UPSC Prelims 2023 GS Paper I · Q28 of 98 Economy easy

Consider the investments in the following assets : 1. Brand recognition 2. Inventory 3. Intellectual property 4. Mailing list of clients How many of the above are considered intangible investments?

  1. (a) Only one
  2. (b) Only two
  3. (c) Only three ✓ UPSC's answer
  4. (d) All four

Why the answer is (c)

• Intangible assets have no physical form but yield value: brand recognition, patents, copyrights, trademarks, software, goodwill and customer databases.

• Brand recognition (item 1), intellectual property (item 3) and a mailing list of clients (item 4) are all intangible investments.

• Inventory — raw materials and finished goods held for sale — is a physical, tangible current asset (item 2).

• In national accounts, spending on R&D and IP is now counted as investment, reflecting the growing weight of intangibles.

• Hence three of the four, option (c).

Why the other options are wrong

(a) Only one
Three items, not one, are intangible.
(b) Only two
Brand, IP and mailing lists are all intangible, making three.
(d) All four
Inventory is a tangible asset.

Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2023, held on 28 May 2023. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.

Reading the answer is not the same as getting it right under a clock. Practise this question with UPSC's negative marking, and anything you miss goes into an error notebook until you get it right twice.

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