UPSC Essentials | Daily subject-wise quiz : Economy MCQs on India-ASEAN trade, Fully Accessible Route and more (Week 80)

1. It was introduced by the SEBI to alteration non-residents to put successful specified Government of India dated securities.

2. Eligible investors tin put successful specified Government securities taxable to a peculiar concern ceiling.

3. Investments by eligible investors nether the way shall beryllium governed by the provisions of the Foreign Exchange Management Act, 1999.

How galore of the statements fixed supra are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Explanation

— The Reserve Bank, successful consultation with the Government of India, introduced a abstracted channel, called the ‘Fully Accessible Route’ (FAR), for non-resident concern successful Government of India dated securities with effect from April 1, 2020. Hence, connection 1 is not correct.

— This program volition tally alongside the 2 existing pathways, the Medium Term Framework (MTF) and the Voluntary Retention Route (VRR).

— Eligible investors whitethorn put successful circumstantial authorities securities without respect to concern limits. Hence, connection 2 is not correct.

— There volition beryllium nary quantitative restrictions connected eligible investors’ investing successful the specified securities.

— FPIs, Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and different entities entitled to prosecute successful Government Securities nether the Debt Regulations tin proceed to bash truthful done this way arsenic they person previously.

— The investments made by eligible investors utilising the way are taxable to the different conditions of the Foreign Exchange Management Act of 1999. Hence, connection 3 is correct.

Therefore, enactment (a) is the close answer.

(Source: http://www.rbi.org.in)

QUESTION 2

With notation to the India-ASEAN trade, see the pursuing statements:

1. The India-ASEAN commercialized woody was signed successful 2019.

2. ASEAN countries relationship for astir 11 per cent of India’s planetary trade.

3. The worth of India’s exports to ASEAN countries successful 2023-24 was much than the imports for the aforesaid period.

Which of the statements fixed supra is/are correct?

(a) 1 and 3 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3

Explanation

— Amid a widening commercialized shortage with the Association of Southeast Asian Nations (ASEAN), a elder authorities authoritative said that India is facing tariff asymmetry successful the ASEAN agreement and is aiming to implicit the reappraisal by adjacent year.

— During the ongoing 21st ASEAN-India Summit, Prime Minister Narendra Modi highlighted reviewing the India-ASEAN commercialized statement arsenic portion of his 10-point docket to fortify practice betwixt the 2 areas.

— The India-ASEAN commercialized statement was signed successful 2009, and it has go a important supplier of input materials for Indian industry. While thenar lipid and earthy state are sourced successful Indonesia and Malaysia, earthy rubber comes from Thailand. Hence, connection 1 is not correct.

— ASEAN remains an important trading spouse for India, accounting for astir 11% of India’s planetary commerce. Hence, connection 2 is correct.

— India’s exports to ASEAN was $41.2 cardinal successful 2023-24, portion imports were $80 billion. Hence, connection 3 is not correct.

— ASEAN countries see Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Therefore, enactment (b) is the close answer.

QUESTION 3

The word “carry trade” refers to:

(a) to get wealth successful a state wherever the involvement rates are debased and put that wealth successful a state wherever the involvement rates are overmuch higher.

(b) commercialized transactions which are completed wrong an wide play of 9 months

(c) to get a currency with a precocious involvement complaint and put it successful a currency with a little involvement rate.

(d) commercialized which is permitted for exports/imports nether India’s prevailing Foreign Trade Policy (FTP).

Explanation

— Global investors are ever looking for opportunities to marque money. One mode to bash this is to get wealth successful a state wherever the involvement rates are debased and put that wealth (after converting the currency) successful a state wherever the involvement rates are overmuch higher. Simply put, this is called a transportation trade.

— Such possibilities tin originate due to the fact that cardinal banks successful galore nations strive to support involvement rates astatine a level that is due for their ain economical conditions. An illustration is Japan, wherever the cardinal slope (the Bank of Japan) kept involvement rates astatine zero per cent betwixt 2011 and 2016 and has really lowered them adjacent little (-0.10%) since 2016. The extremity down debased involvement rates is to boost economical activity.

— A “cheap money” monetary argumentation has planetary implications. For example, debased involvement rates promote investors to get cheaply successful yen and put successful different nations (such arsenic Brazil, Mexico, India, and adjacent the United States) successful the anticipation of earning higher profits. Such transportation trades are known arsenic yen transportation trades.

Therefore, enactment (c) is the close answer.

QUESTION 4

With notation to the Consumer Price Indices (CPI), see the pursuing statements:

1. It measures changes implicit clip successful the prices of goods and services that households get for consumption.

2. It is wide utilized arsenic a macroeconomic indicator of inflation.

3. It is utilized for indexing dearness allowance to employees for the summation successful prices.

How galore of the statements fixed supra are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Explanation

— Retail inflation accrued to 5.49 per cent successful September from 3.65 per cent the erstwhile month, chiefly owing to expanding nutrient prices. The user terms index-based ostentation complaint was 5.02 per cent successful September 2023.

— Consumer Price Indices (CPIs) way changes successful the outgo of products and services that households bargain for consumption. Hence, connection 1 is correct.

— The CPI is extensively utilized arsenic a macroeconomic ostentation indicator, a instrumentality for governments and cardinal banks to negociate ostentation and show terms stability, and a deflator successful nationalist accounts. Hence, connection 2 is correct.

— CPI is often utilized to scale employees’ dearness allowances successful effect to terms increases. Hence, connection 3 is correct.

— The basal twelvemonth for India’s Consumer Price Index (CPI) is being revised from 2012 to 2024. The caller basal twelvemonth is expected to instrumentality effect successful January 2026.

Therefore, enactment (c) is the close answer.

(Other Source: cpi.mospi.gov.in)

QUESTION 5

Consider the pursuing countries:

1. Netherlands

2. United States

3. Brazil

4. UAE

5. Japan

What is the close chronological bid of these countries (top to bottom) arsenic India’s apical export destination for the play September 2023 to September 2024?

(a) 2—4—1—3—5

(b) 2—5—1—3—4

(c) 1—4—2—3—5

(d) 5—2—4—3—1

Explanation

— A marginal summation successful exports, led by textiles, engineering, and physics goods, which compensated for little petroleum exports, combined with a crisp diminution successful golden imports, helped India’s goods commercialized shortage autumn to a five-month debased of $21 cardinal successful September, down from a ten-month precocious of $30 cardinal successful August.

— In September, India’s exports accrued somewhat to $35 billion, up from $34 cardinal successful September of past year. A changeless summation successful engineering goods exports to Russia and Europe, wherever subject spending is expanding, arsenic good arsenic the shipment of physics items specified arsenic mobile phones to the United States, contributed to full exports.

— The Commerce and Industry Ministry, successful a statement, said India’s apical 5 export destinations successful presumption of maturation successful worth successful September 2024 compared to September 2023 were the Netherlands, the UAE, the US, Brazil, and Japan and the apical 5 import sources, showing maturation successful value, were the UAE, China, Germany, Japan, and Taiwan.

Therefore, enactment (c) is the close answer.

Previous Daily Subject-Wise-Quiz

Daily subject-wise quiz — Polity and Governance (Week 80)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 80)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 80)

Daily subject-wise quiz — Economy (Week 79)

Daily subject-wise quiz – International Relations (Week 79)

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