Acme Ai
A
अ
Question No. 141Interactive Test Mode
00:00
+2-0.66

Q141. Consider the following statements: Statement-I: In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes. Statement-II: Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means. Which one of the following is correct in respect of the above statements?

Consider the following statements: Statement-I: In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes. Statement-II: Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means. Which one of the following is correct in respect of the above statements?

Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2023 • Indian Economy

Correct Answer: Option (A) — Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

Concept & Option Breakdown

Standard Reference Verified

Statement-I is correct: Following the pandemic, global central banks (including the US Federal Reserve, European Central Bank, and RBI) aggressively hiked benchmark policy rates to manage record inflationary pressures. Statement-II is correct: Central banks operate under the conventional macroeconomic premise that raising policy rates increases borrowing costs, cools aggregate demand, and thereby tames consumer price inflation. Statement-II provides the direct economic rationale explaining the actions described in Statement-I.

Reviewed by Avinash Sir & Acme AI Research Team

Practice Full-Length & Sectional Prelims Mocks on this Interface

50 simulated tests in the APT Prelims Test Series (₹1,493) or 1-on-1 Mentorship with Avinash Sir.

Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2023 (Q141)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Banking & Financial System
Official Answer KeyOption (A) — Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

Related & Repeated Prelims PYQs (7)

Questions from other UPSC Prelims years testing the same or closely linked concept.

View Cluster in 3D Graph
2024 • Q29983% Match

Consider the following statements: Statement-I : If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be abl

Indian Economy • Indian Economic Planning & GrowthSolve
2023 • Q14381% Match

With reference to Central Bank digital currencies, consider the following statements: 1. It is possible to make payments in a digital currency without using the

Indian Economy • Banking & Financial SystemSolve
2023 • Q1681% Match

Consider the following statements: Statement-I: Recently, the United States of America (USA) and the European Union (EU) have launched the Trade and Technology

International Relations and Current Affairs • Current EventsSolve
2021 • Q11081% Match

With reference to the Indian economy, demand-pull inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. I

Indian Economy • Banking & Financial SystemSolve
2022 • Q35580% Match

With reference to Convertible Bonds, consider the following statements: 1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower

Indian Economy • Industry & InfrastructureSolve
2024 • Q14080% Match

Consider the following statements: Statement-I : Syndicated lending spreads the risk of borrower default across multiple lenders. Statement-II : The syndicated

Indian Economy • Banking & Financial SystemSolve
2023 • Q30080% Match

Consider the following statements: Statement-I: Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors is

Indian Economy • Indian Economic Planning & GrowthSolve

More PYQs from Indian Economy (Banking & Financial System)

Master the Indian Economy syllabus cluster by practicing these related previous year questions.

View All Indian Economy PYQs
2024 • Q138Banking & Financial System

With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements: 1. There is no

Indian EconomyPractice
2024 • Q139Banking & Financial System

Consider the following statements: 1. In India , Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Ba

Indian EconomyPractice
2023 • Q142Banking & Financial System

Which one of the following activities of the Reserve Bank of India is considered to be part of ‘sterilization’?

Indian EconomyPractice
2023 • Q144Banking & Financial System

Consider the following statements: 1. The Self-Help Group (SHG) programme was originally initiated by the State Bank of India by providing microcredit

Indian EconomyPractice
2022 • Q145Banking & Financial System

With reference to the Indian economy, consider the following statements: 1. If the inflation is too high, the Reserve Bank of India (RBI) is likely to

Indian EconomyPractice
2022 • Q146Banking & Financial System

Consider the following statements: 1. In India, credit rating agencies are regulated by the Reserve Bank of India. 2. The rating agency popularly know

Indian EconomyPractice
2022 • Q147Banking & Financial System

With reference to the Banks Board Bureau (BBB)’, which of the following statements are correct? 1. The Governor of RBI is the Chairman of BBB. 2. BBB

Indian EconomyPractice
2022 • Q148Banking & Financial System

In India, which one of the following is responsible for maintaining price stability by controlling inflation?

Indian EconomyPractice

Frequently Asked Questions — UPSC Prelims 2023 Q141

What is the official answer for UPSC Prelims 2023 GS Paper I Question 141 (Indian Economy)?

The official UPSC answer key for this 2023 Indian Economy (Banking & Financial System) question is Option (A): "Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2023 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Banking & Financial System". You can explore all repeated questions from Banking & Financial System in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Banking & Financial System UPSC Prelims question using option elimination?

To solve Banking & Financial System questions in UPSC Prelims, identify extreme modifiers, verify core NCERT conceptual definitions, and eliminate mutually contradictory statement pairs before locking your final option.

Beyond Previous Year Questions

Structured Prelims Practice & Mentorship

Pair previous year question analysis with full-length simulated mock tests and 1-on-1 faculty guidance.

APT 2027 • 50 Prelims Tests17% OFF

Acme Prelims Test Series (APT)

Built to eliminate 1/3rd negative marking losses and 50–50 option traps through structured simulation and NCERT-backed keys.

  • 50 High-Yield Tests: Subject Sectionals, Current Affairs, CSAT Paper II & Full-Length Simulators
  • 1/3rd Penalty & Trap Analytics: Identify whether marks are lost to over-attempting or conceptual gaps
  • Option-by-Option NCERT Keys: Detailed distractor analysis and elimination logic for every question
  • Custom PDF-to-Mock Generator: Convert your revision notes or current affairs PDFs into practice tests
Complete 50-Test Package
₹1,493₹1,799• Valid till Prelims 2027
1-on-1 Personal MentorshipCapped at 10 Seats

1-on-1 UPSC Mentorship with Avinash Sir

Weekly 1-on-1 strategy reviews, daily study accountability, and personalized MCQ attempt audits with an experienced UPSC mentor.

  • Weekly 1-on-1 Sessions: Direct mentorship with Avinash Sir (Former Plutus IAS Mentor, UPSC & UPPCS Mains Written)
  • APT 50-Test Series Included: Full Prelims GS1 & CSAT test series bundled at no additional cost
  • Mock Attempt & Elimination Audit: Question-by-question review to calibrate your risk and attempt accuracy
  • Prelims & Integrated Tracks: Available as dedicated Prelims mentorship or end-to-end Prelims + Mains guidance
Prelims & Integrated Tracks
17% OFF• Includes APT 50-Test Series