03 June 2023 Static Quiz

Correct Answer: A
Ans: A the Paris Agreement
● Global Stocktake- It was established under article 14 of the Paris Agreement. The Global
Stocktake is designed to “assess the collective progress towards achieving the purpose of the
Paris Agreement and its long-term goals.”
● The Global Stocktake will evaluate progress at the global level — not the individual country level
— and identify overall trends that should inform countries’ national climate commitments (NDCs),
which are required to be updated at least every five years.
● The purpose of the Global Stocktake is not to create a single point of assessment or a snapshot
in time, but rather a living tool that continually informs countries’ enhanced climate commitments
on issues related to mitigation, adaptation and finance, as well as cross-cutting issues of equity.
● The third and final step of the first Global Stocktake will occur at COP28 in the United Arab
Emirates in 2023. Since the Global Stocktake is set to be completed every five years, this phase
would occur again in 2028 and 2033, etc

Correct Answer: A
Ans: A 1 only
● Industry holds a prominent position in the Indian economy, accounting for 31 percent of GDP,
on average, during FY12 and FY21 and employing over 12.1 crore people. Thus statement 1 is
correct.
● As per the S&P Global India Manufacturing Purchasing Managers’ Index (PMI), the
manufacturing sector in India had its most significant production growth in 13 months in
December 2022.
● For the October to December quarter, the PMI averaged 56.3, the highest in a year. It indicates
that the manufacturing sector is performing well and may be contributing to job creation.
● A PMI above 50 means expansion, while a score below that denotes contraction. A reading at 50
indicates no change. Thus statement 2 is incorrect.
PMI is compiled by IHS Markit for more than 40 economies worldwide.

Correct Answer: A
Ans: A 1 and 2 only
● Convertibility is the ease with which a country’s currency can be converted into gold or
another currency through global exchanges. It indicates the extent to which the regulations allow
inflow and outflow of capital to and from the country.
● Making the rupee a fully convertible currency would mean increased liquidity in financial
markets, improved employment and business opportunities, and easy access to capital.
● With increased participation from global players, new businesses, strategic partnerships, and
direct investments flourish. It also helps in the creation of new employment opportunities across
various industry sectors, as well as nurturing entrepreneurship for new businesses. Thus
statements 1 and 2 are correct.
● Opening of Indian currency at full convertibility would mean a lack of suitable regulatory
control and rates subject to open markets. Therefore, there would be high volatility and thus may
lead to inflation in forex rate, depreciation of Indian currency. Thus 3 is incorrect.
● A rising, unregulated rupee makes Indian exports less competitive in the international markets.
Export-oriented economies like India and China prefer to keep their exchange rates lower to
retain the low-cost advantage. Thus statement 4 is incorrect.

Correct Answer: B
Ans: B 2 and 3 only
● The NDS-OM is an electronic, screen based, anonymous, order driven trading system for
dealing in Government securities owned by RBI. The Reserve Bank owns NDS-OM and CCIL
maintains it. Since other financial institutions cannot own g-sec, thus, statement 1 is incorrect.
● The NDS-OM brings transparency in secondary market transactions in Government securities.
The system ensures complete anonymity among the participants as CCIL acts as the central
counterparty (CCP) for settlement of all the trades. Thus, statement 2 is correct.
● RBI has allowed retail investors to open gilt accounts with the central bank to invest in
Government securities (G-secs) directly.
● Under the scheme (Retail Direct Scheme), retail investors (individuals) will have the facility to
open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with the RBI. thus statement 3
is correct.

Correct Answer: D
Ans: D 1, 2, 3, 4 and 5
● While recommending price policy of various commodities under its mandate, the CACP keeps in
mind the various Terms of Reference (ToR) given to CACP in 2009.
Accordingly, it analyses
1) demand and supply;
2) cost of production;
3) price trends in the market, both domestic and international;
4) inter-crop price parity;
5) terms of trade between agriculture and non-agriculture;
6) a minimum of 50 percent as the margin over cost of production; and
7) likely implications of MSP on consumers of that product.
● It may be noted that cost of production is an important factor that goes as an input in
determination of MSP, but it is certainly not the only factor that determines MSP.
● It takes into account following factors.
-Cost of production
-Changes in input prices
-Input-output price parity
-Demand and supply
-Effect on industrial cost structure
-Effect on the cost of living
-Effect on the general price level
-Parity between prices paid and prices received by the farmers Effect on issue prices and
implications for subsidy.
Thus, all are correct.