UPSC Essentials | Daily subject-wise quiz | Economy MCQs on West Texas Intermediate, RBI and more (Week 52)

Statement 1:

In India, the top 1% wealth share increased threefold, from 13% to 39% from 1961 to 2023.

Statement 2:

These increases came after 1991, at which point top 1% shares have been on a steady rising trend till 2022-23.

Which one of the following is correct in respect of the above statements?

(a) Both Statement 1 and Statement 2 are correct and Statement 2 is the correct explanation for Statement 1.

(b) Both Statement 1 and Statement 2 are correct and Statement 2 is not the correct explanation for Statement 1.

(c) Statement 1 is correct Statement 2 is incorrect

(d) Statement 1 is incorrect Statement 2 is correct

QUESTION 2

Consider the following statements:

1. Casual and regular employment was the primary source of employment in 2022.

2. More than half of the workforce is engaged in the informal sector.

3. The female labour force participation rate (LFPR) in India is lowest in the world.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

QUESTION 3

The term ‘West Texas Intermediate’, sometimes found in the news, refers to a grade of (PYQ UPSC 2020)

(a) Rare Earth Elements

(b) Uranium

(c) Thorium

(d) Crude Oil

QUESTION 4

Which of the following statements is not correct about the Reserve Bank of India (RBI)?

(a) Sir C D Deshmukh was the first Indian to become Governor of RBI.

(b) Following Partition, it was agreed that the RBI would continue to be the currency authority for Pakistan.

(c) The Monetary Policy Committee (MPC) is chaired by Governor of RBI.

(d) It is responsible for setting interest rates.

QUESTION 5

With reference to the Bharat Bill Payment System, consider the following statements:

1. It is a RBI conceptualised system driven by National Payments Corporation of India (NPCI).

2. It acts as a one-stop ecosystem for payment of all bills with an interoperable and accessible.

Which of the statement(s) given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

ANSWERS TO THE MCQs

1. (a)

FYI:

— A new working paper, titled “Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj”, by World Inequality Lab has estimated that “inequality declined post-independence till the early 1980s, after which it began rising and has skyrocketed since the early 2000s”.

Main takeaways

— According to WIL paper, between 1960 and 2022, India’s average income grew at 2.6% per year in real terms (that is, after removing the effect of inflation).

— From 1990 to 2022, there was a growth in national wealth and the emergence of very high net worth individuals (those with net wealth greater than $1 billion at market exchange rates; this number climbed from 1 to 52 to 162 in 1991, 2011, and 2022, respectively).

— With the 1991 economic changes, the percentage of adults who submitted an income tax return increased dramatically, having previously been less than 1%.

— The paper finds that in 2022-23, 22.6% of India’s national income went to just the top 1%, the highest level recorded in the data series since 1922 — this is higher than even during the inter-war colonial period.

— Between 1961 and 2023, the top 1% wealth share increased threefold, from 13% to 39%. Most of these gains came post-1991 after which point top 1% shares have been on a steep upward trend right until 2022-23. Hence, statement 1 and 2 are correct and statement 2 is the explanation of statement 1.

Therefore, option (a) is the correct answer.

2. (b)

FYI:

— There have been “paradoxical improvements” in labour market indicators such as the labour force participation rate, workforce participation rate, and unemployment rate in India in recent years after long-term deterioration from 2000-2019.

— The report, India Employment Report 2024 released by the Institute for Human Development and International Labour Organisation has flagged concerns about poor employment conditions such as

(a) The slow transition to non-farm employment has reversed;

(b) Women largely account for the increase in self-employment and unpaid family work;

(c) Youth employment is of poorer quality than employment for adults;

(d) Wages and earnings are stagnant or declining.

— The index is based on seven labour market outcome indicators:

(i) percentage of workers employed in regular formal work;

(ii) percentage of casual labourers;

(iii) percentage of self-employed workers below the poverty line;

(iv) work participation rate;

(v) average monthly earnings of casual labourers;

(vi) unemployment rate of secondary and above-educated youth;

(vii) youth not in employment and education or training.

— Self-employment remains the primary source of employment — 55.8% in 2022. Casual and regular employment accounted for 22.7% and 21.5% respectively. Hence, statement 1 is not correct.

— Almost 82% of the workforce is engaged in the informal sector, and nearly 90% is informally employed. Hence, statement 2 is correct.

— Regular employment is generally seen as providing better-quality jobs due to the regularity of employment and associated social security benefits, while casual work is linked with relatively poor-quality jobs due to its irregular nature and lower daily earnings.

— The female labour force participation rate (LFPR) in India remains among the world’s lowest. Female LFPR declined by 14.4 percentage points (compared to 8.1 percentage points for males) between 2000 and 2019. Hence, statement 3 is correct.

Therefore, option (b) is the correct answer.

3. (d)

FYI:

— The oil prices raised concerns of lower supply as major producers are keeping output cuts in place and on signs of stronger economic growth in the U.S., the world’s biggest oil consumer.

— Brent futures for June rose 31 cents, or 0.4%, to $89.66 a barrel at 0443 GMT. U.S. West Texas Intermediate (WTI) futures for May rose 30 cents, or 0.4%, to $85.73 a barrel.

— A meeting of top ministers from the Organization of Petroleum Exporting Countries and its allies (OPEC+) including Russia, kept oil supply policy unchanged and pressed some countries to boost compliance with output cuts.

Therefore, option (d) is the correct answer.

4. (b)

FYI:

— The Reserve Bank of India (RBI), which was established on April 1, 1935, is responsible for monetary stability, currency management, inflation targeting, regulating the banking system, and setting interest rates.

— The Reserve Bank of India was enacted in March 1934, and the provisions relating to the constitution of the bank, issue of share capital, and establishment of central and local boards became operative from January 1, 1935.

— The first Governor of the RBI was the Australian Sir Osborne Arkell Smith. Sir C D Deshmukh was the first Indian to become Governor.

— Following Partition, it was agreed that the RBI would cease to be the currency authority for Pakistan, and Indian notes would cease to be legal tender in Pakistan.

— The Monetary Policy Committee (MPC) which decides on interest rates started during the early phase of Patel’s tenure; he chaired the first meeting of the MPC on October 3 and 4, 2016.

— The Governor of the Reserve Bank of India acts as the Chairperson or ex officio of the MPC. 

Therefore, option (b) is the correct answer.

5. (c)

FYI:

— India is set to expand its presence for cross-border bill payments in the UK through the Bharat Bill Payment System (BBPS).

— The Bharat Bill Payment System is a RBI conceptualised system driven by National Payments Corporation of India (NPCI). Hence, statement 1 is correct.

— It acts as a one-stop ecosystem for payment of all bills with an interoperable and accessible. “Anytime Anywhere” Bill payment service. Hence, statement 2 is correct.

— A variety of bills including electricity, water, gas, telephone, DTH, and insurance can be paid through the system.

Therefore, option (c) is the correct answer.

Previous Daily Subject-Wise-Quiz

Daily subject-wise quiz — Polity and Governance (Week 52)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 52)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 52)

Daily subject-wise quiz — Economy (Week 51)

Daily subject-wise quiz – International Relations (Week 51)

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