UPSC Prelims Practice Questions — a hundred years ago October 30, 1926

Q1. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. In 1926, Indian millowners reported that a fall in raw cotton prices had come along with a depression in their industry instead of relieving it.
  2. In a largely agrarian economy, a fall in crop prices cuts cultivators' incomes, and cultivators form a major part of the market for mill-made cloth.
  • 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, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q2. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. In 1926, a sharp fall in American cotton prices passed into the Indian market and was cited by Indian millowners as a factor in their industry's depression.
  2. The 1926 fall in American cotton prices was caused by a shortfall in the American cotton crop.
  • 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, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q3. With reference to duties on cotton goods in colonial India in the late nineteenth century, consider the following statements: Which of the statements given above are correct?

  1. The abolition of the cotton import duty in 1879 made Lancashire cloth cheaper in the Indian market.
  2. Import duties on cotton goods were brought back in 1894 chiefly to shield Indian mills from Lancashire competition.
  3. An import duty on cloth, levied with no matching tax on Indian mill cloth, would give Indian mills a price advantage over imported cloth.
  4. By 1894 a fall in the value of silver had pushed the Government of India to seek more rupee revenue.
  • A. 1, 2, 3 and 4
  • B. 1, 3 and 4 only
  • C. 1, 2 and 4 only
  • D. 2, 3 and 4 only

Q4. Consider the following facts reported in 1926: a bumper American cotton crop caused a sharp fall in American cotton prices; Indian cotton mills were reported to be in depression; and the textile industries of America and Japan were reported to be making profits. Which of the following inferences can be drawn from the above?

  1. The fall in world cotton prices cannot by itself account for the depression in Indian mills.
  2. The fall in American cotton prices arose from a decline in world demand for cotton cloth.
  3. Indian mills were working with older machinery than Japanese mills.
  • A. 1 only
  • B. 3 only
  • C. 1 and 2 only
  • D. 2 only

Q5. Consider the following assertion: 'The difficulties of Indian cotton mills in 1926 arose partly from weak demand within India.' The following points were part of the millowners' testimony before the Tariff Board (Cotton Textile) in 1926. Which of these points support/supports the above assertion?

  1. Indian mills could now buy raw cotton more cheaply because cotton prices had fallen.
  2. Cloth merchants in India had lost confidence in the market.
  3. The purchasing power of Indian agriculturists had fallen.
  4. The situation had worsened sharply only in the two or three weeks before the hearing.
  • A. 3 and 4 only
  • B. 1, 2 and 3 only
  • C. 2 and 3 only
  • D. 1 and 2 only

Q6. Suppose that in the 1930s the Indian market for cotton piece-goods were governed strictly by the Ottawa principle of imperial preference. Other things being equal, which of the following suppliers would face the least favourable tariff treatment in that market?

  • A. Cotton mills located in Bombay, in India
  • B. Cotton mills located in a British dominion such as Canada
  • C. Cotton mills located in Lancashire, in Britain
  • D. Cotton mills located in Osaka, in Japan

Q7. In the Great Depression, world prices of commodities such as cotton, silk and rubber roughly halved between 1929 and 1930. In this context, consider the following statements: Which of the statements given above is/are correct?

  1. In Japan, the depression showed up mainly as a collapse in production while prices stayed largely stable.
  2. A colony that relied on exporting such primary goods would see its export earnings fall sharply.
  3. A steep fall in farm prices makes loans fixed in money terms easier for cultivators to repay.
  • A. 2 and 3 only
  • B. 2 only
  • C. 1 only
  • D. 1 and 3 only