2023 GS Paper I, all questions

UPSC Prelims 2023 · GS Paper I

Question 25: Economy and Social Development

Consider the following markets :

  1. 1.Government Bond Market
  2. 2.Call Money Market
  3. 3.Treasury Bill Market
  4. 4.Stock Market

How many of the above are included in capital markets?

aOnly one
bOnly two
cOnly three
dAll four

AnswerUPSC’s answer is (b).

Capital markets deal in long-term funds: the stock market (shares) and the government bond market (long-term government securities) belong here. Money markets deal in short-term instruments of up to a year: the call money market and treasury bills (91, 182 and 364 days) belong there. So two of the four are capital markets: items 1 and 4.

  • 1. Government bonds are long-term securities traded in the capital market.
  • 2. Call money is an overnight money market.
  • 3. Treasury bills are short-term money market instruments.
  • 4. The stock market is a capital market.

How you could have got this

No shortcut here: in a “how many” question, ruling out options doesn’t help. Every statement has to be judged.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Only one undercounts: both the bond market and the stock market are capital markets.
  • (b) Correct: government bonds and the stock market are capital markets.
  • (c) Call money and treasury bills are short-term money market instruments.
  • (d) Two of the four belong to the money market, so not all four.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2023, General Studies Paper I, Series A. The paper on upsc.gov.in.