Introducing QUED – Questions from Editorials (UPSC Editorials Quiz) , an innovative initiative from InsightsIAS. Considering the significant number of questions in previous UPSC Prelims from editorials, practicing MCQs from this perspective can provide an extra edge. While we cover important editorials separately in our Editorial Section and SECURE Initiative, adding QUED (UPSC Editorials Quiz) to your daily MCQ practice alongside Static Quiz, Current Affairs Quiz, and InstaDART can be crucial for better performance. We recommend utilizing this initiative to enhance your preparation, with 5 MCQs posted daily at 11 am from Monday to Saturday on our website under the QUIZ menu.
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Question 1 of 5
1. Question
Consider the following statements regarding the implications of low inflation for the Reserve Bank of India (RBI):
1. A sustained fall in headline inflation below the target range allows the RBI to adopt a more accommodative monetary policy.
2. Low inflation automatically ensures higher real interest rates in the economy.
3. A fall in inflation expectations can reduce borrowing costs and stimulate investment demand.How many of the above statements are correct?
Correct
Solution: B
Statement 1 – Correct:
A sustained fall in headline inflation (Consumer Price Index, CPI) below the RBI’s target range of 4 ± 2 percent provides space for the central bank to follow a more accommodative stance. When inflation risks are subdued, the RBI can lower policy rates (repo rate) or maintain liquidity to encourage borrowing and investment without jeopardising price stability. This is consistent with the inflation-targeting mandate under the RBI Act (amended 2016).Statement 2 – Incorrect:
Low inflation does not automatically ensure higher real interest rates. Real interest rate = Nominal interest rate – Inflation rate.- If the RBI simultaneously cuts nominal rates in response to low inflation, the real rate may remain unchanged or even fall.
- Real rates depend on both nominal policy settings and inflation expectations, not on inflation alone.
Statement 3 – Correct:
When inflation expectations decline, lenders demand lower nominal returns and borrowers face reduced borrowing costs. Lower expected inflation stabilises prices and enhances the real value of savings, thereby stimulating investment and consumption demand. This relationship is central to monetary-policy transmission: stable inflation expectations reduce uncertainty and encourage longer-term investments.Incorrect
Solution: B
Statement 1 – Correct:
A sustained fall in headline inflation (Consumer Price Index, CPI) below the RBI’s target range of 4 ± 2 percent provides space for the central bank to follow a more accommodative stance. When inflation risks are subdued, the RBI can lower policy rates (repo rate) or maintain liquidity to encourage borrowing and investment without jeopardising price stability. This is consistent with the inflation-targeting mandate under the RBI Act (amended 2016).Statement 2 – Incorrect:
Low inflation does not automatically ensure higher real interest rates. Real interest rate = Nominal interest rate – Inflation rate.- If the RBI simultaneously cuts nominal rates in response to low inflation, the real rate may remain unchanged or even fall.
- Real rates depend on both nominal policy settings and inflation expectations, not on inflation alone.
Statement 3 – Correct:
When inflation expectations decline, lenders demand lower nominal returns and borrowers face reduced borrowing costs. Lower expected inflation stabilises prices and enhances the real value of savings, thereby stimulating investment and consumption demand. This relationship is central to monetary-policy transmission: stable inflation expectations reduce uncertainty and encourage longer-term investments. -
Question 2 of 5
2. Question
- With reference to ‘Constitutional Morality’, consider the following statements:
- It mandates that all state authority, including legislative and executive, must operate within constitutional boundaries.
- It views public dissent and political debate as potential threats to democratic stability and institutional dignity.
- It requires public officials to follow established conventions that preserve the independence and dignity of public institutions.
How many of the above statements are correct?
Correct
Solution: B
- Statement 1 is correct. It directly refers to the principle of Adherence to Rule of Law, which is a fundamental feature. It means all authority must be exercised within the legal and constitutional framework, preventing arbitrary action.
- Statement 2 is incorrect. Constitutional morality promotes rather than discourages dissent. It mandates Respect for Dissent, viewing tolerance and debate as essential democratic virtues, not as threats. It is the suppression of dissent, not dissent itself, that violates this principle.
Statement 3 is correct. This refers to the feature of Institutional Propriety. It obligates public officials to uphold conventions and procedures that ensure the dignity, independence, and proper functioning of public institutions, independent of personal or political gain.
Incorrect
Solution: B
- Statement 1 is correct. It directly refers to the principle of Adherence to Rule of Law, which is a fundamental feature. It means all authority must be exercised within the legal and constitutional framework, preventing arbitrary action.
- Statement 2 is incorrect. Constitutional morality promotes rather than discourages dissent. It mandates Respect for Dissent, viewing tolerance and debate as essential democratic virtues, not as threats. It is the suppression of dissent, not dissent itself, that violates this principle.
Statement 3 is correct. This refers to the feature of Institutional Propriety. It obligates public officials to uphold conventions and procedures that ensure the dignity, independence, and proper functioning of public institutions, independent of personal or political gain.
