Practice questions (authored for this wiki), not verbatim PYQs. Written to mirror the CAPF Paper I level across economy fundamentals and durable current-events knowledge. Current-events items here lean on facts that stay stable over time, not week-old news. Attempt closed-book, then check the key.
Q1Which institution is the central bank of India and regulates monetary policy?
- ASEBI
- BNABARD
- CReserve Bank of India
- DNITI Aayog
Q2The rate at which the RBI lends short-term funds to commercial banks is called the:
- ABank rate
- BRepo rate
- CReverse repo rate
- DCash reserve ratio
Q3 (statement-based). Consider the following about inflation:
- Inflation is a sustained rise in the general price level.
- The RBI's flexible inflation-targeting framework targets consumer price index (CPI) inflation at 4 percent, with a band of plus or minus 2 percent.
- A rise in the repo rate is used to control inflation.
Which are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Q4The Goods and Services Tax (GST) in India was introduced by which Constitutional Amendment?
- A100th
- B101st
- C102nd
- D103rd
Q5Match List I (Term) with List II (Meaning):
- AFiscal deficit 1. Total expenditure minus total receipts excluding borrowings
- BRevenue deficit 2. Revenue expenditure minus revenue receipts
- CPrimary deficit 3. Fiscal deficit minus interest payments
- DGDP 4. Total value of goods and services produced within a country
Codes:
- AA-1, B-2, C-3, D-4
- BA-2, B-1, C-3, D-4
- CA-1, B-3, C-2, D-4
- DA-4, B-2, C-3, D-1
Q6Which body decides the repo rate in India?
- AThe Union Cabinet
- BThe Monetary Policy Committee (MPC)
- CSEBI
- DThe Finance Commission
Q7Foreign Direct Investment (FDI) differs from Foreign Portfolio Investment (FPI / FII) mainly in that FDI:
- AIs short-term and easily withdrawn
- BInvolves a lasting interest and management control in an enterprise
- CIs invested only in the stock market
- DIs made only by the government
Q8The scheme that provides a financial inclusion push by opening zero-balance bank accounts is:
- APradhan Mantri Jan Dhan Yojana
- BMGNREGA
- CAyushman Bharat
- DPM-KISAN
Q9 (statement-based). Consider the following about the Indian budget:
- The Union Budget is presented under Article 112 as the Annual Financial Statement.
- The fiscal year in India runs from 1 April to 31 March.
- The Finance Commission is a permanent body constituted every year.
Which are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Q10MGNREGA guarantees how many days of wage employment per year to a rural household?
- A50 days
- B100 days
- C150 days
- D200 days
Q11The Cash Reserve Ratio (CRR) refers to:
- AThe share of deposits banks must keep with the RBI
- BThe interest rate on savings accounts
- CThe tax on banking transactions
- DThe minimum balance in a customer account
Q12Ayushman Bharat (PM-JAY) is primarily a scheme for:
- AFree LPG connections
- BHealth insurance and free secondary and tertiary care
- CCrop insurance
- DOld-age pensions
Q13Which organisation publishes the World Economic Outlook?
- AWorld Bank
- BInternational Monetary Fund (IMF)
- CWorld Trade Organization
- DUnited Nations Development Programme
Reveal the answer key and full worked solutions
| Q |
Answer |
| 1 |
(c) Reserve Bank of India |
| 2 |
(b) Repo rate |
| 3 |
(d) 1, 2 and 3 |
| 4 |
(b) 101st |
| 5 |
(a) A-1, B-2, C-3, D-4 |
| 6 |
(b) Monetary Policy Committee |
| 7 |
(b) Lasting interest and management control |
| 8 |
(a) Pradhan Mantri Jan Dhan Yojana |
| 9 |
(a) 1 and 2 only |
| 10 |
(b) 100 days |
| 11 |
(a) Share of deposits kept with the RBI |
| 12 |
(b) Health insurance for secondary and tertiary care |
| 13 |
(b) International Monetary Fund |
- Q1. The Reserve Bank of India is the central bank and conducts monetary policy. See money and banking and the rbi.
- Q2. The repo rate is the rate at which the RBI lends short-term funds to commercial banks against securities. See money and banking and the rbi.
- Q3. All three are correct: inflation is a sustained price rise, the RBI targets 4 percent CPI inflation with a 2 to 6 percent band, and raising the repo rate is the standard tool to cool inflation. See inflation and prices.
- Q4. GST was introduced by the Constitution (101st Amendment) Act, 2016, effective 1 July 2017. See taxation and gst.
- Q5. Fiscal deficit is total expenditure minus receipts excluding borrowings, revenue deficit is revenue expenditure minus revenue receipts, primary deficit is fiscal deficit minus interest payments, and GDP is total domestic output. See budget and fiscal policy.
- Q6. The six-member Monetary Policy Committee, chaired by the RBI Governor, sets the repo rate. See money and banking and the rbi.
- Q7. FDI involves a lasting interest and a degree of management control, while FPI or FII is short-term financial investment, often in securities, that can exit quickly. See external sector trade and bop.
- Q8. Pradhan Mantri Jan Dhan Yojana (2014) drove financial inclusion through zero-balance accounts. See major economic schemes.
- Q9. Statements 1 and 2 are correct. The Finance Commission is constituted every five years (not annually) under Article 280, so statement 3 is wrong. See budget and fiscal policy.
- Q10. MGNREGA guarantees 100 days of wage employment per year to a rural household. See agriculture and rural economy.
- Q11. The CRR is the proportion of a bank's deposits it must hold as reserves with the RBI; it is a liquidity tool, not an interest rate. See money and banking and the rbi.
- Q12. Ayushman Bharat (PM-JAY) provides health insurance cover for secondary and tertiary hospitalisation to eligible families. See major economic schemes.
- Q13. The IMF publishes the World Economic Outlook; the World Bank publishes other reports. See how to prepare current affairs for capf.