Daily Prelims MCQs — Economy — 23rd July 2025
- TPP
- Jul 23
- 8 min read
Updated: Jul 24
Welcome to today’s handpicked set of Multiple-Choice Questions (MCQs) from the Economy — crafted specially for the UPSC Prelims! These questions aren’t just a quiz — they’re a smart way to see how current affairs connect with core concepts, just like UPSC asks in the exam.
Each question is based on recent news and backed by clear explanations to help you build strong links between dynamic events and static knowledge.
Today’s topics include: Periodic Labour Force Survey (PLFS), LFPR, SAGAR-SETU, Harit Sagar, Sagar Manthan, National Logistics Portal, Ease of Doing Business, Green Port Guidelines – 2023, Zero Tillage, PM-KISAN, HTBt cotton, GST and more...
Click Here to read the Monthly Current Affairs Pointers (CAP).
QUESTION 1
Consider the following statements:
Statement 1: When prices begin to decline, consumers often delay their purchases, expecting to buy the same product at a lower cost in the future.
Statement 2: This kind of consumer behaviour causes prices to rise, which reduces the gap between supply and demand.
Which one of the following options is correct in the context 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, but Statement 2 is not the correct explanation for Statement 1.
(c) Statement 1 is correct, but Statement 2 is incorrect.
(d) Statement 1 is incorrect, but Statement 2 is correct.
Answer (c)
Explanation:
In the aftermath of the COVID-19 pandemic, China has witnessed weak domestic consumption. A key contributor to this has been the sharp decline in its property market. The downfall of Evergrande, once the world’s most valuable real estate company, highlighted the scale of the crisis.
Since a large portion of household wealth in China was tied to real estate, the drop in property values led to a loss in consumer confidence. This, in turn, resulted in reduced demand for goods and services, affecting the country’s overall economic momentum.
Adding to this is the pressure of deflation, a condition where prices fall continuously over time. Unlike inflation, deflation is harmful to economic growth. When prices start falling, people often delay spending in hopes of getting better deals later. This postponement (as described in Statement 1) leads to further reduction in demand, which causes prices to drop even more as supply outpaces demand. Therefore, Statement 1 is correct.
However, Statement 2 claims that this behaviour causes prices to rise and the gap between supply and demand to decrease, which is the opposite of what actually happens in a deflationary environment. Hence, Statement 2 is incorrect.
QUESTION 2
The Periodic Labour Force Survey (PLFS) has been designed to provide estimates of which of the following indicators?
Worker Population Ratio (WPR)
Labour Force Participation Rate (LFPR)
Unemployment Rate (UR)
Select the correct option using the codes below:
(a) 1 and 2 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Answer (d)
Explanation:
India’s labour market experienced seasonal fluctuations in June, with the unemployment rate (UR) holding steady at 5.6%. However, the Labour Force Participation Rate (LFPR) saw a dip, sliding from 54.8% in May to 54.2% in June, suggesting that fewer individuals were actively seeking employment that month.
According to the latest Monthly PLFS bulletin released by the Ministry of Statistics and Programme Implementation, the unemployment rate among people aged 15 years and above remained unchanged overall, though there was a slight decrease for females—from 5.8% in May to 5.6% in June—while the rate for males stayed constant at 5.6%.
The main objectives of the PLFS are:
To generate estimates for key labour market indicators such as the Worker Population Ratio (WPR), Labour Force Participation Rate (LFPR), and Unemployment Rate (UR) for urban areas using the Current Weekly Status (CWS) approach, with data released quarterly.
To provide annual estimates of employment and unemployment indicators in both rural and urban areas, based on both the Usual Status (principal status + subsidiary status) and CWS approaches.
Therefore, all three indicators—WPR, LFPR, and UR—are part of the PLFS’s scope, making option (d) the correct choice.
QUESTION 3
Consider the following statements about India’s electricity generation capacity:
As of June 2025, more than 50% of India’s installed power generation capacity comes from non-fossil fuel sources.
In 2024, India held the number one position globally in terms of installed renewable energy capacity.
Among the non-fossil fuel sources, nuclear energy contributes the largest share to electricity production.
How many of the above statements are correct?
(a) Only one
(b) Only two
(c) All three
(d) None
Answer (a)
Explanation:
Statement 1 is correct: By June 30, 2025, India achieved a major climate goal well ahead of schedule. Non-fossil fuel sources (including solar, wind, small hydro, biomass, large hydro, and nuclear) contributed 50.1% of the total installed electricity capacity, surpassing the 50% mark that was originally targeted for 2030. This marks significant progress compared to 30% in 2015 and 38% in 2020, largely due to accelerated deployment of solar and wind energy in recent years.
Statement 2 is incorrect: In 2024, India ranked fourth in the world in terms of total installed renewable energy capacity (including large hydro), following China, the United States, and Brazil.
Statement 3 is incorrect: Within the non-fossil category, nuclear energy accounted for only 9 GW of capacity, which is far less than the contributions from renewables (185 GW) and large hydro (49 GW). Therefore, nuclear is not the leading source among non-fossil options.
QUESTION 4
Match the following initiatives with their respective objectives:
Initiative | Objective |
1. SAGAR-SETU | A mobile platform intended to enhance Ease of Doing Business |
2. Harit Sagar | Aimed at contributing toward achieving the goal of Zero Carbon Emissions |
3. Sagar Manthan | A mission launched to boost fish production in the country |
How many of the above pairs are correctly matched?
