UPSC Economy Quiz: Test Your Knowledge on Credit Societies, Inflation & More
UPSC Economy Quiz: Credit Societies, Inflation & More

UPSC Economy Quiz: Sharpen Your Prelims Preparation

Are you gearing up for the UPSC Civil Services Examination Prelims in 2026? It is time to test your knowledge and revise key economic concepts. This daily subject-wise quiz focuses on the Economy, helping you assess your understanding of static syllabus topics. Today's edition includes questions on credit societies, headline inflation, and other vital areas. Let us dive in and see how well you fare.

Question 1: Understanding Credit Societies

Consider the following statements about credit societies:

  1. They are regulated by the Reserve Bank of India.
  2. They can accept deposits only from their members and lend only to their members.
  3. They can issue cheques payable to the public.

How many of these statements are correct?

  1. Only one
  2. Only two
  3. All three
  4. None

Relevance: Credit societies often confuse aspirants who mistake them for cooperative banks. This topic is high-yield for factual questions in prelims. The UPSC tests awareness of their regulatory framework and banking limitations.

Explanation: The Reserve Bank of India recently proposed reopening the licensing window for urban cooperative banks after two decades. This move could benefit cooperative credit societies. However, credit societies fall under the Registrar of Co-operative Societies, not the RBI. They accept deposits and provide loans exclusively to members. They cannot issue cheques to the public or offer full banking services like online transfers. Thus, statement 2 is correct, while statements 1 and 3 are incorrect. The correct answer is option (a).

Question 2: Decoding Headline Inflation

Consider these statements about headline inflation:

  1. It measures the rise in prices across goods only and does not include services.
  2. It is based on the Consumer Price Index.

Which statement or statements are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Relevance: Headline inflation is a core concept in monetary policy and RBI-related queries. The UPSC frequently tests it through distinctions between CPI and WPI to assess understanding of economic indicators.

Explanation: India's headline retail inflation, based on the Consumer Price Index, rose to 1.33 percent in December 2025 from 0.71 percent in November. Food prices declined for the seventh consecutive month. Headline inflation measures overall price increases across all goods and services, closely tied to the CPI, which tracks a fixed basket of items. Therefore, statement 2 is correct, but statement 1 is not. The correct answer is option (b).

Question 3: Cryptocurrency Regulation in India

Which entity serves as the single-point regulator for cryptocurrency exchanges operating in India?

  1. Reserve Bank of India
  2. Financial Intelligence Unit
  3. Securities and Exchange Board of India
  4. Ministry of Electronics and Information Technology

Relevance: Cryptocurrency regulation is an evolving current-affairs topic. The UPSC often tests it by asking aspirants to identify the correct regulatory authority.

Explanation: India's Financial Intelligence Unit has introduced strict Anti-Money Laundering and Know Your Customer protocols for cryptocurrency exchanges. These include mandatory liveness detection and geographical tracking. The FIU, under the Union Finance Ministry, aims to curb illegal activities in the digital asset market. It discourages Initial Coin Offerings and Initial Token Offerings due to their high risk. As the single-point regulator under the Prevention of Money Laundering Act, the correct answer is option (b).

Question 4: Exploring Pax Silica

Consider these statements about Pax Silica:

  1. It is an initiative of Russia.
  2. It aims to build a secure supply chain ranging from critical minerals and energy inputs to advanced manufacturing and semiconductors.

Which statement or statements are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Relevance: Pax Silica is a new geopolitics-technology concept from current affairs. The UPSC tests it through questions about its origin and objectives to assess understanding of global supply chain shifts.

Explanation: Pax Silica is a US-led strategic initiative to counter China's dominance in new-age sectors. It seeks to reduce coercive dependencies and protect materials crucial for artificial intelligence. The initiative aims to build a secure supply chain from critical minerals to semiconductors. Hence, statement 1 is incorrect, but statement 2 is correct. The correct answer is option (b).

Question 5: Rice Production Insights

Consider these statements about rice production:

  1. India has surpassed China to become the world's largest rice producer in 2024-25.
  2. India currently accounts for around half of global rice production.

Which statement or statements are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Relevance: Rice production is a core agriculture statistic linked to food security and exports. The UPSC tests such data to check awareness of India's global ranking versus exaggerated claims.

Explanation: India produced around 150 million metric tonnes of rice in 2024-25, surpassing China's 145.28 million tonnes. However, India accounts for about 28 percent of global production, not half. Over the years, India's rice production has nearly quadrupled, with significant growth in the last five years. Thus, statement 1 is correct, but statement 2 is not. The correct answer is option (a).

Use this quiz to gauge your preparation level for the UPSC CSE Prelims. Regular practice with such questions will strengthen your grasp of economic topics. Keep revising and stay updated with current affairs to excel in your exam.