Option B is correct.

• Statements 1 and 2 are correct. Statement 3 is incorrect.

• Statement 1 is correct. The International Centre for Settlement of Investment Disputes (ICSID), set up in 1966 is an investment dispute settlement body whose decisions are binding on the parties.

• Statement 2 is correct. Though recourse to the centre is voluntary, but once the parties have agreed to arbitration, they cannot withdraw their consent unilaterally.

• Statement 3 is incorrect. India is not a member of ICSID. It is believed that being signatory to it encourages the foreign investment flows into an economy, but risks independent sovereign decisions, too.

• Option B is the correct answer.

• The Fisher Effect is an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates.

Option B is the correct answer.

• Statements 1 and 3 are correct. Statement 2 is incorrect.

• Statement 1 is correct: Though the dependence of the workforce on agriculture has come down, agriculture is still the largest employer. In 1951, more than 70 % of the labour force was involved in agriculture.

• Statement 2 is incorrect. There is a gradual shift from subsistence agriculture to commercial agriculture. It is mainly due to improved farming techniques, efficient machinery, and better irrigation facilities. Due to increase in population, the average land holdings have come down.

• Statement 3 is correct. Share of Kharif crop in total crop production gives indication of dependence of Indian agriculture during the monsoon. In 1961, the share of rainfall dependent kharif crops in total foodgrain production was 68%.

Option D is the correct answer.

• All the statements are correct.

• Statement 1 is correct.The Gender Inequality Index (GII) was introduced in the 2010 Human Development Report.

• Statement 2 is correct. The Gender Development Index (GDI) is the ratio of male to female HDI values. It measures gender gaps in human development achievements by accounting for disparities between women and men in three basic dimensions of human development – health, knowledge and living standards using the same component indicators as in the HDI.

• Statement 3 is correct. The GII is built on the same framework as the IHDI-to expose differences in the distribution of achievements between women and men. It measures the human development costs of gender inequality. Thus, the higher the GII value the more disparities between females and males and the more loss to human development.

Option A is the correct answer.

• Statements 1 and 2 are correct. Statement 3 is incorrect.

• Statement 1 is correct. There are other measures of inflation too like Consumer Price Index (CPI) and Wholesale Price Index (or WPI); however, GDP deflator is a much broader and comprehensive measure because it isn’t based on a fixed basket of goods.

• Statement 2 is correct. However, WPI and CPI are available on a monthly basis whereas deflators come with a lag (yearly or quarterly, after quarterly GDP data is released). Hence, monthly change cannot be tracked using GDP deflator, limiting its usefulness.

• Statement 3 is incorrect. GDP deflator value of 1 implies no change in price levels from the base year.

Option D is the correct answer.

• Statement 1 is incorrect. Statement 2 is incorrect.

• Statement 1 is incorrect. In terms of RBI guidelines on Priority Sector Lending (PSL) a target of 40 percent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance Sheet Exposures (OBE), whichever is higher has been mandated for lending to the priority sector.

• Statement 2 is incorrect. Priority Sector Lending (PSL) mandated for all domestic Scheduled Commercial Banks and Foreign Banks with 20 branches and above.

• Option C is correct.

• To finance its expenditure, the government likes to borrow from the public rather than withdraw cash balances or borrow from the RBI. The reason is found in the effects of money supply in the country.

• Borrowing from the public has no effect on the money supply in the country. When the government borrows, money gets transferred from the public to the government. The net effect on total money supply in the country is almost zero.

Option D is the correct answer.

Statement 1 is incorrect. Statement 2 is incorrect.

The Fiscal Responsibility and Budget Management (FRBM) Act was passed in 2003 and it incorporates the fiscal rules to be followed by the government to ensure fiscal consolidation. In 2018, the Act was amended on the recommendation of a review committee under Dr NK Singh.

• Statement 1 is incorrect. The FRBM Act made it mandatory for the government to place the following along with the Union Budget documents in Parliament annually:

1. Medium Term Fiscal Policy Statement

2. Macroeconomic Framework Statement 3. Fiscal Policy Strategy Statement

• Statement 2 is incorrect. The escape clause in the Act allows the government to widen the deficit by 0.5 percentage points in times of exigencies such as a war or calamities of national proportion.

Option D is the correct answer.

• Both the statements are incorrect.

• Statement 1 is incorrect: Commodities transaction tax (CTT) is a tax similar to Securities Transaction Tax (STT), levied in India, on transactions done on the domestic commodity derivatives exchanges except agricultural commodities.

• Statement 2 is incorrect: It is considered as a direct tax.

Option D is the correct answer.

• All the options are correct.

• Inflation redistributes wealth from creditors to debtors i.e. lenders suffer and borrowers benefit out of inflation. The opposite effect takes place when inflation falls (i.e. deflation).

• Holding money does not remain an intelligent economic decision (because money loses value with every increase in inflation) that is why people visit banks more frequently and try to hold the least money with themselves and put maximum with the banks in their savings accounts. This is also known as the shoe leather cost of inflation. It means that the savings rate increases. But this happens as a short-term effect of inflation.

• In the long-run, higher inflation depletes the saving rate in an economy. Just the opposite situation arises when inflation falls or shows falling traits with decreasing saving, in the short-run and increasing saving in the long-run, respectively.