(a) Only one pair
(b) Only two pairs
(c) All three pairs
(d) None of the above pairs
Answer (b)
Explanation:
Pair 1 is Correct: The SAGAR-SETU mobile application has been developed under the National Logistics Portal, focusing on improving the Ease of Doing Business. It facilitates real-time tracking of port operations and offers seamless access to data related to vessels, cargo, containers, finance, and various regulatory services—aimed at improving user experience in port-related services.
Pair 2 is Correct: The Ministry of Ports, Shipping and Waterways introduced the ‘Harit Sagar’ Green Port Guidelines – 2023, which aim to align port operations with the broader goal of achieving Zero Carbon Emissions. These guidelines emphasize environmental sustainability through the ‘Working with Nature’ approach, minimizing ecological disruption during port construction and functioning.
Pair 3 is Incorrect: Contrary to what the name may suggest, Sagar Manthan is not related to fish production. It is a real-time performance monitoring dashboard launched by the Ministry of Ports, Shipping and Waterways. This digital platform provides detailed information on key indicators, progress tracking of projects, financial performance, and supports the Maritime India Vision 2030.
QUESTION 5
Consider the following statements regarding the practice of Zero Tillage in agriculture:
Zero tillage refers to cultivating crops without disturbing the natural layers of soil.
This method leads to greater soil erosion and reduces the soil's ability to retain water.
Which of the above statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer (a)
Explanation:
Statement 1 is correct: Zero tillage, also referred to as no-till farming, involves planting crops directly into the soil without using conventional ploughing or soil-turning methods. By avoiding disruption of soil strata, this technique helps preserve the natural structure of the soil and improves overall soil health.
Statement 2 is incorrect: Far from causing harm, zero tillage actually offers multiple environmental benefits. It helps in reducing soil erosion and improves the soil’s water-holding capacity. Since the soil is not disturbed, moisture is conserved more effectively, and organic matter builds up, enhancing fertility.
In practice, this method uses specialised seeders that place seeds into narrow furrows with minimal soil disturbance, enabling efficient crop growth while protecting the ecosystem.
QUESTION 6
Consider the following statements about the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Yojana:
It is a Centrally Sponsored Scheme designed to support farmers financially for both agricultural inputs and household requirements.
The scheme offers income assistance in three equal installments exclusively to small and marginal landholding farmer families.
Which of the above statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer (d)
Explanation:
Statement 1 is incorrect: The PM-KISAN scheme is classified as a Central Sector Scheme, which means it is fully funded by the Government of India and not jointly funded by states (as in Centrally Sponsored Schemes). The program aims to meet the financial needs of landholding farmers for both agricultural and domestic purposes.
Statement 2 is also incorrect: Initially launched for small and marginal farmers, the scheme was later expanded to cover all landholding farmer families, regardless of the size of their landholding. Under this scheme, ₹6,000 per year is transferred in three equal installments of ₹2,000 directly into the beneficiaries' bank accounts.
QUESTION 7
Consider the following statements about HTBt cotton in the Indian context:
It has been officially cleared for commercial cultivation across the country.
The herbicide-tolerant (HT) gene enables cotton plants to survive the application of glyphosate, a widely used weed killer.
This genetically modified variant has been developed by Indian public sector research institutions.
How many of the above statements are not correct?
(a) Only one
(b) Only two
(c) All three
(d) None
Answer (b)
Explanation:
Statement 1 is not correct: HTBt cotton has not received approval for commercial cultivation in India. Although it is in use in some regions, this is happening through unauthorised and illegal circulation of the seeds, which have not been cleared by the Genetic Engineering Appraisal Committee (GEAC) or the Ministry of Environment, Forest and Climate Change.
Statement 2 is correct: The HT (Herbicide-Tolerant) trait allows the cotton plant to withstand glyphosate, a commonly used herbicide, which helps in managing weed growth effectively. This trait makes weed control simpler and less labour-intensive for farmers.
Statement 3 is not correct: HTBt cotton has been developed by private companies, not by public sector research bodies in India. Despite the lack of official approval, it continues to be illegally produced, sold, and cultivated in some parts of the country.
The government has laid out penalties, including fines and imprisonment, for those involved in the cultivation, production, or distribution of unauthorised genetically modified (GM) crops like HTBt cotton.
QUESTION 8
Under the Goods and Services Tax (GST) framework, which among the following are categorised under the 12% tax bracket?
Pre-packaged food products such as condensed milk, dry fruits like nuts and dates, processed meat items like sausages, and beverages including fruit juices
Common household articles like cotton and jute bags, certain kinds of furniture, sewing equipment like machines, and specific textile-related goods
Healthcare-related items such as medical oxygen, surgical gauze, bandaging material, and diagnostic tools
High-end commodities and services, including tobacco-based products
Choose the correct option:
(a) 1, 2 and 3 only
(b) 1, 3 and 4 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4
Answer (a)
Explanation:
Items listed in statements 1, 2, and 3 are included under the 12% GST category. This includes a range of processed food items, household goods, and certain medical supplies. On the other hand, luxury goods and services, including tobacco-related products, do not fall under this slab—they are classified under the 28% GST slab, making statement 4 incorrect.
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