Economy MCQs for UPSC Prelims — April 2026
Q1. The following are described as measures forming part of the Federal Reserve's pandemic-era (2020) monetary response under Powell EXCEPT one. Consider:
1. Cutting the federal funds rate to near zero in March 2020.
2. Purchasing Treasury securities and mortgage-backed securities.
3. Purchasing municipal bonds and corporate debt through emergency lending programmes.
4. Raising the federal funds rate ten times to shrink the balance sheet in 2020.
Which of the above is/are NOT correct?
- Cutting the federal funds rate to near zero in March 2020.
- Purchasing Treasury securities and mortgage-backed securities.
- Purchasing municipal bonds and corporate debt through emergency lending programmes.
- Raising the federal funds rate ten times to shrink the balance sheet in 2020.
- A. 1 only
- B. 4 only
- C. 2 and 3
- D. 1 and 4
Q2. With reference to the friction between President Trump and Chair Powell over Federal Reserve independence, consider the following statements:
1. Trump repeatedly criticised Powell over the Federal Reserve's interest-rate decisions.
2. Powell asserted that the President is not permitted under law to fire or demote him.
3. Powell said the outcome of the 2024 presidential election would have 'no effect' on near-term rate decisions.
4. Powell resigned as Chair immediately after Trump's 2024 election victory.
Which of the above is/are correctly identified?
- Trump repeatedly criticised Powell over the Federal Reserve's interest-rate decisions.
- Powell asserted that the President is not permitted under law to fire or demote him.
- Powell said the outcome of the 2024 presidential election would have 'no effect' on near-term rate decisions.
- Powell resigned as Chair immediately after Trump's 2024 election victory.
- A. 1, 2 and 3
- B. 1, 2 and 4
- C. 2, 3 and 4
- D. 1, 3 and 4
Q3. The criminal investigation into Jerome Powell opened in January 2026 was centred on which of the following?
- A. His congressional testimony about the scope and costs of the Federal Reserve headquarters renovation
- B. Alleged insider trading based on advance knowledge of FOMC rate decisions
- C. Losses incurred on the Federal Reserve's balance sheet during rate hikes
- D. A conflict of interest in the Fed's supervision of commercial banks
Q4. By what vote margin did the United States Senate confirm Kevin Warsh as Chair of the Federal Reserve in 2026?
- A. 54–45
- B. 60–40
- C. 68–31
- D. 50–49
Q5. In the context of the 2026 Federal Reserve leadership transition, the term 'chair pro tempore' most precisely refers to which of the following?
- A. A temporary chair who leads the Board only until a confirmed successor is sworn in
- B. A deputy who permanently chairs the FOMC whenever the Chair is absent
- C. The senior-most regional Reserve Bank president automatically acting as Chair
- D. An honorary lifetime title conferred on a retired Federal Reserve Chair
Q6. Who was the first woman to serve as Chair of the U.S. Federal Reserve?
- A. Janet Yellen
- B. Alice Rivlin
- C. Christine Lagarde
- D. Esther George
Q7. The six-member Monetary Policy Committee of the Reserve Bank of India derives its statutory basis from which of the following?
- A. Section 45ZB of the Reserve Bank of India Act, 1934
- B. Section 45ZB of the Banking Regulation Act, 1949
- C. Section 45ZB of the Reserve Bank of India Act, 1935
- D. Section 45ZB of the Foreign Exchange Management Act, 1999
Q8. Consider the following statements comparing the U.S. Federal Reserve and the Reserve Bank of India:
1. The Governor of the RBI is appointed by the Central Government, whereas the Chair of the U.S. Federal Reserve is nominated by the President and confirmed by the Senate.
2. Members of the RBI's central board are appointed for four-year terms, while members of the Federal Reserve's Board of Governors serve 14-year terms.
3. The RBI's Monetary Policy Committee has the same number of members as the Federal Reserve's Federal Open Market Committee.
Which of the statements given above is/are correct?
- The Governor of the RBI is appointed by the Central Government, whereas the Chair of the U.S. Federal Reserve is nominated by the President and confirmed by the Senate.
- Members of the RBI's central board are appointed for four-year terms, while members of the Federal Reserve's Board of Governors serve 14-year terms.
