[MISSION 2024] RTM(Revision through MCQs)- 3 November 2023

Ans:(c )

Explanation:

• What is the Most Favoured Nation (MFN)?
  • It is a principle in international trade and diplomacy that promotes equal treatment among trading partners. When a country grants MFN status to another, it agrees to extend the same trade privileges and favourable terms to that partner as it does to its most favoured trading partner.
• Explanation:
  • For example, if Country A gives Country B MFN status, it must offer the same trade benefits to Country B as it does to its best trading partner, Country C. This ensures fairness and non-discrimination in international trade.
• Legal Status of MFN:
  • Article 1 of GATT 1994 mandates WTO member countries to grant Most Favoured Nation (MFN) status to each other, ensuring equal trade treatment. There can be exceptions, like bilateral trade agreements and special access for developing nations.
• For instance, India initially granted MFN status to all WTO members, including Pakistan. However, India suspended Pakistan’s MFN status in 2019 due to security concerns, and Pakistan never reciprocated MFN status for India.

Refer: https://www.insightsonindia.com/2023/11/03/indias-most-favoured-nation-mfn-approach/

Ans: (c )

Explanation:

• Context: Kozhikode, a city in Kerala, and Gwalior, a city in Madhya Pradesh, have been included in UNESCO’s Creative Cities Network (UCCN).
• These cities were chosen to represent specific creative fields, with Kozhikode falling under the category of literature and Gwalior under music.
• Indian cities that are part of this network include Varanasi (music), Srinagar (crafts and folk arts), Hyderabad(Gastronomy), Jaipur (Crafts and Folk Arts) and Chennai (music).
• About Kozhikode
  • It has a rich literary tradition and is known for producing prominent writers and cultural figures. The city has a history of significant literary contributions, with the first Malayalam novel, Kundalatha, being authored there in 1887

Refer: https://www.insightsonindia.com/2023/11/03/kozhikode-as-city-of-literature-and-gwalior-as-the-city-of-music/

Ans: (a)

Explanation:

• Context: Bletchley Park, the historic site known for its crucial role in World War II, is hosting the world’s first global summit on artificial intelligence (AI) safety in 2023.
• Britain, along with 28 other countries and the European Union, published the “Bletchley Declaration” at Bletchley Park, England.
• The focus of the Bletchley Declaration:
  • This declaration aims to enhance global collaboration on artificial intelligence (AI) safety. It has a two-fold focus: identifying shared AI-related risks and enhancing scientific understanding of these risks, as well as creating cross-country policies to address them.

Refer: https://www.insightsonindia.com/2023/11/03/bletchley-declaration/

Ans: (b)

Explanation:

• The Minamata Convention on Mercury is a global treaty that aims to address the health and environmental effects of mercury pollution. It is named after the city of Minamata, Japan, where severe mercury poisoning occurred in the mid-20th century.

Refer: https://www.insightsonindia.com/2023/11/03/mercury-contamination/

Ans: (b)

Explanation:’

• The Sinai Peninsula is a desert region located in northeastern Africa, and it is part of Egypt. It is separated from the rest of Egypt by the Suez Canal, which connects the Mediterranean Sea to the Red Sea.

Refer: https://www.insightsonindia.com/2023/11/03/rafah-border-crossing/

Ans: (c )

Explanation:

• Statement 2 is wrong.
• Statement 2: According to Section 7 of the RBI Act, the Central Government may occasionally give the Bank any instructions it deems necessary in the public interest, after consulting with the Bank’s Governor. The Indian Constitution makes no mention of the Central Government’s authority to direct the RBI in the public interest.

Refer: UPSC CSE 2021

Ans: (b)

Explanation:

• During an economic recession, policymakers often implement measures to stimulate the economy and counter the negative effects of the recession. In this context, the option that is most likely to be taken is (b) Increase in expenditure on public projects
• Increasing expenditure on public projects, often referred to as fiscal stimulus, is a common approach to boost economic activity during a recession. This can create jobs and increase demand in the economy, helping to mitigate the effects of the recession.

Refer: UPSC CSE 2021

Ans: (d)

Explanation:

• Indian Government Bond Yields are influenced by the following factors:
• Actions of the United States Federal Reserve: The actions of the U.S. Federal Reserve, such as changes in its interest rates and monetary policy, can have an impact on global financial markets and, in turn, affect Indian bond yields. When the U.S. Federal Reserve adjusts its policy, it can lead to changes in foreign capital flows, affecting the Indian bond market.
• Actions of the Reserve Bank of India: The Reserve Bank of India (RBI) directly influences the Indian bond market. It sets the policy rates in India, and changes in these rates can impact bond yields. The RBI’s actions, such as changes in the repo rate, can influence the overall interest rate environment in India, affecting bond yields.
• Inflation and short-term interest rates: Inflation and short-term interest rates play a crucial role in determining bond yields. Higher inflation expectations and short-term interest rates can lead to higher bond yields to compensate investors for the reduced purchasing power and opportunity cost of holding bonds. Inflation is also a key concern for bond investors, as it erodes the real return on fixed-income securities.
• So, the correct answer is:
• (d) 1, 2, and 3

Refer: UPSC CSE 2021

Ans: (d)

Explanation:

• Black money, which is income not declared for tax purposes, leads to a significant loss of tax revenue for the government. This loss of revenue can have a detrimental impact on the government’s ability to fund public services, infrastructure development, and welfare programs. Therefore, addressing tax evasion and the generation of black money is a top concern for the government.

Refer: UPSC CSE 2021

Ans: (d)

Explanation:

• The creation of new money to finance a budget deficit is likely to be the most inflationary in its effects.
• When a government creates new money to finance its budget deficit, it effectively increases the money supply in the economy. This can lead to demand-pull inflation, as there is more money in circulation chasing the same amount of goods and services. This excess money can drive up prices.

Refer: UPSC CSE 2021