15 questionswith explanationsfor RAS, Patwari, VDO and other Rajasthan exams
The International Monetary Fund (IMF) and the World Bank (IBRD) were created as an outcome of which conference held in 1944?
Answer: (2) Bretton Woods Conference
Explanation
The IMF and the IBRD were conceived at the Bretton Woods Conference (New Hampshire, USA) in July 1944; both are headquartered in Washington, D.C.
The World Trade Organization (WTO), headquartered in Geneva, came into existence on 1 January 1995, replacing:
Answer: (4) GATT
Explanation
The WTO, set up under the Marrakesh Agreement after the Uruguay Round, replaced the General Agreement on Tariffs and Trade (GATT, 1947).
The New Development Bank (NDB), set up by the BRICS countries, has its headquarters at:
Answer: (3) Shanghai
Explanation
The NDB agreement was signed at the BRICS summit in Fortaleza (Brazil) in 2014; the bank is headquartered in Shanghai, China.
Consider the following statements about the Asian Infrastructure Investment Bank (AIIB): 1. Its headquarters is in Beijing. 2. It began operations in 2016. 3. India is its largest shareholder. Which of the statements given above is/are correct?
Answer: (1) 1 and 2 only
Explanation
AIIB, headquartered in Beijing, began operations in January 2016. China is the largest shareholder; India, a founding member, is the second largest.
Consider the following statements about the World Bank Group: 1. The International Development Association (IDA) gives concessional loans and grants to the poorest countries. 2. India is a member of the International Centre for Settlement of Investment Disputes (ICSID). 3. The Multilateral Investment Guarantee Agency (MIGA) provides political risk insurance to investors. Which of the statements given above is/are correct?
Answer: (3) 1 and 3 only
Explanation
IDA is the World Bank's concessional arm and MIGA offers political risk insurance; India is not a member of ICSID.
In India's balance of payments, money sent home by Indians working abroad (private remittances) is recorded in the:
Answer: (1) Current account
Explanation
Private remittances are unilateral transfers (secondary income) and form part of the current account.
With reference to India's balance of payments, consider the following statements: 1. Export of software services is recorded in the capital account. 2. External commercial borrowings (ECBs) are recorded in the capital account. 3. Interest paid on external debt is recorded in the current account. Which of the statements given above is/are correct?
Answer: (2) 2 and 3 only
Explanation
Services exports and interest payments (primary income) belong to the current account, while borrowings such as ECBs are capital account flows.
Under India's foreign investment rules, an investment by a foreign investor in a listed Indian company is treated as FDI (rather than FPI) if it is at least what share of the post-issue paid-up equity capital?
Answer: (4) 10 per cent
Explanation
Investment of 10% or more of post-issue paid-up equity of a listed company is FDI; below 10% it is FPI (as recommended by the Arvind Mayaram committee).
Which of the following is NOT a component of India's foreign exchange reserves as reported by the RBI?
Answer: (2) External commercial borrowings of companies
Explanation
India's forex reserves comprise foreign currency assets, gold, SDRs and the reserve tranche position in the IMF; corporate ECBs are external debt, not reserves.
The Asian Development Bank (ADB), established in 1966, has its headquarters at:
Answer: (1) Manila
Explanation
The ADB, founded in 1966, is headquartered in Manila, Philippines; Japan and the USA are its largest shareholders.
Under a fixed exchange rate system, a deliberate reduction by the government in the official value of its currency against foreign currencies is called:
Answer: (3) Devaluation
Explanation
Devaluation is an official cut in a currency's value under a fixed regime; depreciation is a market-driven fall under a floating regime.
Arrange the following institutions in chronological order of their establishment: 1. World Trade Organization 2. International Development Association 3. New Development Bank 4. International Finance Corporation Select the correct answer using the code below:
Answer: (2) 4, 2, 1, 3
Explanation
IFC was set up in 1956, IDA in 1960, the WTO in 1995 and the NDB in 2015 (agreement signed 2014).
Under the WTO Agreement on Agriculture, 'Green Box' subsidies are those that:
Answer: (4) Cause no or minimal trade distortion and are not capped
Explanation
Green Box support causes minimal trade distortion and is allowed without limits; the Blue Box covers production-limiting payments and the Amber Box covers trade-distorting support.
Which of the following currencies is NOT included in the basket that determines the value of the IMF's Special Drawing Rights (SDR)?
Answer: (3) Swiss franc
Explanation
The SDR basket has five currencies: US dollar, euro, Chinese renminbi (added in 2016), Japanese yen and pound sterling.
The Foreign Exchange Management Act (FEMA), 1999 replaced which earlier law?
Answer: (1) Foreign Exchange Regulation Act, 1973
Explanation
FEMA, 1999 (in force from June 2000) replaced the stricter Foreign Exchange Regulation Act (FERA), 1973.