Q1. Which of the following best describes the function of a 'base year' in national accounts?
(a) It serves as the reference for computing current tax revenues in real terms.
(b) It determines the ratio of real GDP to nominal GDP in the given year.
(c) It provides a constant-price reference for comparing economic output over time.
(d) It is a statistical construct that controls the monetary base of the economy.
Explanation:
The base year allows inflation-adjusted GDP (real GDP) to be calculated using prices from a fixed year, enabling inter-year comparison.
Therefore, (c) is the correct answer.
Q2. In the context of national income accounting, consider the following statements:
1. A change in the base year affects the real GDP but not the nominal GDP.
2. The choice of base year should ideally coincide with a year of major economic disruption to reflect structural changes.
3. Frequent revision of base years ensures better alignment with prevailing consumption and production patterns.
4. GDP at market prices includes both indirect taxes and subsidies.
(a) 1 and 3 only
(b) 2 and 4 only
(c) 3 and 4 only
(d) 1, 2 and 3 only
Explanation:
- Statement 1 is incorrect: A base year change does not affect nominal GDP (which is at current prices), but it does affect real GDP, so this part is half-true but misleading.
- Statement 2 is incorrect: Ideally, the base year should be a normal year, not a year of disruption (e.g., no pandemic, war, or severe economic shock).
- Statement 3 is correct: Frequent base year revisions help capture new economic trends, consumption behavior, and sectors like tech or services.
- Statement 4 is correct: GDP at market prices = GVA at basic prices + net indirect taxes (i.e., indirect taxes – subsidies).
Therefore, (c) is the correct answer, 3 and 4 only
Q3. With reference to the ‘Vithoot’ programme recently launched in Kerala, consider the following statements:
1. It employs aerial seed dispersal for afforestation through seed balls.
2. It involves participation of defence agencies and use of modern technology.
3. It focuses exclusively on reforesting wildlife sanctuaries and reserved forests.
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
Explanation:
- Statements 1 and 2 are correct: The ‘Vithoot’ programme uses aerial seed distribution, including the possible use of drones and helicopters, with the involvement of agencies like the Air Force.
- Statement 3 is incorrect: The effort targets a broader range of degraded lands including abandoned plantations, open canopies, reservoir catchments, landslide-hit areas, and land vacated by tribal communities—not just protected forests.
- Therefore, (a) is the correct answer.
Q4.
Statement I: Despite consistent improvements in HDI components, India still ranks lower than all other BRICS countries.
Statement II: India's HDI value has crossed the threshold for "high human development" category.
(a) Only I
(b) Only II
(c) Both I and II
(d) Neither I nor II
Explanation:
- Statement I is correct: Other BRICS countries — Russia (64), China (75), Brazil (84), South Africa — all rank above India (130).
- Statement II is incorrect: With an HDI of 0.685 in 2023, India falls within the Medium Human Development category (0.550–0.699), not yet crossing into the High Human Development level (≥ 0.700)
- Therefore, (a) is the correct answer.
Q5. With reference to recent poverty estimates in India, consider the following statements:
1. The World Bank has raised the extreme poverty line to $3/day.
2. Poverty under the $4.2/day threshold in India stood at over 50% in 2022–23.
3. Gini and Theil indices in India have shown a rising trend between 2011 and 2022.
(a) 1 and 2 only
(b) 1 only
(c) 2 and 3 only
(d) 1 and 3 only
Explanation:
- Statement 1 is correct: The World Bank has raised its extreme poverty threshold from $2.15 to $3.00 per day. India’s extreme poverty dropped from 27.1% in 2011–12 to 5.3% in 2022–23 based on this updated benchmark
- Statement 2 is correct: With the updated $4.20/day threshold (for lower-middle-income countries), India’s poverty ratio declined from 57.7% to 23.9% in the same period — confirming that over 50% were under that line in 2011–12 but not by 2022–23. However, the statement claims “stood at over 50% in 2022–23,” which is not correct (it’s now around 23.9%). Therefore, Statement 2 is incorrect relative to 2022–23 statistics.
- Statement 3 is incorrect: Inequality in India, measured via Gini and Theil indices, has decreased between 2011 and 2022, not risen.
- Therefore, (b) is the correct answer, 1 only
Q6. Consider the following statements regarding the High Seas Treaty:
1. It aims to protect marine biodiversity in areas beyond national jurisdiction.
2. It is already in force and binding on all UN member states.
3. It proposes the creation of a global mechanism to monitor conservation efforts in high seas.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Explanation:
- Statement 1 is correct: The High Seas Treaty (BBNJ Agreement) is the first legally binding international agreement aimed at protecting marine biodiversity in areas beyond national jurisdiction, i.e., the high seas.
- Statement 2 is incorrect: The Treaty is not yet in force. It requires at least 60 ratifications and enters into force 120 days after the 60th, but as of now, about 49–55 ratifications are in place. It is not yet binding on all UN members.
- Statement 3 is correct: The Treaty indeed proposes establishing global mechanisms, including a Conference of the Parties, scientific committees, and other oversight structures to monitor and manage conservation efforts on the high seas.
- Therefore, the correct answer is (c), 1 and 3 only
- Read more about High Seas Treaty
Q7. With reference to ocean carbon sequestration, which of the following statements is/are correct?
1. Oceans absorb more carbon dioxide than terrestrial ecosystems.
2. The biological pump plays a central role in long-term oceanic carbon storage.
3. Most carbon absorption occurs near hydrothermal vents in deep oceans.
(a) 1, 2 and 3
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1 and 2 only
Explanation:
- Statement 1 is correct: Oceans absorb about 30–31% of anthropogenic CO₂ emissions and hold far more carbon in total than terrestrial ecosystems
- Statement 2 is correct: The biological carbon pump — driven by processes like phytoplankton photosynthesis and the sinking of organic matter — is central to long-term oceanic carbon storage
- Statement 3 is incorrect. While hydrothermal vents provide nutrients (e.g., iron) that boost productivity, most carbon absorption occurs across the global surface ocean, not specifically near these vents
- Therefore, the correct answer is (d), 1 and 2 only.
Q8. With reference to UNCLOS and the High Seas Treaty, consider the following statements:
1. UNCLOS defines Exclusive Economic Zones but does not include specific provisions for biodiversity protection in high seas.
2. The High Seas Treaty provides for environmental impact assessments before activities in areas beyond national jurisdiction.
3. Both UNCLOS and the High Seas Treaty are legally binding upon ratification by member states.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Explanation:
- Statement 1 is correct: UNCLOS indeed defines Exclusive Economic Zones (EEZs) but lacks specific provisions for protecting biodiversity in the high seas (beyond national jurisdiction). Conservation of marine biodiversity in these areas was left unregulated under UNCLOS
- Statement 2 is correct: The High Seas Treaty (BBNJ Agreement) includes mandatory Environmental Impact Assessments (EIAs) for potentially harmful activities in international waters.
- Statement 3 is correct: Both are legally binding upon ratification. UNCLOS is already in force; the High Seas Treaty will be binding only after ratification by 60 states.
- Therefore, (d) is the correct answer, 1, 2 and 3.
Q9. According to recent World Bank estimates, what proportion of India’s population lived below the extreme poverty line in 2022–23?
(a) About 27%
(b) About 23%
(c) About 14%
(d) About 5%
Explanation:
According to the latest World Bank data, India’s proportion of population living below the extreme poverty line (set at $3 per day) in 2022–23 was approximately 5.3% Earlier (2011–12), this was 27.1%, showing sharp decline.
Therefore, (d) is the correct answer.