UPSC Essentials | Daily subject-wise quiz : Economy MCQs on Crude Oil import by India, Gold-ETF, ASI and more (Week 78)

1. Decrease in export

2. Increase in import

3. Change of trade route

4. Increase in petroleum export

Select the correct answer using the codes given below:

(a) 1, 3 and 4

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2, 3 and 4

Explanation

— As the conflict in West Asia enters a new and unstable phase, with Iran launching a barrage of missiles on Israel overnight, both global and Indian traders are bracing for a prolonged disruption in trade.

— A major escalation of the year-long conflict in West Asia has emerged after Israel, having seemingly concluded its military operation against Hamas in Gaza, shifted its focus to the larger and more powerful Iranian proxy, Hezbollah, by launching a military operation in Lebanon.

— The escalation of the conflict has heightened the potential of commercial interruptions, as Hezbollah has close relations to the Houthi rebels in Yemen, who are responsible for the majority of attacks on ships travelling the Red Sea route.

— Exporters have long dreaded a direct battle between Israel and Iran, which would result in a prolonged disruption of the critical Red Sea shipping route. The escalation of warfare comes as Indian exporters begin to feel the brunt of the Red Sea shipping route problem, with exports plummeting by up to 9% in August. Hence, 1 is correct and 2 is not correct.

— India’s petroleum exports fell 38% in August due to the Red Sea situation, as dwindling margins and increased transportation costs forced importers to seek alternate suppliers. Hence, 4 is not correct.

— According to data shared by the International Monetary Fund (IMF), the volume of trade passing through the Suez Canal fell by 50% year on year in the first two months of the year, while the volume of trade transiting around the Cape of Good Hope increased by an estimated 74% over last year’s levels. Hence, 3 is correct.

Therefore, option (c) is the correct answer.

QUESTION 2

Consider the following countries:

1. Iraq

2. Saudi Arabia

3. Russia

What is the correct order of countries given above (from top to bottom) in terms of the import of crude oil by India as of September, 2024?

(a) 3—1—2

(b) 1—3—2

(c) 2—3—1

(d) 1—2—3

Explanation

— India’s crude oil imports recovered sequentially in September as a few under-maintenance refineries are slated to come back on stream in October. Notably, the sequential recovery in import volumes was led by Saudi Arabia, which has reduced its prices in a bid to claw back some of its lost market share in India, according to ship tracking data and industry watchers.

— India’s import of Russian crude rose 6.4 per cent over August to 1.88 million bpd, accounting for a staggering 40.2 per cent of New Delhi’s overall crude oil imports of 4.68 million bpd in September, which were 5 per cent higher sequentially.

— Iraq, India’s second-largest crude oil source market, delivered 0.87 million barrels per day in September, accounting for 18.7% of New Delhi’s total oil imports. Saudi Arabia increased its market share to 15.5% in September, from 11.7% in August.

— India, the world’s third-largest crude oil user, is very vulnerable to oil prices due to its huge import dependency of more than 85 per cent.

— India’s oil imports from its fourth-largest source, the United Arab Emirates, increased 18.6 percent month on month to 0.49 million bpd in September, the highest level since June 2022.

— The correct order of countries (top to bottom) is Russia-Iraq-Saudi Arabia.

Therefore, option (a) is the correct answer.

QUESTION 3

With reference to the Annual Survey of Industries (ASI) for 2022-23, consider the following statements:

1. It is released by the Ministry of Statistics and Programme Implementation (MoSPI).

2. The highest employment was recorded in factories producing basic metals.

3. The number of workers employed in the informal sector in 2022-23 had increased as compared to in 2015-16.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Explanation

— The Annual Survey of Industries (ASI) for 2022-23, released by the Ministry of Statistics and Programme Implementation (MoSPI), showed that the total number of employees in manufacturing industries increased by 7.5 per cent to 1.84 crore in 2022-23 from 1.72 crore in 2021-22. Hence, statement 1 is correct.

— This is the highest rate of increase in employment in manufacturing industries in the last 12 years.

— According to the most recent ASI data, industries manufacturing food goods employed the most people, followed by textiles, basic metals, clothes, motor vehicles, trailers, and semi-trailers. Hence, statement 2 is not correct.

— According to the report, the total number of factories climbed from 2.49 lakh in 2021-22 to 2.53 lakh in 2022-23, the first year of full recovery following the Covid-19 epidemic.

— In comparison, the number of workers employed in the informal sector in 2022-23 fell by 16.45 lakh, or 1.5 per cent, to 10.96 crore from 11.13 crore in 2015-16, according to the Annual Survey of Unincorporated Enterprises (ASUSE) 2022-23, issued in July this year. Hence, statement 3 is not correct.

Therefore, option (a) is the correct answer.

QUESTION 4

With reference to the Monetary Policy Committee, consider the following statements:

1. The primary objective of the RBI’s monetary policy is to maintain price stability while keeping in mind the objective of growth.

2. The MPC is required to meet at least four times a year.

3. The Governor of the Reserve Bank of India acts as Chairperson or ex officio of the committee.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 1 only

(d) 1, 2 and 3

Explanation

— The central government reconstituted the Monetary Policy Committee (MPC) ahead of the monetary policy review of the Reserve Bank of India (RBI).

— Section 45ZB of the modified RBI Act of 1934 establishes an empowered six-member monetary policy committee (MPC) to be appointed by the Central Government via announcement in the Official Gazette.

— The primary goal of monetary policy is to maintain price stability while also promoting growth.” Hence, statement 1 is correct.

— The present MPC members, as notified by the Central Government in the Official Gazette of October 5, 2020, are as under:

— Governor of the Reserve Bank of India—Chairperson, ex officio; Hence, statement 3 is correct.

— Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy—Member, ex officio;

— One officer of the Reserve Bank of India to be nominated by the Central Board—Member, ex officio;

— Three other members having knowledge of economy will hold office for a period of four years or until further orders, whichever is earlier.

— The MPC calculates the policy repo rate needed to meet the inflation objective.

— The MPC is required to meet at least four times per year. The MPC meets with a quorum of four members. Hence, statement 2 is correct.

— Each MPC member has one vote, and if there are equal votes, the Governor has a second or casting vote.

Therefore, option (d) is the correct answer.

(Other Source: rbi.org.in)

QUESTION 5

Consider the following statements about the Gold Exchange-Traded Funds (ETF):

1. These are units representing physical gold present both in paper or dematerialised form.

2. One Gold ETF unit is equal to 100 grams of gold.

3. SEBI regulates the gold exchange-traded funds.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1, 2 and 3

(d) 1 and 3 only

Explanation

— Gold exchange-traded funds (ETFs) attracted Rs 1,028 crore in August, making it the highest inflow in 16 months, amid continued hikes in interest rates in the US, which led to a slowing down in growth rate there.

— Gold ETFs are units representing physical gold which may be in paper or dematerialised form. Hence, statement 1 is correct.

— One Gold ETF unit is equal to 1 gram of gold and is backed by physical gold of very high purity. They combine the flexibility of stock investments and the simplicity of gold investments. Hence, statement 2 is not correct.

— Gold ETF schemes can only invest primarily in gold or gold-related products that have been approved by SEBI. Hence, statement 3 is correct.

Therefore, option (d) is the correct answer.

Previous Daily Subject-Wise-Quiz

Daily subject-wise quiz — Polity and Governance (Week 78)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 78)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 78)

Daily subject-wise quiz — Economy (Week 77)

Daily subject-wise quiz – International Relations (Week 77)

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