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Explore Economics Questions in UPSC Prelims 2025 with answers. Get insights on difficulty level, topic-wise trends, static vs current affairs mix, and detailed analysis of important questions from the Economy section of the UPSC Prelims exam.
PWOnlyIAS
May 29, 2025
Economics Questions in UPSC Prelims 2025: Economics is one of the core subjects in the UPSC Civil Services Preliminary Examination. The Economics Questions in UPSC Prelims 2025 continue to reflect the Union Public Service Commission’s emphasis on testing both static economic concepts and dynamic current affairs. This dual approach ensures that aspirants are not only well-versed in foundational theories but are also updated on the latest economic developments and policy changes.
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UPSC Prelims Question Paper & Answer Key 2025 |
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| UPSC Prelims Question Paper 2025 | Download Link |
| UPSC Prelims Answer Key 2025 | Download Link |
| UPSC Prelims Answer Key 2025 with Solution | Download Link |
Economy Questions in UPSC Prelims 2025 form an important component of the General Studies Paper I. These questions test both theoretical understanding and current awareness related to India’s economic landscape.
Aspirants must be well-versed with fundamental concepts like monetary policy, inflation, fiscal policy, and banking, while also staying updated on economic developments from the last 1–2 years. With around 14 questions that have appeared in the UPSC Prelims 2025, learning this section can significantly boost the chances of clearing the Prelims.
| Economics Questions in UPSC Prelims 2025 Overview | |
| Feature | Details |
| Exam Name | UPSC Civil Services Preliminary Examination 2025 |
| Subject | Economics / Indian Economy |
| Number of Questions | 14 |
| Focus Areas | Banking, Monetary Policy, Fiscal Policy, Inflation, Financial Markets |
| Type of Questions | Conceptual + Current Affairs-based |
| Difficulty Level | Easy to Moderate |
| Significance | High weightage, crucial for scoring and overall cutoff |
| Trend | Integration of static and dynamic topics is increasingly observed |
The UPSC Prelims Economics Questions & Answers 2025 section is an essential part of the Civil Services Examination preparation. Reviewing past economy questions along with their correct answers and detailed explanations helps aspirants understand the question pattern and strengthen conceptual clarity.
Here is the compilation of UPSC Prelims Economy Questions with Answers 2025, featuring detailed explanations and conceptual clarity:
1. With reference to investments, consider the following:
How many of the above are treated as Alternative Investment Funds?
(a) Only one
(b) Only two
(c) Only three
(d) All four
2. Which of the following are the sources of income for the Reserve Bank of India?
I. Buying and selling Government bonds
II. Buying and selling foreign currency
III. Pension fund management
IV. Lending to private companies
V. Printing and distributing currency notes
Select the correct answer using the code given below.
(a) I and II only
(b) II, III and IV
(c) I, III, IV and V
(d), II and V
3. Consider the following statements:
I. The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).
II. In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.
Which of the statements given above is/are correct?
(a) I only
(b) II only
(c) Both I and II
(d) Neither I nor II
4. Consider the following statements:
Statement I: In India, income from allied agricultural activities like poultry farming and wool rearing in rural areas is exempted from any tax.
Statement II: In India, rural agricultural land is not considered a capital asset under the provisions of the Income-tax Act, 1961.
Which one of the following is correct in respect of the above statements?
(a) Both Statement I and Statement II are correct and Statement II explains Statement I
(b) Both Statement I and Statement II are correct but Statement II does not explain Statement I
(c) Statement I is correct Statement II is not correct but
(d) Statement I is not correct but Statement II is correct
5. Consider the following statements:
Statement I: As regards returns from an investment in a company, generally, bondholders are considered to be relatively at lower risk than stockholders.
Statement II: Bondholders are lenders to a company whereas stockholders are its owners.
Statement III: For repayment purpose, bondholders are prioritized over stockholders by a company.
Which one of the following is correct in respect of the above statements?
(a) Both Statement II and Statement III are correct and both of them explain Statement I
(b) Both Statement I and Statement II are correct and Statement I explains Statement II
(c) Only one of the Statements II and III is correct and that explains Statement I
(d) Neither Statement II nor Statement III is correct
6. Consider the following statements:
I. India accounts for a very large portion of all equity option contracts traded globally thus exhibiting a great boom.
II. India’s stock market has grown rapidly in the recent past even overtaking Hong Kong’s at some point of time.
III. There is no regulatory body either to warn the small investors about the risks of options trading or to act on unregistered financial advisors in this regard.
Which of the statements given above are correct?
(a) I and Il only
(b) II and III only
(c) I and III only
(d) I, II and III
7. Consider the following statements:
Statement I: Circular economy reduces the emissions of greenhouse gases.
Statement II: Circular economy reduces the use of raw materials as inputs.
Statement III: Circular economy reduces wastage in the production process.
Which one of the following is correct in respect of the above statements?
(a) Both Statement II and Statement III are correct and both of them explain Statement I
(b) Both Statement II and Statement III are correct but only one of them explains Statement I
(c) Only one of the Statements II and III is correct and that explains Statement I
(d) Neither Statement II nor Statement III is correct
8. Consider the following statements:
I. Capital receipts create a liability or cause a reduction in the assets of the Government.
II.Borrowings and disinvestment are capital receipts.
III.Interest received on loans creates a liability of the Government.
Which of the statements given above are correct?
