1. All of the following help explain China's deflation problem EXCEPT:
Answer: A. Deflation in China stems from soft spending, surplus goods, slower growth and trade pressure. Wages are not rising too fast; if anything, low pay curbs spending and deepens the problem.
2. Why is India wary of cutting tariffs in its trade talks with the US?
Answer: E. India might lower duties on selected items such as nuts, but it will hold back in sensitive areas like dairy to protect local producers. The WTO does not prohibit cuts; it only requires MFN compliance.
3. Which statement about US economic trends in Trump's second term is correct?
Answer: B. Falling bond yields hint at slower growth and a greater recession risk. The New York Fed's gauge shows growing worry, and US uncertainty is a headwind for India's IT industry.
4. A turnover above what level is proposed as the point at which businesses could face MDR on UPI payments?
Answer: D. The government is weighing the return of MDR for big merchants whose turnover exceeds ₹40 lakh. The idea is to help banks fund the running of UPI infrastructure.
5. Which reason lies behind the sluggish growth of CASA deposits at Indian banks?
Answer: B. As interest rates have gone up, people are moving money out of low-yield CASA accounts into higher-paying term deposits, so CASA grows more slowly.
6. Which country overtook Russia to become the world's second-biggest arms exporter?
Answer: E. SIPRI data show France moving past Russia into second place behind the US. Russian arms exports dropped by 64%.
7. What is one main purpose of using AI-based models to forecast inflation?
Answer: A. AI models, Large Language Models among them, sharpen inflation forecasts by working through live data. That supports more accurate predictions and better policy choices.
8. What accounts for the 9.3% fall in India's arms imports from 2020 to 2024?
Answer: D. India has put weight on building its own defence industry, so it relies less on foreign arms. That lowered imports by 9.3%.
9. What is the effect on India of the rupee weakening to 87.34 per USD?
Answer: C. A weaker rupee makes imported goods such as crude oil costlier and adds to inflation. The RBI can step in to calm volatility, but outflows by foreign investors hold back any recovery.
10. Economic Survey 2025 floated a "health tax" on which products?
Answer: A. The Survey proposed taxing ultra-processed foods to address rising obesity and diabetes. It drew on models such as Chile's "high-in" warning labels.
11. Under GATT Article 24.5, an interim agreement leading to an FTA should be completed within a reasonable period of at most:
Answer: C. A reasonable time frame is stated as 10 years at most.
12. India asked for more time, till which month of 2025, to negotiate the Bilateral Trade Agreement with the US?
Answer: B. India sought an extended timeline until September 2025 for the BTA.
13. By how much did China's consumer prices fall year-on-year in February, signalling deflation?
Answer: C. Prices fell 0.7% year-on-year, the first deflation in over a year.
14. Which body introduced the Indian Nutrition Rating (INR) front-of-pack labelling system in 2022?
Answer: B. The notes state FSSAI's Indian Nutrition Rating was introduced in 2022.
15. Which country was the world's largest importer of major arms in 2020-24 according to SIPRI?
Answer: B. Ukraine's imports rose about 100-fold versus 2015-19.