🧠 Daily UPSC Mock Test – 31 July 2025
Welcome aspirants! This is your Daily Practice Quiz consisting of 30 high-quality questions to strengthen your UPSC Prelims preparation.
- 📘 Subjects: Polity, Economy, History, Environment, S&T, Current Affairs
- ⏱️ Time Limit: 30 Minutes
- 📝 Difficulty Level: UPSC Prelims Standard
💡 Tip: Read all options carefully, eliminate smartly, and revise your mistakes from the explanations.
👇 Start Your Test 👇
Results
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#1. The Phillips Curve illustrates the relationship between:
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➡️ Correct Answer: 1
Explanation:
The Phillips Curve shows an inverse relationship between inflation and unemployment in the short run. As inflation rises, unemployment tends to fall, and vice versa—though this relationship may not hold in the long run.
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Twin Deficit – Fiscal + Current account deficit
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Hot Money – Short-term speculative foreign capital
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Primary Deficit – Fiscal Deficit – Interest payments
#2. Which pairs are correctly matched:
Correct Answer: 4
Explanation:
All definitions are correct. These are standard macroeconomic concepts often asked in UPSC.
#3. Which of the following are revenue expenditure?
➡️ Correct Answer: 4
Explanation:
All three are classified as revenue expenditure because they do not create any physical asset.
Consider the following regarding ‘National Income’:
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It includes net factor income from abroad
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It is calculated at market prices
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It excludes indirect taxes and includes subsidies
#4. Choose the correct answer:
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➡️ Correct Answer: 2
Explanation:
National Income = NNP at factor cost (not market prices). Hence, statement 2 is incorrect.
#5. Which of the following correctly describes ‘Fiscal Drag’?
Correct Answer: 2
Explanation:
Fiscal drag happens when inflation increases people’s nominal income, pushing them into higher tax brackets, even if their real income hasn’t changed. As a result, tax revenues rise without a corresponding increase in purchasing power, reducing aggregate demand.
#6. Which of the following sectors is NOT covered under the PLI Scheme?
➡️ Correct Answer: 3
Explanation:
Leather is not among the key sectors selected for PLI. The scheme focuses on high-potential sectors like pharma, telecom, electronics, textiles, and auto components.
Which of the following can lead to an appreciation of Indian Rupee?
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Rising FDI inflows
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Higher crude oil imports
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Increase in interest rates by RBI
#7. Choose the correct answer:
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➡️ Correct Answer: 2
Explanation:
FDI inflows and higher interest rates attract foreign capital → stronger rupee. But oil imports increase forex demand, weakening rupee.
#8. Which of the following items are included in the Capital Account of BoP?
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➡️ Correct Answer: 1
Explanation:
FDI and ECBs are part of the Capital Account, while exports and imports belong to the Current Account of Balance of Payments (BoP).
#9. The term ‘Fiscal Consolidation’ in India refers to:
➡️ Correct Answer: 1
Explanation:
Fiscal consolidation means reducing government deficits and debt accumulation through prudent fiscal management, such as controlling subsidies and enhancing tax revenue.
#10. What best explains the concept of ‘Effective Revenue Deficit’?
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➡️ Correct Answer: 3
Explanation:
Effective Revenue Deficit = Revenue Deficit – Grants for capital asset creation. It was introduced to better reflect the actual revenue shortfall excluding productive capital grants.
#11. Which scheme is related to promotion of electric mobility in India?
➡️ Correct Answer: 2
Explanation:
FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) is a central scheme aimed at promoting EV adoption and reducing dependence on fossil fuels.
#12. What does ‘Core Inflation’ refer to?
Correct Answer: 1
Explanation:
Core inflation = Headline inflation – volatile components (food & fuel). It shows underlying trends.
#13. Which of the following can be used to manage inflation?
Correct Answer: 1
Explanation:
To control inflation, RBI may increase CRR, reducing money supply. Decreasing fiscal deficit is also deflationary. But purchasing securities increases liquidity — not an inflation-control measure.
#14. Which entity manages the National Monetisation Pipeline (NMP)?
➡️ Correct Answer: 2
Explanation:
The NITI Aayog in collaboration with the Ministry of Finance conceptualized the National Monetisation Pipeline, aimed at leasing public assets like highways, railways, and power lines to generate revenue.
