Core and Optional schemes.

(ii) The new expenditure sharing pattern for the Core Schemes is—for 8 North Eastern (NE) states and 3 Himalayan states 90:10; for other States 60:40 (Centre:States) and for UTs 100 per cent to be borne by the Centre.

(iii) For Optional Schemes the expenditure sharing pattern is—for 8 NE and 3 Himalayan states 80:20; for other states 50:50 (Centre:States) and for the UTs 100 per cent to be borne by the Centre.

(iv) Amongst the Core Schemes, those for social protection and social inclusion should form the Core of the Core and be the first charge on available funds for the National Development Agenda.

Solution: D

Revenue Receipts: Revenue receipts are those receipts that do not lead to a claim on the government. They are therefore termed non-redeemable. They are divided into tax and non-tax revenues.

• Tax revenues, an important component of revenue receipts, have for long been divided into direct taxes (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, 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 organizations are also included. The estimates of revenue receipts take into account the effects of tax proposals made in the Finance Bill.

Solution: C

Capital Expenditure

There are expenditures of the government which result in creation of physical or financial assets or reduction in financial liabilities. This includes expenditure on the acquisition of land, building, machinery, equipment, investment in shares, and loans and advances by the central government to state and union territory governments, PSUs and other parties. Capital expenditure is also categorized as plan and non-plan in the budget documents. Plan capital expenditure, like its revenue counterpart, relates to central plan and central assistance for state and union territory plans. Non-plan capital expenditure covers various general, social and economic services provided by the government.

Solution: C

Fiscal Deficit (FD) is the adverse fiscal balance which is a difference between the Revenue Receipts Plus Non-Debt Capital Receipts (NDCR) i.e., total of the non-debt receipts and the total expenditure. FD is reflective of the total borrowing requirement of Government.

Revenue Deficit (RD) refers to the excess of revenue expenditure over revenue receipts.

The growth of revenue deficit as a percentage of fiscal deficit points to a deterioration in the quality of government expenditure involving lower capital formation.

Effective Revenue Deficit (ERD) is the difference between Revenue Deficit and Grant-in-Aid for Creation of Capital Assets.

Primary Deficit is measured as Fiscal Deficit less interest payments.

Solution: B

Fiscal deficit in India has been decreasing consecutively over the last 3 Financial years.

The largest source of Financial Fiscal deficit is Market borrowings.

Tax revenues forms the largest component of the net receipts of the centre.

Capital expenditure has increased consecutively over the last 5 financial years.

Solution: a)  25% less efficient

Explanation:

4 men’s work for 8 days is equivalent to 12 women’s work for 2 days.

12 women’s work for 2 days is equal to 6 women’s work for 4 days or 3 women’s work for 8 days

4 men’s work for 8 days is equivalent to 3 women’s work for 8 days.

Therefore, 4 men’s work is equal to 3 women’s work.

1 man can do 1/4^th of the work whereas a woman can do 1/3^rd of the work.

Man’s relative efficiency = (1/4)/(1/3) = ¾

Thus, a man is ¼ or 25% less efficient as a woman.

Solution: a) 3

Explanation:

The fraction of the tank that is filled in one minute by pipes M and N is (1/12) and (1/16) respectively.

As per the given data, M is closed early but N is kept open for 12 minutes.

The fraction of the tank that is filled by pipe N alone in 12 minutes = 12 × (1/16) = ¾

Other ¼ of the tank is filled by pipe M alone.

The time for which the pipe M is kept open = (1/4)/(1/12) = 3 minutes.

So, after 3 minutes the pipe M is closed.

Correct Answer: C) 15 DAYS

Explanation:
6m + 8w = 10 days so 60m + 80w = 1 day
8m + 22w = 5 days so 40m + 110w = 1 day
So 60m + 80w = 40m + 110w . It gives 1m = (3/2) w
6m + 8w = 10, so 6*(3/2)w + 8w = 10, so 17 w do 1 work in 10 days, so 34 w thrice work in (17*10*3)/34 = 15 days.

Solution: a) 6 hours 28 minutes

Explanation:

The time taken by the train to complete the journey excluding the time spent in stoppages

= 450km/75 kmph

= 6 hours

Number of stoppages = (450/30) – 1 = 14

Time spent in stoppages = 14 × 2 minutes = 28 minutes

Total time to complete the journey = 6 hours 28 minutes

Ans. B) WTO norms are biased against developing countries

Statement A is wrong as then the rule of trade would break down.  Statement C is wrong as the passage states that India gives subsidies which are far lower than those given by the developed countries. Statement D is wrong as the passage does not talk about the services sector. Hence B is the most accurate answer.