Economy (Part-3) (CDS-Solved Paper)

Total Questions: 50

31. Which among the following is not an aspect of Gender Mainstreaming (GM)? [Morning Shift-2015 (I)]

Correct Answer: (d) GM was followed by the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW)
Solution:

The gender equality and women’s empowerment mandate agreed by United Nations Charter reaffirmed the equal rights of men and women the 1995 Fourth World Conference on women endorsed gender mainstreaming as a critical and strategic approach of achieving gender equality commitments.

This conference was resulting Beijing declaration and platform for action. The 1997 agreed conclusions of ECOSOC defined gender mainstreaming as the process of assessing the implication for women and men of any planned action including legislation, policies or programmes.

32. Consider the following statements relating to the World Trade Organisation (WTO): [Evening Shift-2014 (II)]

1. The WTO deals with the global rules of trade between nations.
2. The goal of the WTO is to help producers of goods and services, exporters and importers conduct their business.
3. The WTO, which is a successor body of the General Agreement on Tariffs and Trade, came into being following the Uruguay Round of Negotiations.
4. The WTO distances itself in framing of rules on trade in intellectual property rights. Which of the statements given above are correct?

Correct Answer: (a) 1, 2 and 3
Solution:

The WTO commenced under the Marrakesh Agreement in 1995 and replaced GATT. Most of the issues it deals with have been derived from the Uruguay round of negotiations. It deals with the global rules of trade between nations, helps producers of goods and services, exporters and importers conduct their business.

The WTO’s agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), was negotiated in 1986-94 Uruguay round. Rules related to trade, tariff, patent and intellectual property rights are framed by the WTO. Hence, option (a) is correct.

33. Consider the following statements relating to the World Bank: [Evening Shift-2014 (II)]

1. The World Bank was established in 1946, which is headquartered in New York.
2. The World Bank Group has set for itself the goal to end extreme poverty from the world by 2030.
3. The World Bank is a vital source of financial and technical assistance to developing countries around the world. It is not a bank in the ordinary sense but a unique partnership to reduce poverty and support development.
4. The World Bank Group comprises five institutions managed by their member countries in order to promote shared prosperity by fostering the income growth of the bottom 40% for every country.
Which of the statements given above are correct?

Correct Answer: (b) 2, 3 and 4
Solution:

The World Bank was established in 1944 Bretton Woods Conference and is headquartered at Washington DC (USA). Hence, statement (1) is not correct.

It is a source of financial and technical assistance for developing countries to reduce poverty and support development. The World Bank Group intends to end extreme poverty by 2030 and mainly comprises of IBRD, IFC, IDA, ICSID and MIGA, who are managed by their members to promote prosperity by strengthening the growth in income of the bottom 40% of every country.

34. Which of the following statements about International Monetary Fund (IMF) are correct? [Evening Shift-2014 (II)]

1. The IMF is a United Nations specialised agency.
2. The IMF was founded at the Bretton Woods Conference in 1944 to secure international monetary cooperation.
3. The objective of the IMF is to stabilise currency exchange rates and to expand international liquidity (access to hard currencies).
Select the correct answer using the codes given below

Correct Answer: (a) 1, 2 and 3
Solution:

The IMF is a specialised agency of United Nations, founded in 1944 at Bretton Woods Conference. Its objectives are :
(i) To secure International monetary cooperation.
(ii) To stabilise currency exchange rates.
(iii) To expand international liquidity and trade.
(iv) To promote capital investment in under developed nation.
(v) To bring equilibrium in balance of payments.
(vi) To achieve balanced economic growth.

35. Union government in June, 2014 granted Navaratna status to [Evening Shift-2014 (II)]

1. Engineers India Limited
2. Coal India Limited
3. India Trade Promotion Organisation
4. National Buildings Construction Corporation Limited
Select the correct answer using the codes given below

Correct Answer: (c) 1 and 4
Solution:

The Union government on 24th June, 2014 granted Navaratna status to Engineers India Limited (EIL) and National Buildings Construction Corporation (NBCC). Department of Public Enterprises under the Ministry of Heavy Industries and Public Enterprises granted the Navaratna status to enhance the greater financial and operational autonomy.

36. World Bank in June, 2014 released a study report on India’s Power Sector titled ‘More Power to India : The Challenge of Electricity Distribution’. Which of the following is/are the key recommendation (s) of the report? [Evening Shift-2014 (II)]

1. Ensure regulatory autonomy, effectiveness and accountability for utilities and regulators.
2. Insulate utilities from State Governments to prevent interference with internal operations.
3. Scrap the Electricity Act, 2003 in order to improve the revenue generation of the power distribution companies.
Select the correct answer using the codes given below

Correct Answer: (b) 1 and 2
Solution:

‘More Power to India : The Challenge of Electricity Distribution’ ensures regulatory autonomy and accountability along with insulating utilities from the State Government to prevent interference with internal operations.

It reviewed the Electricity Act 2003, but did not recommend to scrap it. Hence, option (b) is correct.

37. Which of the following is not the recommendation of the Arvind Mayaram Committee on rationalising the FDI/FPI definition (June, 2014)? [Evening Shift-2014 (II)]

Correct Answer: (d) On NRI Investors, the Committee recommended treating non-repatriable investment as FDI.
Solution:

The government set-up a four member committee headed by Economic Affairs Secretary Arvind Mayaram to define FDI and FPI and remove the ambiguity between them.

On NRI investors, the committee recommended treating non- repatriable investment as domestic and exempting it from FDI related conditions.

38. Which one among the following pairs is not correctly matched? [Evening Shift-2014 (II)]

Correct Answer: (d)
Solution:

According to the law of variable proportions, when the variable factor is increased in the short-run, then marginal product first increases, then starts to fall and can become negative also. This law is characterised by the presence of three stages, i.e.

Increasing return to factor, diminishing returns to factor and negative returns to factor. In the third stage, total product falls and marginal product becomes negative. Hence, option (d) is not correctly matehed

39. The way total output changes due to change in all inputs in same proportion is known as law of [Evening Shift-2014 (II)]

Correct Answer: (a) returns to scale
Solution:

In the long run all factors of production are variable. No factor is fixed. Accordingly, the scale of production can be changed by changing the quantity of all factors of production.

The term returns to scale refer to the changes in output as all factors change by the same proportion. Hence, option (a) is correct.

40. Which of the following statements are correct? [Evening Shift-2014 (II)]

1. When marginal revenue is positive, total revenue increases with increase in output.
2. When marginal revenue is zero, total revenue is maximum.
3. When marginal revenue becomes negative, total revenue falls with increase in output. Select the correct answer using the codes given below

Correct Answer: (d) 1, 2 and 3
Solution:

Marginal revenue is calculated by dividing the change in total revenue by the change in output quantity. While marginal revenue can remain constant level of output, it follows the law of diminishing returns and eventually slow down, as the output level increases.

Perfectly competitive firms continue producing output until marginal revenue equals to marginal cost. Hence, all the statements are correct.