Revision Test for Prelims- lesson-3 Presented By-Prabhakar Jha
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The European Bank of Reconstruction and Development (EBRD) has been in news recently, which of the following statements about EBRD are correct? 1) India is set to become its member 2) It is an arm of European Economic Community (EEC) 3)It was founded to support countries of the former Eastern Bloc in the process of establishing their private sectors after dissolution of Soviet Union a) 1 only b) 1 and 2 ) 1 and 3 d) 2 and3
ANSWER-C .The European Bank for Reconstruction and Development (EBRD) is an international financial institution founded in 1991 head quartered in London. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build market economies. Initially focused on the countries of the former Eastern Bloc it expanded to support development in more than 30 countries from central Europe to central Asia
-2. Question According to the economic survey "low level equilibrium trap" is a situation where: -a) Savings and investments remains low b) Revenue generation remains low due to GST c) Local government revenues in comparison to other countries is low .d) Investment cycle remains stagnant due to overcapacity
ANSWER-C .The Survey pointed out that low level of tax collections by the local Governments in rural areas is posing challenge in reconciling fiscal federalism and accountability
3). What are the possible outcomes of pendency in judicial system in India? a) Delays in dispute resolution and contract enforcement b) Discourage investment and stall project:s c) Hamper tax collection and stress tax payers d) All of the above
ANSWER-D Judicial pendency has been a major bottleneck for doing business in India. The courts often delay projects through litigation also causing a non-favorable position in Doing Business
While advanced economies (AEs) are increasingly opting for fiscal activism, India should not go for such a move. Which of following are reasons for continuing with fiscal prudence: 1. Indian growth rates are substantially higher, while inflation rates are also substantially greater. -2. India's own recent experience highlights the risks associated with increasing growth rates through fiscal activism. The two episodes of Indian macro vulnerability in the last 35 years_ 1991 and 2013-were associated with large increases in fiscal deficits. Identify the correct statements a) 1 only b) 2 only c) Both 1 and 2 d) None
ANSWER-D Fiscal activism or stimulus packages are needed only for recovery from depression and recession.The course of extra spending should be strictly regulated to prevent burdening from public debt and high debt service ratios. Burden of interest payments already is very high with up to 25% of revenue expenditure curtailing developmental spending.
ANSWER-B -Hint: On the financial front, there has been divergence on both income and consumption. There is convergence ie that IMR and life expectancy are trending towards similar goals in various states in India. This is due to catching up of education and health parameters in various states
ANSWER-D The economic crises here was primarily a balance of payment crises and at the same time there was a significant increase in oil prices due to the Gulf war. Also, low toreign exchange reserves meant India had to mortgage gold to sustain critical imports such as oil. Import substitution policy meant that quotas and strict FERA made flow of foreign funds into India difficult.
ANSWER-D "The people who are always poor'and those whose are usually poor but who may sometimes have a little more money are called chronic poor. Another group is called the churning(transient) poor because they keep moving in and out of the poverty segment( small scale workers).There are a segment of people who are occasionally poor meaning they are rich most of the time but due to bad luck turn poor for a while
-9). Which of the following statements is/are true for the current account of a country? - 1. It shows the net income generated in the foreign trade sector 2. It relates to claims and liabilities of financial nature Choose the correct answer from the code given below: a) 1 only .b) 2 only c) Both 1 and 2 d) Neither 1 nor 2
ANSWER-A Foreign trade is part of current account whereas dealings in the financial sector are largely covered under capital account
ANSWER-A Capital gains tax will boost consumption in present as savings will be taxed later and also slow down investments.Y-C+S. therefore, if consumption increases saving would fall. Also S-I so investments would alsc reduce
-14). Which of the following factors led to failure of trickle-down theory: 1. Drain of wealth 2. Western paradigm model 3. Population explosion 4. Over dependence on agriculture -Select your answers using the codes given below: -a) 1, 3 and 4 b) 2, 3 and 4 c) 1, 2 and 4 d) 1,2, 3 and 4
-16). Consider the following statements: -1. India recently signed a double taxation avoidance agreement with Hong Kong 2. DTAA are meant to make the country more attractive for foreign investors Which of the above statements are correct: a) 1 only .b) 2 only -c) Both 1 and 2 d) None
ANSWER-A The Nature Index tracks the affiliations of high-quality scientific articles. Updated monthly, the Nature Index presents researclh outputs by institution and country
-19). Consider the following statements: 1. Doing business report will now be assessed at the district level 2. India has not been able to improve its rank significantly in enforcement of contracts Which of the above statements are correct: a) 1 only .b) 2 only c) 1 and 2 only d) None
ANSWER-A GTA is conferred with administrative, executive and financial power on the transfer subject but it does not enjoy legislative power. GTA sabha consists of 50 members among which 45 are elected and 5 are nominated by the governor.
ANSWER-B -M777 Ultra-light howitzers artillery guns inducted in Indian army which are imported from US.
GS And GA faculty @ Mahendra's Coaching Institute. Teaching Polity, and international relations for 7 years