Kerala PSC KAS Prelims Paper 2 Mock Test - 9 - Kerala PSC KAS MCQ

• A proportional tax is an income tax system that levies the same percentage tax to everyone regardless of income. A proportional tax is the same for low, middle, and high-income taxpayers. Proportional taxes are sometimes referred to as flat taxes. Proportional taxation is intended to create greater equality between marginal tax rates and average tax rates paid. Hence statement 1 is not correct. 
• Proportional taxes reduce the autonomous expenditure multiplier because taxes reduce the marginal propensity to consume out of income. The proportional income tax acts as an automatic stabilizer – a shock absorber because it makes disposable income, and thus consumer spending, less sensitive to fluctuations in GDP as compared to progressive taxation. Hence statement 2 is not correct. 
  • Progressive tax is the one where the tax rate increases with the taxpayer’s income. An example for progressive taxation is: 10% tax rate for income of Rs 2 lakh, 20% for Rs 5 lakh and 30% for Rs 10 lakh. Here, the tax liability or the absolute amount as well as the proportion of income to be paid as tax increases with the income of the taxpayer.

Satish Kumar Vaduguri, the Director (Marketing) of IOC, has been appointed as the interim chairman, replacing Shrikant Madhav Vaidya. This change reflects ongoing administrative adjustments within key government corporations.

Vice Admiral CR Praveen Nair has taken command of the Indian Naval Academy, Ezhimala. His extensive background in the Navy, particularly in communications and electronic warfare, adds significant experience to the leadership of the academy, which plays a crucial role in training future naval officers.

Rajwinder Singh Bhatti has been appointed as the Director General of CISF with a term that runs until September 30, 2025. This role is vital for overseeing the security of critical infrastructure across India.

Fatemeh Mohajerani has made history by being appointed as Iran's first female government spokesperson. Her role represents a significant step towards gender representation in government positions in Iran, where women's roles have traditionally been limited.

Jay Shah's election as Independent Chair of the ICC coincides with cricket's inclusion in the LA 2028 Olympics, a pivotal moment aimed at globalizing the sport. His leadership will be crucial in navigating the complexities of this transition.

Satish Kumar has been appointed as the new Chairman of the Railway Board, effective September 1, 2024. His leadership will be important for the future direction and efficiency of Indian Railways.

B Srinivasan, a senior IPS officer, has taken charge as the Director General of the NSG. His role is critical in maintaining national security and overseeing counter-terrorism operations in India.

Daljit Singh Chaudhary will lead the Border Security Force (BSF) until November 30, 2025. His experience as head of the Sashastra Seema Bal prepares him for the challenges of overseeing border security.

Kevan Parekh has been appointed as Apple's new CFO, succeeding Luca Maestri. His extensive background in financial leadership positions at major corporations will be instrumental as Apple launches new products, particularly those featuring AI enhancements.

Sindhu Gangadharan has been appointed chairperson of Nasscom while continuing her role at SAP Labs India. Her leadership is pivotal for the Indian tech industry, particularly in advocating for innovation and policy development.

Mohanlal resigned from his position as AMMA President following the Justice Hema Committee report, which uncovered systemic harassment within the Malayalam film industry. This resignation underscores the need for accountability and reform in entertainment sectors.

R. Sridhar has been appointed as the assistant coach for Afghanistan's cricket team. His prior experience with India's national team and IPL franchises positions him well to contribute effectively to the development of Afghan cricket.

Govind Mohan, a senior IAS officer, will take on the responsibilities of Union Home Secretary. His previous role as Union Culture Secretary involved significant initiatives, indicating his capability to handle the complexities of home affairs.

Vice Admiral Rajesh Dhankhar has been appointed as the Director General of Project Seabird, which is crucial for enhancing India’s naval capabilities. His extensive experience in navigation and fleet command will be vital for this significant project.

Before taking charge as the Director General of the NSG, B Srinivasan served as the Director General of Police in Bihar. His transition to NSG reflects a focus on enhancing security protocols and counter-terrorism strategies.

In News: Seven products from across India including four from Rajasthan were given the Geographical Indication (GI) tag by the Geographical Indications Registry in Chennai. Statements 1 and 2 are correct : Geographical Indication (GI) is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. 