- The RBI's Monetary Policy Committee has the same number of members as the Federal Reserve's Federal Open Market Committee.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q9. With reference to the governance structure of the U.S. Federal Reserve, consider the following statements:
1. The Board of Governors has seven members, each appointed for a 14-year term.
2. The Chair of the Board of Governors is appointed for a 14-year term.
3. The Federal Open Market Committee has twelve members.
4. Governors of the Federal Reserve are nominated by the President and confirmed by the House of Representatives.
Which of the above is/are correctly identified?
- The Board of Governors has seven members, each appointed for a 14-year term.
- The Chair of the Board of Governors is appointed for a 14-year term.
- The Federal Open Market Committee has twelve members.
- Governors of the Federal Reserve are nominated by the President and confirmed by the House of Representatives.
- A. 1 and 3
- B. 2 and 4
- C. 1, 2 and 4
- D. 3 only
Q10. The Federal Reserve System, the central bank of the United States, was established under which of the following?
- A. The Federal Reserve Act, 1913
- B. The Glass-Steagall Act, 1933
- C. The Dodd-Frank Act, 2010
- D. The Federal Reserve Act, 1935
Q11. The appointment of a nominee as Chair of the U.S. Federal Reserve becomes effective only after confirmation by which of the following?
- A. The United States Senate
- B. The United States House of Representatives
- C. The Federal Open Market Committee
- D. The Board of Governors of the Federal Reserve
Q12. For approximately how many years did Jerome Powell serve as Chair of the U.S. Federal Reserve before his chairmanship ended in 2026?
- A. Four years
- B. Six years
- C. Eight years
- D. Ten years
Q13. Which one of the following is the nodal Union ministry for India's Deep Ocean Mission and the draft Blue Economy policy, under which large-scale seabed mapping of the EEZ is being pursued?
- A. Ministry of Ports, Shipping and Waterways
- B. Ministry of Earth Sciences
- C. Ministry of Environment, Forest and Climate Change
- D. Ministry of Fisheries, Animal Husbandry and Dairying
Q14. The Kavach Automatic Train Protection (ATP) system was indigenously developed by which one of the following bodies of Indian Railways?
- A. Research Designs and Standards Organisation (RDSO)
- B. Dedicated Freight Corridor Corporation of India Limited (DFCCIL)
- C. National High Speed Rail Corporation Limited (NHSRCL)
- D. Central Organisation for Railway Electrification (CORE)
Q15. With reference to gauges and the network of Indian Railways, consider the following statements:
1. Indian broad gauge has a track width of about 1.676 metres.
2. Project Unigauge, launched in 1992, aims to convert metre gauge and narrow gauge lines to broad gauge.
3. Indian Railways is the fourth-largest railway network in the world by route length.
4. The metre gauge has a track width greater than that of the broad gauge.
Which of the statements given above are correctly identified?
- Indian broad gauge has a track width of about 1.676 metres.
- Project Unigauge, launched in 1992, aims to convert metre gauge and narrow gauge lines to broad gauge.
- Indian Railways is the fourth-largest railway network in the world by route length.
- The metre gauge has a track width greater than that of the broad gauge.
- A. 1, 2 and 3
- B. 1, 2 and 4
- C. 3 and 4 only
- D. 2 and 3 only
Q16. With reference to the allocations for the Ministry of Railways in the Union Budget 2025-26, consider the following:
1. Gross Budgetary Support — ₹2,52,000 crore
2. Rolling stock — ₹57,693 crore
3. Gauge conversion — ₹4,550 crore
4. Total capital expenditure — ₹1,52,000 crore
Which of the above is/are NOT correctly matched?
- Gross Budgetary Support — ₹2,52,000 crore
- Rolling stock — ₹57,693 crore
- Gauge conversion — ₹4,550 crore
- Total capital expenditure — ₹1,52,000 crore
- A. 4 only
- B. 1 and 4 only
- C. 2 and 3 only
- D. 3 only
Q17. With reference to the Vande Bharat and Amrit Bharat Express trains, consider the following statements:
1. Vande Bharat Express is a fully air-conditioned trainset designed for a maximum speed of 160 kmph.
2. Amrit Bharat Express is a non-AC push-pull long-distance train aimed at low and middle income passengers.
3. Vande Bharat trainsets are equipped with the Kavach collision-avoidance system.
4. Amrit Bharat Express is a fully air-conditioned semi-high-speed train.
Which of the statements given above are correctly identified?
