Economics – Chapter-wise Mock Tests

Key Concepts: GDP (Market price & Factor cost), GNP, NNP, NDP, Personal Income, Disposable Income. Three methods: Product, Income, Expenditure. Real vs Nominal GDP; GDP Deflator.

Growth vs Development: Growth is quantitative increase in output; Development includes qualitative improvement (HDI, inequality, sustainability).

Important: Base year revisions, GVA at basic prices (current practice in India), limitations of GDP as welfare measure, Green GDP.

OPSC/UPSC focus: Recent GDP growth rates, sectoral contribution (Agriculture ~15–18%, Industry ~25–28%, Services ~55%), challenges in measurement of informal sector.

Money Supply: M0 (Reserve Money), M1, M2, M3 (broad money), M4. Money multiplier.

RBI Tools: Repo, Reverse Repo, Bank Rate, CRR, SLR, Open Market Operations, MSF, SDF. LAF corridor.

Inflation: Demand-pull, Cost-push, Structural. Measured by CPI (combined), WPI, CPI-Rural/Urban. Headline vs Core inflation. Phillips Curve (short-run trade-off).

Banking: Commercial banks, Priority Sector Lending, NPA, Basel norms, Payment banks, Small finance banks, Digital payments (UPI).

Current focus: Inflation targeting framework (4% ±2%), Monetary Policy Committee (MPC).

Budget Components: Revenue Receipts (Tax + Non-tax), Capital Receipts, Revenue Expenditure, Capital Expenditure. Revenue Deficit, Fiscal Deficit, Primary Deficit, Effective Revenue Deficit.

FRBM Act: Targets for fiscal deficit and debt; escape clauses. Recent amendments and glide path.

Taxation: Direct (Income tax, Corporate tax) vs Indirect (GST, Customs, Excise). Progressive, Proportional, Regressive. Laffer Curve.

GST: Destination-based, dual structure (CGST+SGST/IGST), GST Council, Compensation cess, Input Tax Credit.

Important: Crowding out, Automatic stabilisers, Counter-cyclical vs Pro-cyclical fiscal policy.

Balance of Payments: Current Account (Trade + Invisibles), Capital Account, Financial Account, Official Reserve transactions. CAD, Current Account Surplus.

Exchange Rate: Nominal, Real, NEER, REER. Fixed, Floating, Managed float. Rupee depreciation vs devaluation.

Capital Flows: FDI (stable, long-term) vs FPI (volatile). External Commercial Borrowings, NRI deposits.

Trade: Export-Import composition, Trade policy, WTO agreements, FTAs, Anti-dumping, Safeguard duties.

Reserves: Forex reserves composition (USD, Gold, SDRs), Import cover.

Poverty: Absolute vs Relative. Tendulkar, Rangarajan committees. Multidimensional Poverty Index (MPI – NITI Aayog / UNDP). Headcount ratio, Poverty gap.

Unemployment: Types – Structural, Frictional, Cyclical, Disguised, Seasonal, Educated. Labour Force Participation Rate, Worker Population Ratio, Usual Status / Current Weekly Status / Current Daily Status.

Inclusive Growth: Growth with equity, access to opportunities, social protection. HDI, GII, Inequality (Gini coefficient).

Schemes: MGNREGA, PM-KISAN, PMAY, Ayushman Bharat, Skill India, NRLM, etc.

Agriculture: Land reforms, Green Revolution (HYV, irrigation, fertilisers), Second Green Revolution, MSP & Procurement, APMC, e-NAM, Farm laws debate, Cropping patterns, Food security & PDS/NFSA.

Industry: Industrial Policy (1948, 1956, 1991), Public Sector, Disinvestment, MSMEs (definition & role), Make in India, PLI schemes, Start-up India.

Infrastructure: Physical (roads, ports, power, railways) & Social (health, education). PPP models, National Infrastructure Pipeline, Gati Shakti.