• In order to function as a GI, a sign must identify a product as originating in a given place. 
• Geographical Indications are covered as a component of intellectual property rights (IPRs) under the Paris Convention for the Protection of Industrial Property. 
• At the International level, GI is governed by the World Trade Organisation’s (WTO’s) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). 
• In India, Geographical Indications registration is administered by the Geographical Indications of Goods (Registration and Protection) Act, 1999 which came into force with effect from September 2003. 
• Statement 3 is not correct : The first product in India to be accorded with GI tag was Darjeeling tea in the year 2004-05.

India’s DPI experiment - “India Stack”: 

• The remarkable transformation of India’s digital landscape has been made possible by pioneering digital public infrastructure (DPI) experiments.
• The Indian DPI ecosystem envisioned as “India Stack” has been pivotal in unlocking the power of identity, payments, and data sharing to drive economic growth and foster a more inclusive digital economy. 
• Its transformative ability lies in 
  • Its potential to be used across multiple use cases, 
  • Enabling the creation of novel solutions that drive innovation, 
  • Inclusion and competition in the digital realm through its modular layers.

• According to RBI, Foreign Investment means any investment made by a person resident outside India on a repatriable basis in capital instruments of an Indian company or to the capital of an Limited Liability Partnership (LLP). Foreign Direct Investment (FDI) is the investment through capital instruments by a person resident outside of India: 
  •  in an unlisted Indian company or 
  •  in 10 percent or more of the post-issue paid-up equity capital on a fully diluted basis of a listed Indian company. Foreign Portfolio Investment is any investment made by a person resident outside India in capital instruments where such investment is 
  • less than 10 percent of the post-issue paid-up equity capital on a fully diluted basis of a listed Indian company or 
  • less than 10 percent of the paid-up value of each series of capital instruments of a listed Indian company. Based on these definitions, Foreign investments on a small scale of less than 10 percent in a listed company cannot be treated as FDI. So, Assertion (A) is correct. 
• As per the Aravind Mayaram committee, any foreign investment of 10 or more than ten percent in a listed company will be classified as FDI. Further, in the case of an unlisted company, irrespective of a threshold limit will be classified as FDI. Hence the benchmark limit set by the committee to differentiate between FDI and FPI is 10% and not 25%. So, Reason (R) is not correct.

• Acquiring a loan currently requires (Loan Service Providers) LSPs to shoulder a host of responsibilities. These include sourcing, identity verification, underwriting, disbursement, recollections and dispute management. Each of these is a process unto itself, and their execution impacts the profits earned by an LSP. Taking these processes online would reduce the time and cost of loan disbursements and could reflect more favourable interest rates charged by lenders. The new technology, OCEN, bundles these lending processes and executes them online. It automates screening processes to decide on loan-worthy customers and the on boarding of new borrowers. These processes are being streamlined further by integrating the verification process with Aadhaar’s existing e- KYC system. OCEN is a credit protocol infrastructure that will mediate the interactions between loan service providers, usually fintech and mainstream lenders, including all large banks and NBFCs. So, Statement 1 is correct. 
• OCEN is being developed by iSPIRT, an Indian software industry think tank, not by the Reserve Bank of India. OCEN could be instrumental in building a credit marketplace or, more broadly, a digital ecosystem of lenders and loan service providers (LSPs). So, Statement 2 is not correct. 
• Digitalizing credit systems is also expected to help democratize them by connecting loan providers with customers who are not part of any formalized credit system. OCEN can also be used by non-bank small- scale lenders, thus expanding the scope of lending and borrowing. So, Statement 3 is correct.

• GVA stands for Gross Value Added. GVA at basic prices is also called GVA Producer’s prices. The term Basic prices is an alternate term to describe Producer’s prices. It is different from market prices or buyer’s prices. While producers pay production taxes and receive production subsidies, buyers pay product taxes and get product subsidies. 
• Simply, GVA basic prices = GVA factor cost + Production Taxes - Production subsidies 
• The reward to employees (CE), entrepreneurs (OS) and consumption of fixed capital (CFC) is called factor cost. There is a difference between the tax on products and the tax on production. Tax on products includes taxes like sales tax and excise duty. It is the tax imposed as it was produced and sold. Tax on production refers to the tax imposed irrespective of production, like license fees and land tax. So, Option (a) is correct.

