UPSC CDS (Combined Defence Services) General Knowledge: Economics and Current Affairs (Paper II) Flashcards

24 sample cards from the General Knowledge: Economics and Current Affairs (Paper II) deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is the difference between demand-pull and cost-push inflation?

   Demand-pull inflation occurs when aggregate demand exceeds aggregate supply. Cost-push inflation occurs when production costs (wages, raw materials) rise, pushing up prices despite stable demand.

2. What is the difference between WPI and CPI in India, and who releases them?

   WPI (Wholesale Price Index) measures price changes at the wholesale level and is released by the Office of the Economic Adviser (Ministry of Commerce). CPI (Consumer Price Index) measures retail price changes and is released by the NSO; the RBI uses CPI for inflation targeting.

3. What do the terms inflation, deflation, disinflation and stagflation mean?

   Inflation = sustained rise in price level. Deflation = sustained fall in price level. Disinflation = slowing of the inflation rate (still positive). Stagflation = stagnant growth/high unemployment combined with high inflation.

4. What is the Balance of Payments (BoP) and its two main accounts?

   The BoP records all economic transactions between residents of a country and the rest of the world. Its two main accounts are the Current Account (trade in goods, services, income, transfers) and the Capital Account (capital flows like FDI, FPI, loans).

5. What is the difference between Balance of Trade and Balance of Payments?

   Balance of Trade is the difference between a country's exports and imports of goods (visible items only). Balance of Payments is broader, including goods, services, income, transfers, and capital flows.

6. What is the difference between FDI and FPI?

   FDI (Foreign Direct Investment) is long-term investment giving control/management interest in a business (typically 10%+ stake). FPI (Foreign Portfolio Investment) is investment in financial assets like stocks/bonds without management control, and is more volatile ('hot money').

7. What is currency depreciation versus devaluation?

   Depreciation is a fall in a currency's value under a floating exchange-rate system due to market forces. Devaluation is a deliberate reduction in the currency's value by the government/central bank under a fixed exchange-rate system.

8. When were the IMF and World Bank established, and what does each primarily do?

   Both were established at the Bretton Woods Conference (1944). The IMF (International Monetary Fund) provides short-term loans to address balance-of-payments problems and ensures exchange-rate stability. The World Bank provides long-term loans for development and poverty reduction.

9. What are Special Drawing Rights (SDR) and which currencies form its basket?

   SDR is an international reserve asset created by the IMF. Its value is based on a basket of five currencies: US Dollar, Euro, Chinese Renminbi, Japanese Yen, and British Pound Sterling.

10. When was the WTO established, where is it headquartered, and what did it replace?

    The World Trade Organization was established on 1 January 1995, is headquartered in Geneva, Switzerland, and replaced GATT (General Agreement on Tariffs and Trade).

11. What is the classification of the three sectors of an economy with examples?

    Primary sector (natural resource extraction: agriculture, mining, fishing), Secondary sector (manufacturing/industry), and Tertiary sector (services: banking, IT, transport, trade).

12. What was the Green Revolution and which two scientists are associated with it in India?

    The Green Revolution (mid-1960s) was the introduction of High-Yielding Variety (HYV) seeds, fertilizers, and irrigation that boosted foodgrain (mainly wheat) production. M.S. Swaminathan (India) and Norman Borlaug (globally) are associated with it.

13. What are White, Blue, Yellow and Pink revolutions in Indian agriculture?

    White Revolution = milk/dairy (Operation Flood, Verghese Kurien). Blue Revolution = fish production. Yellow Revolution = oilseeds production. Pink Revolution = meat/poultry processing.

14. In which year were the major economic reforms (LPG) launched in India and who were the key figures?

    The LPG (Liberalization, Privatization, Globalization) reforms were launched in 1991 under Prime Minister P.V. Narasimha Rao and Finance Minister Dr. Manmohan Singh, triggered by a balance-of-payments crisis.

15. What do Liberalization, Privatization and Globalization each mean in the 1991 reforms context?

    Liberalization = removing restrictions/licensing on private business (end of Licence Raj). Privatization = transferring ownership/management from public to private sector (disinvestment). Globalization = integrating the domestic economy with the world economy through trade and investment.

16. What was the New Industrial Policy of 1991's impact on industrial licensing?

    It abolished industrial licensing for most industries (retaining it for a few), reduced the number of industries reserved for the public sector, and opened many sectors to private and foreign investment (FDI).

17. What is the objective of the PM Jan Dhan Yojana (PMJDY)?

    Launched in 2014, PMJDY aims at financial inclusion by providing universal access to banking — a zero-balance bank account with RuPay debit card, accident/life insurance cover, and overdraft facility for the unbanked.

18. What does MGNREGA guarantee and in which year was it enacted?

    The Mahatma Gandhi National Rural Employment Guarantee Act, enacted in 2005, guarantees at least 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.

19. What is the goal of the PM Kisan Samman Nidhi (PM-KISAN) scheme?

    PM-KISAN (launched 2019) provides income support of Rs 6,000 per year, paid in three equal installments of Rs 2,000, to eligible landholding farmer families through direct benefit transfer.

20. What is the Ayushman Bharat - PMJAY scheme?

    Pradhan Mantri Jan Arogya Yojana (launched 2018) provides health insurance cover of Rs 5 lakh per family per year for secondary and tertiary care hospitalization to poor and vulnerable families; it is the world's largest health assurance scheme.

21. What is a Minimum Support Price (MSP) and who recommends it?

    MSP is the minimum price guaranteed by the government to farmers for their produce to protect them from price falls. It is recommended by the Commission for Agricultural Costs and Prices (CACP).

22. Which countries are the members of the BRICS grouping, and what was its 2024 expansion?

    BRICS originally comprised Brazil, Russia, India, China, and South Africa. From 1 January 2024 it expanded to include new members such as Egypt, Ethiopia, Iran, and the UAE (with later additions), broadening the bloc of emerging economies.

23. What does the QUAD grouping consist of and what is its purpose?

    The Quadrilateral Security Dialogue (QUAD) consists of India, the USA, Japan, and Australia. It is a strategic forum aimed at promoting a free, open, and inclusive Indo-Pacific region.

24. Who established the Nobel Prize, in which categories, and which Indians won the Economics prize?

    The Nobel Prizes were established under the will of Alfred Nobel, awarded in Physics, Chemistry, Medicine, Literature, Peace, and Economic Sciences (added 1969). Amartya Sen (1998) and Abhijit Banerjee (2019) are Indian-origin winners of the Economics Nobel.

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General Knowledge: Economics and Current Affairs (Paper II) flashcards FAQ