UPSC Civil Services Previous Year 2020 Question Papers With Answer Key

1 .

With reference to the Indian economy, consider the following statements:

1. ‘Commercial Paper’ is a short-term unsecured promissory note.

2. ‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation.

3. ‘Call Money’ is a short-term finance used for interbank transactions.

4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.

Which of the statements given above is/are correct?

A)

1 and 2 only

B)

4 only

C)

1 and 3 only

D)

3 and 4 only

Correct Answer : Option (C) - 1 and 3 only

Note :

Commercial paper is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities. Maturities on commercial paper typically last several days, and rarely range longer than 270 days. So statement 1 is correct.

The Certificate of Deposit (CD) is an agreement between the depositor and the bank where a predetermined amount of money is fixed for a specific time period. It is issued by the Federal Deposit Insurance Corporation (FDIC) and regulated by the Reserve Bank of India, the CD is a promissory note, the interest on which is paid by the bank. CDs are short-term debt instruments issued by Banks. So statement 2 is not correct.

Call Money is short term finance used for inter-bank transactions. It has a maturity period of one day to fifteen days. Call money is a facility under which banks borrow money from each other to adjust short-term liquidity imbalances at rate of interest known as Call Rate. This rate keeps on changing from day to day and sometimes from hour to hour. So statement 3 is correct.

A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value. These bonds have been traditionally issued by government, but banks are also allowed to issue them since last few years. But ZCBs are generally Long-Term Bonds. So statement 4 is not correct.

Year : 2020

Category : General Studies

2 .

Consider the following statements :

1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.

2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.

Which of the statements given above is/are correct ?

A)

1 only

B)

2 only

C)

Both 1 and 2

D)

Neither 1 nor 2

Correct Answer : Option (D) - Neither 1 nor 2

Note :

The procurement of oil seeds, pulses and cereals is not unlimited. Under PM-AASHA guidelines limit the procurement to 25% of pulses and oil seeds production at MSP. So, statement 1 is not correct.

Market price, by definition, is determined through demand and supply force. So, it is difficult to predict whether market price for any crop must be lower or higher as compared to MSP. So, statement 2 is also not correct.

Year : 2020

Category : General Studies

3 .

Consider the following pairs :

River		Flows into
Mekong	:	Andaman Sea
Thames	:	Irish Sea
Volga	:	Caspian Sea
Zambezi	:	Indian Ocean

Which of the pairs given above is/are correctly matched?

A)

1 and 2 only

B)

3 only

C)

3 and 4 only

D)

1, 2 and 4 only

Correct Answer : Option (C) - 3 and 4 only

Note :

• Mekong river flows into South China Sea after crossing Laos, (Also some parts of Myanmar) Thailand, Cambodia and lastly in Vietnam.

• Thames flows into English channel. It passes through London which is on the Eastern part of U.K. Irish sea is on the Western side.

• Zambezi river flows into Indian Ocean after crossing Mozambique. It is in the East Africa.

• Volga flows into Caspian Sea after meandering through Russia

Year : 2020

Category : General Studies

4 .

Consider the following statements :

1. The weightage of food in Consumer Price Index (CPI) is higher than that Wholesale Price Index (WPI).

2. The WPI does not capture changes in the prices of services, which CPI does.

3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.

Which of the statements given above is/are correct?

A)

1 and 2 only

B)

2 only

C)

3 only

D)

1, 2 and 3

Correct Answer : Option (A) - 1 and 2 only

Note : WPI is the price of representative basket of wholesale goods. While the CPI is a comprehensive measure, used for estimation of price changes in a basket of goods and services representative of consumption expenditure in an economy. Food weight in WPI is 18.8% which part of primary products, While CPI has 50% weight for food. So statement 1 is correct.

Year : 2020

Category : General Studies

5 .

Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?

1. Working capital for maintenance of farm assets

2. Purchase of combine harvesters, tractors and mini truck

3. Consumption requirements of farm households

4. Post-harvest expenses

5. Construction of family house and setting up of village cold storage facility

Select the correct answer using the code given below :

A)

1, 2 and 5 only

B)

1, 3 and 4 only

C)

2, 3, 4 and 5 only

D)

1, 2, 3, 4 and 5

Correct Answer : Option (B) - 1, 3 and 4 only

Note :

The scheme aims at providing adequate and timely credit for the comprehensive credit requirements of farmers under single window for their cultivation and other needs as indicated below :

• To meet the short term credit requirements for cultivation of crops

• Post harvest expenses

• Produce Marketing loan

• Consumption requirements of farmer household

• Working capital for maintenance of farm assets, activities allied to agriculture, like dairy animals, inland fishery and also working capital required for floriculture, horticulture etc.

• Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals, floriculture, horticulture etc

• Short term credit requirements of rearing of animals, birds, fish, shrimp, other aquatic organisms, capture of fish.

Year : 2020

Category : General Studies

6 .

In which one of the following groups are all the four countries members of G20?

A)

Argentina, Mexico, South Africa and Turkey

B)

Australia, Canada, Malaysia and New Zealand

C)

Brazil, Iran, Saudi Arabia and Vietnam

D)

Indonesia, Japan, Singapore and South Korea

Correct Answer : Argentina, Mexico, South Africa and Turkey

Note :

The Group of Twenty (G20) is the premier international forum for global economic cooperation. Its members are :

Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, and the European Union.