#15. Which is NOT a function of RBI?
➡️ Correct Answer: 3
Explanation:
Long-term agri-credit is handled by NABARD, not RBI. RBI’s core functions include currency issuance, forex management, and monetary policy.
#16. Consider the following about ‘Repo Rate’:
➡️ Correct Answer: 4
Explanation:
Statements 1 and 2 are correct: repo rate is set by RBI and impacts liquidity. Statement 3 is incorrect — SEBI is not involved in setting monetary policy.
#17. The concept of ‘Green GDP’ includes adjustment for which factor?
➡️ Correct Answer: 2
Explanation:
Green GDP is GDP adjusted for environmental degradation and resource depletion. It gives a more sustainable picture of national progress, highlighting ecological costs of growth.
#18. What is meant by ‘Open Market Operations’?
➡️ Correct Answer: 2
Explanation:
Open Market Operations (OMO) refer to RBI buying/selling government securities to regulate money supply and liquidity.
#19. In Union Budget 2024-25, which sector received the highest capital allocation?
➡️ Correct Answer: 3
Explanation:
The Transport sector, particularly infrastructure (highways, railways, logistics), received the highest capital expenditure in the 2024–25 Union Budget, aligning with the PM Gati Shakti plan and infra-led growth strategy.
#20. Which is not a component of Aggregate Demand?
➡️ Correct Answer: 4
Explanation:
Aggregate demand = C + I + G + NX. Treasury bills are financial instruments, not part of AD.
#21. Which are components of M3 (Broad Money)?
➡️ Correct Answer: 4
Explanation:
M3 includes: Currency with the public + Demand deposits + Time deposits. It is the broadest measure of money supply used by RBI.
#22. Which statements are true about the GDP deflator?
Correct Answer: 3
Explanation:
GDP deflator reflects inflation for the entire economy (both goods and services). It’s broader than CPI. Statement 2 is wrong.
#23. Which rating agency downgraded global growth forecast for 2024 citing inflation?
➡️ Correct Answer: 3
Explanation:
In early 2024, Moody’s revised global growth projections downward due to persistent inflation, geopolitical tensions, and tightening monetary conditions.
#24. Which country is India’s largest trading partner as of 2024?
➡️ Correct Answer: 2
Explanation:
According to 2024 data from the Ministry of Commerce, the United States has continued to be India’s largest trading partner, overtaking China in recent years, due to increasing exports and strategic trade ties.
With reference to ‘Monetary Policy Committee (MPC)’, consider the following:
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It is a 6-member committee
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The RBI Governor is the ex-officio Chairperson
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It decides the repo rate by consensus only
#25. Select the correct answer using the code below:
➡️ Correct Answer: 1
Explanation:
MPC has 6 members; RBI Governor is Chair. Decisions are by majority, not consensus.
#26. Correct statement about monetary policy in India?
➡️ Correct Answer: 3
Explanation:
Higher repo rate → costly borrowing → reduced money supply → helps control inflation.
#27. Which organization releases the ‘World Economic Outlook’ report?
➡️ Correct Answer: 2
Explanation:
The International Monetary Fund (IMF) publishes the World Economic Outlook (WEO) report, providing analysis of global economic trends and forecasts. It is a key source for UPSC current affairs.
#28. Which Indian initiative was launched to boost semiconductor manufacturing?
➡️ Correct Answer: 2
Explanation:
The PLI Scheme has specific incentives for semiconductors and display manufacturing, attracting firms like Micron and Foxconn to invest in India.
#29. With reference to the External Commercial Borrowings (ECBs), which are correct?
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➡️ Correct Answer: 2
Explanation:
ECBs are usually denominated in foreign currency (not rupees). They are used by Indian companies for capital expansion and are regulated under FEMA and RBI guidelines. So, only 2 and 3 are correct, but the correct option is 2 only as per the original framing.
#30. What is the revised fiscal deficit target for India in FY 2024-25?
➡️ Correct Answer: 1
Explanation:
The government set the fiscal deficit target at 5.1% of GDP for FY 2024–25, continuing its path toward fiscal consolidation, down from previous highs during the pandemic years.