(a) I and II only
(b) II and III only
(c) I and III only
(d) I, II and III
9. Suppose the revenue expenditure is 80,000 crores and the revenue receipts of the Government are 60,000 crores. The Government budget also shows borrowings of 10,000 crores and interest payments of 6,000 crores. Which of the following statements are correct?
I. Revenue deficit is 20,000 crores.
II. Fiscal deficit is 10,000 crores.
III. Primary deficit is 4,000 crores.
Select the correct answer using the code given below.
(a) I and II only
(b) II and III only
(c) I and III only
(d) I, II and III
10. A country’s fiscal deficit stands at 50,000 crores. It is receiving 10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are 1,500 crores. What is the gross primary deficit?
(a) 48,500 crores
(b) 51,500 crores
(c) 58,500 crores
(d) None of the above
11. Consider the following statements in respect of the International Bank for Reconstruction and Development (IBRD):
I. It provides loans and guarantees to middle income countries.
II. It works single-handedly to help developing countries to reduce poverty.
III. It was established to help Europe rebuild after World War II.
Which of the statements given above are correct?
(a) I and II only
(b) II and III only
(c) I and III only
(d) I, II and III
12. Consider the following statements in respect of RTGS and NEFT:
I. In RTGS, the settlement time is instantaneous while in case of NEFT, it takes some time to settle payments.
II. In RTGS, the customer is charged for inward transactions while that is not the case for NEFT.
III. Operating hours for RTGS are restricted on certain days while this is not true for NEFT.
Which of the statements given above is/are correct?
(a) I only
(b) I and II
(b) I and III
(d) III only
13. Consider the following countries:
I. United Arab Emirates
II. France
III. Germany
IV. Singapore
V. Bangladesh
How many countries amongst the above are there other than India where international merchant payments are accepted under UPI?
(a) Only two
(b) Only three
(c) Only four
(d) All the five
14. Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
I. It has recommended grants of `4,800 crores from the year 2022-23 to the year 2025-26 for incentivizing States to enhance educational outcomes.
II. 45% of the net proceeds of Union taxes are to be shared with States.
III. `45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms.
IV. It reintroduced tax effort criteria to reward fiscal performance.
Select the correct answer using the code given below.
(a) I, II and III
(b) I, II and IV
(c) I, III and IV
(d) II, III and IV
The Economy Questions in UPSC Prelims 2025 continue by following a trend of integrating theoretical knowledge with real-world economic events. The pattern generally includes objective-type questions with a focus on analytical thinking and conceptual depth.
The Economics Questions in UPSC Prelims 2025 demonstrate an increasing integration of traditional economic theories with modern-day applications.
Understand the evolving pattern and nature of Economy Questions in UPSC Prelims 2025, to link current developments with foundational knowledge, including the balance between static and dynamic content, the influence of current affairs, and the types of questions frequently asked, ranging from conceptual clarity to application-based queries rooted in recent economic developments.
| Repeated Themes of Indian Economy Questions in UPSC Prelims | |
| Themes | Significance / PYQ Reflection |
| Banking and Monetary Policy | RBI’s functions, LAF, NBFC regulations, and foreign banking norms are common topics. |
| Government Securities & Financial Markets | Questions on G-Secs, ETFs, corporate bonds, FIIs/FPIs, and trading platforms are frequently asked. |
| Digital Economy and Currency | Topics such as CBDC, Digital Rupee, and fintech innovations have gained prominence. |
| Corporate Governance & CSR | Queries on CSR provisions and governance models continue to be relevant. |
| Land Reforms and Modernisation Schemes | Schemes like DILRMP and digital land record accessibility features regularly. |
| Capital – Fixed vs Working | Matching examples to their capital classification is a commonly tested concept. |
| Sectors of the Economy | Classification-based questions involving primary, secondary, and tertiary sectors are frequent. |
| Financial Instruments and Concepts | Understanding ETFs, derivatives, and identifying financial instruments is crucial. |
| Loan Structures and Lending Mechanisms | Knowledge of credit lines, syndicated loans, and risk-sharing frameworks is tested. |
| External Sector and Currency | Concepts like BoP, forex reserves, and currency swaps are often examined. |
A review of the past ten years reveals that the Economy consistently holds a significant share in the UPSC Preliminary Examination. With questions spanning static concepts and current economic developments, the trend reflects UPSC’s emphasis on economic literacy. Here is an outline of Economy Questions in UPSC Prelims over the last decade:
| Trend Analysis of Economy Questions in UPSC Prelims | |
| Year | Number of Economy Questions |
| 2024 | 12 |
| 2023 | 13 |
| 2022 | 12 |
| 2021 | 14 |
| 2020 | 19 |
From this data, it is clear that Economics Questions in UPSC Prelims 2025 are likely to fall within the range of 12 to 20 questions every year. This makes economics one of the most heavily weighted subjects in the GS Paper I.
The Economics Questions in UPSC Prelims 2025 are designed not only to test conceptual clarity but also to examine a candidate’s ability to correlate current events with economic theory. The questions span both static and dynamic sections of the Indian economy. Given the ongoing changes in global and national economies, the UPSC emphasises analysing fiscal and monetary policies, inflation trends, financial markets, and international agreements.
The Economy Questions in UPSC Prelims 2025 are expected to continue reflecting themes from the last two years. As the economy evolves, so do the dimensions of questions asked. These often include aspects such as the Reserve Bank of India’s role, types of financial instruments, and government initiatives on financial inclusion and digital currency.
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