NTA UGC NET/JRF Exam, December-2022 Economics (Shift-I)

Total Questions: 100

91. U. Pagano and M.A. Rossi (2009) have advanced a hypothesis that states that, the crash of the knowledge economy is due to the intellectual monopolies, i.e. the huge protection inherent to Intellectual Property Rights (IPRs).

The authors have stated the institutions, which are facilitating IPRS are responsible for the crash.

According to the authors. IPRs have acted as 'supertarrifs' as they have raised the cost of investment for countries that had neither abundant cheap labour nor high amounts of IPR resources.

The IPRs may have subsequently exerted negative effect even on IP (Intellectual Property) rich firms or the conflicting rights of the firm may affect each other's investments and result in a situation of a savings glut.

Therefore, the authors suggested - "If intellectual monopolies are one of the causes of the crash, the remedies should not only focus on monetary policy, financial regulation or even on standard

Keynesian policies, rather regulation should be made to decrease the level of intellectual monopolization or even on standard Keyesian policies, rather regulation should be made to decrease the level of intellectual monopolization of economy'".

The policy measures they propose, however, aimed at redressing the balance between public and private knowledge, would not only have strong short-run super-multiplicative effects but would have long-run benefits as well.

Correctly state the hypothesis of Pagano and Rossi with regards to the crash of the knowledge economy. 

Correct Answer: (c) The root cause of the crash of the knowledge economy is the intellectual monoplies, i.e. the huge protection inherent to intellectual Property Rights.
Solution:

The root cause of the crash of the knowledge economy is the intellectual monopolies, i.e. the huge protection inherent to Intellectual Property Rights.

92. Асcording to the authors, who is responsible for the crash of the knowledge economy?

Correct Answer: (b) The institutions which are facilitating IPRs.
Solution:

The Institutions which are facilitating IPRs.

93. Why have the authors considered IPRs as a super tariff?

Correct Answer: (d) The IPRs have raised the cost of investments for countries that had neither abundant cheap labour nor high amount of IPR resources. hence it acted as a super tariff.
Solution:

The IPRs have raised the cost of investments for countries that had neither abundant cheap labour nor high amount of IPR resources, hence it acted as a super tariff.

94. How are the IPRs responsible for a savings glut?

Correct Answer: (c) The IPRs have given rise to conflicting rights for different firms which has affected the volume of investment negatively and resulted in a situation of a savings glut.
Solution:

The IPRs have given rise to conflicting rights for different firms, which has affected the volume of investment negatively and resulted in situation of a saving glut.

95. What remedies do the authors suggest for the knowledge economy to recover from the crisis?

Correct Answer: (d) The recovery of the knowledge economy from the crisis through the regulations, which regulations, which can decrease the the level of intellectual monopolisaton (IPRs) in the economy
Solution:

The recovery of the knowledge economy from the crises can be achieved through the regulations, which can decrease the level of intellectual monopolization (IPRs) in the economy.

96. Which of the following is not relevant as a climate-related risk for the financial sector?

Correct Answer: (c) Insolvency of banks.
Solution:

Insolvency of banks.

97. Globally, the understanding about the systematic impacts of climate change on the economic and financial systems is still evolving. Broadly, the climate-related risks impact the financials sector through two channels -

(a) Physical risks and (b) transition risks. Physical risks refer to the economic and financial losses such as risk to the value of a collateral etc., resulting from the increasing frequency and severity of extreme weather events, gradual Long-term shifts of the climate and indirect effects of climate change (such as impact on ecosystem services etc.).

Transition risks are the ones that arise from the process of adjustments towards a lowcarbon economy. Its drivers include policies for climate mitigation, technological advances and shifts in public sentliments including that of customers and investors.

To cope with such risks, the central bank needs to develop a multi-pronged strategy that puts adequate emphasis on climate-related financial disclosures, stress testing, climate scenraio analysis and at the same time devising suitable regulatory initiatives.

The Indian Central Bank has set up the Sustainable Finance Group in this regard. This aligns with its mission, "to promote the economic and financial well being of the people of India in terms of price and financial stability:

fair and universal access NTA UGC NET/JRF Economics Dec. 2022 (02.03.2023, Shift-D) 259 to financial services and a robust, dynamic and responsive financial intermediation infrastructure."

Which of the following cannot be instrumental towards integrating climate risks into the financial system? 

Correct Answer: (d) Backward-looking risk assessment methods
Solution:

Backward-looking risk assessment methods.

98. Which of the following does not pertain to the category of transition risk drivers with respect to the climate-related risks?

Correct Answer: (b) Loss of ecosystem services
Solution:

Loss of ecosystem services.

99. Which of the following is not consistent with the mission of the RBI?

Correct Answer: (c) Setting national development priorities.
Solution:

Setting national development priorities.

100. Which of the following is the purpose of setting up the Sustainable Finance Group by the RBI?

Correct Answer: (b) To lead regulatory initiatives on climate-risk.
Solution:

To lead regulatory initiatives on climate risk.