Year : 2020

Category : General Studies

7 .

Consider the following statements :

1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.

2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.

3. In the last five years, Nepal has been the largest trading partner of India in South Asia.

Which of the statements given above is/are correct?

A)

1 and 2 only

B)

2 only

C)

3 only

D)

1, 2 and 3

Correct Answer : Option (B) - 2 only

Note :

The trade between India and Sri Lanka was valued at USD 4.5 billion during 2016-17 as compared to USD 6.05 billion during 2015-16, registering a sharp decline of 25.25%. The exports decreased by 26.14 % to USD 3.9 billion in 2016-17 from USD 5.31 billion in the previous year. The export value in 2016-17 is the lowest in last 5 years. The decline is entirely contributed by reduction in export of aircraft by USD 1.22 billion. The imports decreased by 19% to USD 602.21 million from USD 742.79 million in 2015-16. Hence statement one is also not correct. So, statement 1 is not correct.

Textiles contributed 31.3% of Indian exports to Bangladesh in 2016-17. The other prominent products of export were engineering products (around 25% of exports), Chemical products (9% of exports) and vegetable products such as fresh vegetables (8% of exports). These top product categories accounted for 73% of total exports to Bangladesh. Textiles and textile products formed the largest component of imports from Bangladesh, and contributed to 60% of total imports. Within textiles, jute products were the biggest import item. Hence second statement is right. So, statement 2 is correct.

As per 2016-17 data, Bangladesh is the largest trading partner in South Asia, followed by Nepal, Sri Lanka, Pakistan, Bhutan, Afghanistan and Maldives. The level of Indian exports also follows the same order. So statement 3 is not correct.

Year : 2020

Category : General Studies

8 .

Which of the following factors/policies were affecting the price of rice in India in the recent past?

1. Minimum Support Price

2. Government’s trading

3. Government’s stockpiling

4. Consumer subsidies

Select the correct answer using the code given below :

A)

1, 2 and 4 only

B)

1, 3 and 4 only

C)

2 and 3 only

D)

1, 2, 3 and 4.

Correct Answer : Option (D) - 1, 2, 3 and 4.

Note :

By the following ways the price of rice in India gets affected :

• MSP increases the overall price of rice in market as the traders have to buy near MSP value otherwise farmers have the option to sell to government appointed agency at MSP.

• Government also carries out auction of the excess stockpile or intervenes when market prices soar to stabilize them.

• Similarly stockpiling is done to offload the stock when market prices soar providing cheap rice to consumers and stocking when prices fall ensuring remunerative prices to farmers.

• Government also provides subsidised food to poor at Fair price Shops. This reduces the overall demand in the open market and prices are affected.

Year : 2020

Category : General Studies

9 .

What is the importance of the term “Interest Coverage Ratio” of a firm in India?

1. It helps in understanding the present risk of a firm that a bank is going to give loan to.

2. It helps in evaluating the emerging risk of a firm that a bank is going to give loan to.

3. The higher a borrowing firm’s level of Interest Coverage Ratio, the worse is its ability to service its debt.

Select the correct answer using the code given below :

A)

1 and 2 only

B)

2 only

C)

1 and 3 only

D)

1, 2 and 3

Correct Answer : Option (A) - 1 and 2 only

Note :

One of the significant and most crucial liquidity ratios is the Interest Coverage Ratio, which indicates the level of a company's ability to afford the interest that is to be paid by the company for raising debt. It does not measure the ability to make principal payments on the debt; instead it depicts how much the company can afford to pay the interests on the debt promptly.

• The interest coverage ratio is used to see how well a firm can pay the interest on outstanding debt. So, statement 1 is correct.

• Also called the times-interest-earned ratio, this ratio is used by creditors and prospective lenders to assess the risk of lending capital to a firm. So, statement 2 is correct.

• A higher coverage ratio is better, although the ideal ratio may vary by industry. So, statement 3 is not correct.

Year : 2020

Category : General Studies

10 .

In India, which of the following can be considered as public investment in agriculture?

1. Fixing Minimum Support Price for agricultural produce of all crops

2. Computerization of Primary Agricultural Credit Societies

3. Social Capital development

4. Free electricity supply to farmers

5. Waiver of agricultural loans by the banking system

6. Setting up of cold storage facilities by the governments

Select the correct answer using the code given below :

A)

1, 2 and 5 only

B)

1, 3, 4 and 5 only

C)

2, 3 and 6 only

D)

1, 2 3, 4, 5 and 6

Correct Answer : Option (C) - 2, 3 and 6 only

Note :

• Public investment in Agriculture constitutes investments made by government to create capital or social assets to improve agricultural productivity. Fixing MSP gives farmers the remunerative price without creating any durable infrastructure. So, (1) is not correct.

• Computerization Agri credit societies improves their productivity by digitising their functioning. Social capital development like agri education improves the knowledge base of farmers paving the way for improved productivity. So, (2) and (3) are correct.

• While free electricity and waiver of agri loans creates government liabilities without creating any durable assets on ground. So, (4) and (5) are not correct.

• Cold chain infra also helps reduce post-harvest losses creating durable assets. So, (6) is correct.

Year : 2020

Category : General Studies