- Vande Bharat Express is a fully air-conditioned trainset designed for a maximum speed of 160 kmph.
- Amrit Bharat Express is a non-AC push-pull long-distance train aimed at low and middle income passengers.
- Vande Bharat trainsets are equipped with the Kavach collision-avoidance system.
- Amrit Bharat Express is a fully air-conditioned semi-high-speed train.
- A. 1, 2 and 3
- B. 1, 3 and 4
- C. 2 and 4 only
- D. 1 and 4 only
Q18. Indian Railways has set the target of achieving 100% electrification of its Broad Gauge network by the end of which financial year?
- A. FY 2025-26
- B. FY 2023-24
- C. FY 2027-28
- D. FY 2029-30
Q19. As per the Ministry of Railways' Year End Review 2025, approximately what percentage of the Broad Gauge network of Indian Railways has been electrified?
- A. About 99.2%
- B. About 82%
- C. About 94%
- D. About 100%
Q20. India has titled its recent trade agreements differently — CECPA (Mauritius), CEPA (UAE), ECTA (Australia), TEPA (EFTA) and CETA (UK). Across these five agreements, how many distinct agreement nomenclatures (titles) are used?
- A. Two
- B. Three
- C. Four
- D. Five
Q21. India's Foreign Trade Policy 2023, the domestic framework underpinning its FTA-led export diversification and China+1 strategy, is notified and administered by which body?
- A. Directorate General of Foreign Trade (DGFT)
- B. Reserve Bank of India
- C. Central Board of Indirect Taxes and Customs
- D. NITI Aayog
Q22. To facilitate investment and coordinate implementation of the India–EFTA TEPA, which dedicated institutional mechanism was inaugurated?
- A. India–EFTA Desk
- B. India–EFTA Investment Board
- C. EFTA Trade Facilitation Council
- D. India–EFTA Joint Venture Fund
Q23. The India–EFTA TEPA was concluded with the member states of the European Free Trade Association. Which of the following are correctly identified as EFTA member states party to the agreement?
- Switzerland
- Norway
- Iceland
- Denmark
- A. 1, 2 and 3
- B. 1, 3 and 4
- C. 2, 3 and 4
- D. 1, 2, 3 and 4
Q24. The India–Australia ECTA, India's first FTA with a developed economy in over a decade, came into force on which date?
- A. 2 April 2022
- B. 29 December 2022
- C. 30 September 2021
- D. 29 December 2023
Q25. In the chronological sequence of India's FTA wave — Mauritius, UAE, Australia, EFTA, UK, EU, Oman and New Zealand — the India–New Zealand FTA occupies which position?
- A. Sixth
- B. Seventh
- C. Eighth
- D. Ninth
Q26. The India–European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) entered into force in which year?
- A. 2023
- B. 2024
- C. 2025
- D. 2026
Q27. India's recent Free Trade Agreements, including the India–New Zealand FTA, are negotiated by which body?
- A. Department of Commerce, Ministry of Commerce and Industry
- B. Department for Promotion of Industry and Internal Trade (DPIIT)
- C. Department of Economic Affairs, Ministry of Finance
- D. Ministry of External Affairs
Q28. The India–New Zealand Free Trade Agreement, signed in April 2026, was described as India's fastest-negotiated FTA. Counting from the formal launch of negotiations to their conclusion, exactly how many months did it take?
- A. 6 months
- B. 9 months
- C. 12 months
- D. 18 months
Q29. The Incentive Scheme for Promotion of Critical Mineral Recycling — which supports recovery of critical minerals from secondary sources such as e-waste and spent lithium-ion batteries — is implemented by which of the following?
- A. Ministry of Mines
- B. Ministry of Environment, Forest and Climate Change
- C. Ministry of Electronics and Information Technology (MeitY)
- D. Ministry of Heavy Industries
Q30. The committee that recommended India's first comprehensive list of critical minerals (including rare earths) in 2023 was constituted by which of the following?
- A. Ministry of Mines
- B. Ministry of Coal
- C. Ministry of Science and Technology
- D. Department of Atomic Energy