• Consumer Price Index is a measure of change in retail prices of goods and services consumed by defined population group in a given area with reference to a base year. Hence statement 1 is not correct. 
• This basket of goods and services represents the level of living or the utility derived by the consumers at given levels of their income, prices and tastes. 
• The CPI includes the prices of goods consumed by representative customers, hence it includes prices of imported goods. Hence statement 2 is correct. 
• The consumer price index measures change only in one of the factors i.e. prices. This index is an important economic indicator and is widely considered as a barometer of inflation, a tool for monitoring price stability and as a deflator in national accounts. 
• Consumer price index is used as a measure of inflation in around 157 countries. The dearness allowance of Government employees and wage contracts between labour and employer is based on this index. 
• In 2011 the CSO brought out a revised CPI, which was CPI (Urban), CPI (Rural) and CPI (Urban +Rural) with 2010 as the base price. CSO revised the base year of this newly set up index to 2012 in January 2015.

• Money multiplier is the ratio of the total money supply to the stock of high-powered money in an economy. Hence option (b) is the correct answer. o By definition, money supply is equal to currency plus deposits 
• M = CU + DD = (1 + cdr )DD ▪ where, cdr = CU/DD o High-powered money then consists of currency held by the public and reserves of the commercial banks, which include vault cash and banks’ deposits with RBI. 
• H = CU + R = cdr.DD + rdr.DD = (cdr + rdr)DD
  • Thus the ratio of money supply to high powered money ▪ M/H = 1+cdr/cdr+rdr > 1, as rdr > 1 
  • This is precisely the measure of the money multiplier. 
• The factors affecting the Money multiplier are the: Reserve ratio (SLR, CRR) and banking habits of the population, etc. 
  • For instance, assume that X bank has received a deposit of Rs 1000 and both SLR and CRR are maintained at 10 percent respectively i.e 20 percent in total. Now, the bank will keep Rs 200 as reserves (SLR and CRR) and the rest of the amount will be made available to the public in the form of loans. Now, a borrower takes a loan of Rs 800 from the bank either for consumption or for investment purposes. 
  • Suppose, the borrower has spent the loan taken for the purchase of an article. The seller of the article will receive the money and simultaneously deposit Rs 800 again with the bank. This happens because we have assumed that there is only a single bank in the economy. After receiving Rs 800 from the seller, the bank will again keep aside 20% of the amount i.e Rs 160 as reserves, and provide a loan to the public with the remaining amount. This process continues till the initial deposit of Rs 1000 becomes Rs 5000 i.e. 5 times the initial deposit. 
  • Reserve deposit ratio is the fraction of their total deposits which commercial banks keep as reserves.
  • Speculative demand is the demand for money as a store of wealth. 
  • Transaction demand is the demand for money for carrying out transactions.

• In India, the minerals are classified as minor minerals and major minerals. 
• According to section 3(e) of the Mines and Minerals (Development and Regulation) Act, 1957 “Minor Minerals” means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral. (For the purposes of this Act, the word "minerals” includes all minerals except mineral oils- natural gas and petroleum). 
• Major minerals are those specified in the appendices to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act 1957) and the common major minerals are Major Mineral are minerals like Agate, Asbestos, Barytes, Bauxite, Cadmium, Coal. Copper, Gold, Iron ore, Lead, Lignite, Manganese, Nickel, Rock Phosphate, Tungsten, Uranium, Wollastonite, Zinc, etc. It may be noted that there is no official definition for “major minerals” in the MMDR Act. Hence, whatever is not declared as a “minor mineral” may be treated as a major mineral. 
• The major-minor classification has nothing to do with the availability (abundance or scarcity) of these minerals, though it is correlated with the relative value of these minerals. Further, this classification is based more on their end-use, rather than the level of production, level of mechanization, export, and import, etc. (eg. Sand can be a major mineral or a minor mineral depending on where it is used; the same is the case for limestone).
•  Hence option (c) is the correct answer.

• The process of moving from self-employment and regular salaried employment to casual wage work is called casualization of the workforce. Casual workers are defined as those who work for others in farm or non-farm enterprises and are paid wages that are daily or periodic in nature. All daily wage-earning employees and some categories of contract employees are casual laborers. Hence, option (d) is the correct answer.
• The wage-paid labor is largely non-unionized due to the casual and seasonal nature of employment and the scattered location of enterprises. This sector is marked by low incomes, unstable and irregular employment, and a lack of protection either from legislation or trade unions.
• Formalization of the workforce refers to the situation wherein there is a continuous increase in the percentage of the workforce in the formal sector and a simultaneous decline in the percentage of the workforce in the informal sector. Around 90 percent workforce in India is in the ―unregulated informal sector.