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Question 3 of 5
3. Question
Which one of the following statements most accurately describes the supervisory relationship between the Lokpal and the Central Bureau of Investigation (CBI)?
Correct
Solution: C
- (a) is incorrect. The Lokpal can take over or monitor corruption cases, even involving the CBI.
- (b) is incorrect. While the Lokpal can refer cases to the CBI, it also has its own Inquiry Wing and can independently investigate corruption cases.
- (c) is correct. The Lokpal and Lokayuktas Act, 2013, grants the Lokpal specific powers of superintendence over the CBI for cases that the Lokpal has referred to the agency. This is a crucial power, intended to ensure impartiality and direct oversight over the investigation of high-level corruption.
(d) is incorrect. In referred cases, the Lokpal’s directions are binding, not merely advisory. The Lokpal can also sanction prosecution, demonstrating tangible authority.
Incorrect
Solution: C
- (a) is incorrect. The Lokpal can take over or monitor corruption cases, even involving the CBI.
- (b) is incorrect. While the Lokpal can refer cases to the CBI, it also has its own Inquiry Wing and can independently investigate corruption cases.
- (c) is correct. The Lokpal and Lokayuktas Act, 2013, grants the Lokpal specific powers of superintendence over the CBI for cases that the Lokpal has referred to the agency. This is a crucial power, intended to ensure impartiality and direct oversight over the investigation of high-level corruption.
(d) is incorrect. In referred cases, the Lokpal’s directions are binding, not merely advisory. The Lokpal can also sanction prosecution, demonstrating tangible authority.
-
Question 4 of 5
4. Question
Consider the following statements about the “Forest Declaration Assessment 2025” report:
- It was released under the Glasgow Leaders’ Declaration on Forests and Land Use adopted at COP26.
- It reported that global forest loss in 2024 was lower than the level required to meet the 2030 zero-deforestation goal.
- Agricultural expansion was identified as the major driver of forest loss worldwide.
How many of the above statements are incorrect?
Correct
Solution: A
- The Forest Declaration Assessment 2025 tracks progress towards halting deforestation by 2030 as pledged in the Glasgow Leaders’ Declaration (COP26 2021).
- The report revealed that about 8.1 million hectares of forests were lost in 2024 — 63% higher than the trajectory needed to end deforestation, showing the world is off track, not ahead.
- It also confirmed that agriculture (especially cattle, soy, and palm oil) accounts for the majority of forest destruction. Therefore, statements 1 and 3 are correct, while 2 is incorrect.
Incorrect
Solution: A
- The Forest Declaration Assessment 2025 tracks progress towards halting deforestation by 2030 as pledged in the Glasgow Leaders’ Declaration (COP26 2021).
- The report revealed that about 8.1 million hectares of forests were lost in 2024 — 63% higher than the trajectory needed to end deforestation, showing the world is off track, not ahead.
- It also confirmed that agriculture (especially cattle, soy, and palm oil) accounts for the majority of forest destruction. Therefore, statements 1 and 3 are correct, while 2 is incorrect.
-
Question 5 of 5
5. Question
Consider the following statements about India’s Carbon Credit Trading Scheme (CCTS):
- It is a mandatory cap-and-trade system with absolute limits on emissions across all sectors.
- It is administered by the Bureau of Energy Efficiency (BEE) under the Ministry of Power.
- It replaces the earlier Perform-Achieve-Trade (PAT) and Renewable Energy Certificate (REC) mechanisms entirely.
How many of the above statements are correct?
Correct
Solution: A
- Statement 2 is correct: the Bureau of Energy Efficiency (BEE), under the Ministry of Power, is the nodal implementing agency for developing the Indian Carbon Market (ICM) through the Carbon Credit Trading Scheme (CCTS) notified in 2023.
- Statement 1 is incorrect because the scheme is not yet a full “cap-and-trade” system; it currently operates through performance-based or project-based emission reductions, and sectoral emission caps will evolve later.
- Statement 3 is incorrect: the CCTS does not replace PAT or REC but integrates their frameworks to create a unified carbon credit market. India’s system is still in a formative stage — it lacks an independent regulator, strong verification protocols, and absolute emission caps. These deficiencies create challenges for recognition under the EU’s CBAM mechanism.
Incorrect
Solution: A
- Statement 2 is correct: the Bureau of Energy Efficiency (BEE), under the Ministry of Power, is the nodal implementing agency for developing the Indian Carbon Market (ICM) through the Carbon Credit Trading Scheme (CCTS) notified in 2023.
- Statement 1 is incorrect because the scheme is not yet a full “cap-and-trade” system; it currently operates through performance-based or project-based emission reductions, and sectoral emission caps will evolve later.
- Statement 3 is incorrect: the CCTS does not replace PAT or REC but integrates their frameworks to create a unified carbon credit market. India’s system is still in a formative stage — it lacks an independent regulator, strong verification protocols, and absolute emission caps. These deficiencies create challenges for recognition under the EU’s CBAM mechanism.
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