UPSC Essentials | Daily subject-wise quiz : Economy MCQs on Light Water Reactors, crude oil and more (Week 146)

3. They use natural uranium instead of enriched uranium as fuel.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Relevance: This question tests core concepts of nuclear reactor technology, fuel types, and moderator–coolant systems. UPSC often frames MCQs from reactor classifications and global nuclear capacity trends.

Explanation

— Light Water Reactors form a mainstay of the global n-program; these use light water, enriched uranium, and have simpler design, lower construction cost, economies of scale, and high thermal efficiency.

— LWRs currently account for over 85% of the civil nuclear reactor capacity in the world. Hence, statement 2 is correct.

— Because LWRs employ normal water as both a coolant and a moderator, their design and engineering are simpler than those of heavy water reactors. Hence, statement 1 is correct.

— LWRs use ordinary water, and they need enriched uranium as fuel, whereas PHWRs are regarded for fuel versatility and the potential to run on natural uranium. Hence, statement 3 is not correct.

Therefore, option (b) is the correct answer.

QUESTION 2

With reference to crude oil, consider the following statements:

1. Crude oil is exactly a fungible commodity.

2. An increase in crude oil prices always leads to an improvement in India’s current account balance.

3. Venezuelan crude is classified as a heavy sour crude because of its high sulphur content.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Relevance: Crude oil is crucial due to its impact on India’s CAD, inflation, fiscal balance, and energy security, and its linkage with global geopolitics and OPEC decisions. UPSC frequently tests technical concepts and economic implications through trap-based MCQs.

Explanation

— The bulk of Venezuelan crude is classified as a heavy sour crude—heavy because it is thicker and denser than the lighter crude oil grades, and sour because of its high sulphur content. Hence, statement 3 is correct.

— Crude oil is not exactly a fungible commodity in practice because of the differences in quality of various types or grades of oil. Hence, statement 1 is not correct.

— An increase in crude oil prices does not always lead to an improvement in India’s current account balance. Hence, statement 2 is not correct.

Therefore, option (a) is the correct answer.

QUESTION 3

With reference to the Indian rupee, consider the following statements:

1. A strong balance of payments position supports the stability of the rupee.

2. External factors, such as the performance of the US dollar, do not affect the value of the Indian rupee.

3. A depreciation of the Indian rupee always improves India’s trade balance.

Which of the statements given above is/are correct?

(a) 1 and 3 only

(b) 1 and 2 only

(c) 1, 2 and 3

(d) 1 only

Relevance: This question tests understanding of exchange rate determinants, BoP, and global linkages of the Indian rupee, which are core areas in the Indian Economy.

Explanation

— Current account transactions primarily include the export and import of commodities and services. A good balance of payments situation helps the currency remain stable. Hence, statement 1 is correct.

— In terms of merchandise trade, India has always been a net importer. In 2023-24, its merchandise exports were $441.48 billion, far less than imports of $683.55 billion, resulting in a $242.07 billion trade imbalance.

— A free fall in the rupee’s value is primarily prevented by interventions from the Reserve Bank of India (RBI).

— External factors, such as the performance of the US dollar, also affect the value of the Indian rupee. Hence, statement 2 is not correct.

— A depreciation of the Indian rupee does not always improves India’s trade balance. Hence, statement 3 is not correct.

Therefore, option (d) is the correct answer.

QUESTION 4

With reference to the India-EU trade, consider the following statements:

1. The EU is India’s second-largest trading partner in 2024.

2. Trade in goods between the EU and India has increased by almost 90% in the last decade.

3. India enjoys a consistent and large trade surplus with the European Union in the last decade.

Which of the statements given above is/are correct?

(a) 2 only

(b) 1 and 3 only

(c) 1 and 2 only

(d) 2 and 3 only

Relevance: This question tests knowledge of India’s major trading partners, trade trends, and external sector dynamics, which are core areas in the Indian Economy.

Explanation

— The EU is India’s second-largest commercial partner, accounting for goods worth €120 billion in 2024, or 11.5% of overall trade. India is the EU’s ninth largest trading partner, accounting for 2.4% of total EU trade in goods in 2024, well behind the United States (17.3%), China (14.6%), and the United Kingdom (10.1%). Over the previous decade, trade between the EU and India has surged by about 90%. Hence, statements 1 and 2 are correct.

— The EU’s biggest imports from India are machinery and appliances, chemicals, basic metals, mineral goods, and textiles. The EU’s biggest exports to India are machinery and appliances, transportation equipment, and chemicals.

— India now maintain a surplus. Since 2020, India has constantly had a trade surplus with the EU. Prior to 2020, India ran a trade deficit in 2018, where India’s exports were ~€40 billion while imports were ~€41 billion, resulting in a trade deficit. Hence, statement 3 is not correct.

Therefore, option (c) is the correct answer.

QUESTION 5

Which of the following sectors fall within the scope of the Carbon Border Adjustment Mechanism (CBAM)?

1. Iron and Steel

2. Fertilisers

3. Electricity and Hydrogen

4. Cement

Select the correct answer using the codes given below:

(a) 1 and 4 only

(b) 1, 2 and 4

(c) 2, 3 and 4

(d) 1, 2, 3 and 4

Relevance: CBAM is important due to its direct impact on Indian exports and climate–trade linkage, a key current affairs topic. UPSC often frames sector-identification and policy-impact based MCQs from such international mechanisms.

Explanation

— The Carbon Border Adjustment Mechanism (CBAM) is the EU’s instrument for putting a fair price on carbon emissions from the manufacture of carbon-intensive commodities entering the EU, as well as encouraging cleaner industrial output in non-EU nations.

— CBAM came into effect in its final form in January 2026, after a transition period from 2023 to 2025. This progressive implementation is consistent with the phase-out of free allowances under the EU Emissions Trading System (ETS) to encourage the decarbonisation of EU industry.

— CBAM will first apply to imports of certain items and selected precursors whose manufacturing is carbon-intensive and poses the greatest danger of carbon leakage: cement, iron and steel, aluminium, fertilisers, power, and hydrogen.

Therefore, option (d) is the correct answer.

(Source: taxation-customs.ec.europa.eu)

Previous Daily Subject-Wise-Quiz

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 141)

Daily subject-wise quiz — Polity and Governance (Week 146)

Daily subject-wise quiz —  Science and Technology (Week 146)

Daily subject-wise quiz — Economy (Week 145)

Daily subject-wise quiz — Environment and Geography (Week 145)

Daily subject-wise quiz – International Relations (Week 145)

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