• The balance of payments (BoP) records the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time period typically a year. There are two main accounts in the BoP — the current account and the capital account. Hence, statement 1 is correct. 
• The essence of international payments is that , a country that has a deficit in its current account must finance it by selling assets or by borrowing abroad. Thus, any current account deficit must be financed by a capital account surplus, that is, a net capital inflow. 
• A country is said to be in a balance of payments equilibrium when the current account deficit is financed entirely by international lending without any reserve movements. Hence, if a country is having BoP equilibrium it's official foreign exchange reserves remain unchanged. Hence, statement 2 is not correct. 
• Alternatively, the country could use its reserves of foreign exchange in order to balance any deficit in its balance of payments. The reserve bank sells foreign exchange when there is a deficit. This is called an official reserve sale. The decrease (increase) in official reserves is called the overall balance of payments deficit (surplus).

Manure is an organic material that is used to fertilize land, usually consisting of the feces and urine of domestic livestock, with or without accompanying litter such as straw, hay, or bedding. Farm animals void most of the nitrogen, phosphorus, and potassium that is present in the food they eat, and this constitutes an enormous fertility resource. In some countries, human excrement is also used. Livestock manure is less rich in nitrogen, phosphorus, and potash than synthetic fertilizers and hence must be applied in much greater quantities than the latter.

Advantages of Manure: The organic manure is considered better than fertilisers. This is because:

● It enhances the water holding capacity of the soil.

● It makes the soil porous due to which exchange of gases becomes easy.

● It increases the number of friendly microbes.

● It improves the texture of the soil.

Option (d) is the incorrect statement. Synthetic fertilizers provide specific nutrients to plants in a specified quantity, manure on the other hand provides all nutrients in varying proportions.

Option (b) is the correct answer.

Microbes are also used for commercial and industrial production of certain chemicals like organic acids, alcohols and enzymes.

Examples of acid producers are

Pair 1 is incorrectly matched. Aspergillus niger (a fungus) of citric acid, Acetobacter aceti (a bacterium) of acetic acid;

Pair 3 is incorrectly matched. Clostridium butylicum (a bacterium) of butyric acid and

Pair 4 is incorrectly matched. Lactobacillus (a bacterium) of lactic acid,

Pair 2 is correctly matched.

Yeast (Saccharomyces cerevisiae) is used for commercial production of ethanol.

Pasteurization is a process in which water and certain packaged and non-packaged foods (such as milk and fruit juice) are treated with mild heat, usually to less than 100 °C (212 °F), to eliminate pathogens and extend shelf life. The process is intended to destroy or deactivate organisms and enzymes that contribute to spoilage or risk of disease.

Statement 1 is correct. Milk is heated to about 700C for 15 to 30 seconds and then suddenly chilled and stored. By doing so, it prevents the growth of microbes.

Statement 2 is correct. Pasteurised milk can be consumed without boiling as it is free from harmful microbes. KB) The process was named after the French scientist Louis Pasteur, whose research in the 1880s demonstrated that thermal processing would inactivate unwanted microorganisms in wine.

Spoilage enzymes are also inactivated during pasteurization. Today, pasteurization is used widely in the dairy industry and other food processing industries to achieve food preservation and food safety.

Statement 1 is correct.

● Nitrogen is a vital macronutrient for most plants.

● Nitrogen is an inert gas which is necessary for life.

● It is the most abundant element in the atmosphere.

● A little over 78% of dry air on Earth is nitrogen.

● Atmospheric nitrogen, or dinitrogen, is unreactive and cannot be utilized by plants directly. Statement 2 is correct.

● Nitrogen is being changed into forms that are harmful, and the natural nitrogen cycle is being disturbed.

● Nitrogen compounds running off from farmland have led to water pollution problems around the world, while nitrogen emissions from industry, agriculture and vehicles make a big contribution to air pollution.

Statement 3 is also correct.

● Nitrogen can be a pollutant when it escapes into the environment and react with other organic compounds.

● It is either released into the atmosphere, gets dissolved in water sources such as rivers, lakes or groundwater, or remains in the soil. It can even be a factor in the greenhouse effect.