631: Which one of the following groups of items is included in India's foreign exchange reserves?
(a) Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries
(b) Foreign-currency assets, gold holdings of the RBI and SDRs
(c) Foreign-currency assets, loans from the World Bank and SDRs
(d) Foreign-currency assets, gold holdings of the RBI and loans from the World Bank
Explanation:
India's foreign exchange reserves comprises of:
-Foreign currency assets ( US dollar, euro, pound sterling, Canadian dollar, Australian dollar etc. )
-Gold
-Special drawing rights (SDRs) in the IMF
-Reserve Tranche Position (RTP) in the IMF
Hence the closest answer option is (b)
See India Year Book 2013 Page 334, last two lines.
632: Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?
(a) Curbing imports of non-essential goods and promoting exports
(b) Encouraging Indian borrowers to issue rupee denominated Masala Bonds
(c) Easing conditions relating to external commercial borrowing
(d) Following an expansionary monetary policy
Explanation:
i. Curbing imports of non essential goods will lessen the demand for dollars and promoting export will help in increasing the flow of dollars into the country - helping control rupee depriciation.
ii. The Masala bond is directly pegged to the Indian Currency. If Indian borrowers issues more rupee denominated Masala bonds, this would increase liquidity in the market or increase in the rupee stock against few currencies in the market and this would help in supporting the rupee.
iii.ECB- it is a type of loan in foreign currencies, made by non-resident lenders. Thus easing conditions of ECB's helps in receiving more loans in foreign currencies that would in increase of forex inflow - leading to rupee appreciation.
iv. Expansionary Monetary Policy- A set of policy measures such as increase in money supply by the RBI to stimulate economy. It cannot influece the variations of rupee value.
Source: https://www.thehindu.com/business/Economy/curb-on-imports-to-bring-rupee-to-68-70-level-department-of-economic-affairs/article25019942.ece
The Hindu, Economic Times, Business today Explanation: Self
633: Which one of the following is likely to be the most inflationary in its effect?
(a) Repayment of public debt
(b) Borrowing from the public to finance a budget deficit
(c) Borrowing from banks to finance a budget deficit
(d) Creating new money to finance a budget deficit
Explanation:
Printing or creating new money to finance a budget deficit will be the most inflationary effect. Because it increases money supply without any increase in production of goods and services.
For example : Germany suffered Hyperinflation when government started printing money just to pay Ist war reparation (compensation) costs under Treaty of Versailles.
So option (d) will be its answer.
634: Consider the following statements:
The Reserve Bank of Indias recent directives relating to Storage of Payment System Data, popularly known as data diktat, command the payment system providers that
1. they shall ensure that entire data relating to payment systems operated by them are stored in a system only in India
2. they shall ensure that the systems are owned and operated by public sector enterprises
3. they shall submit the consolidated system audit report to the Comptroller and Auditor General of India by the end of the calendar year
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 1, 2 and 3
Explanation:
The Storage of Payment System Data directive issued by RBI requires all System Providers to ensure that the entire data relating to payment systems operated by them are stored in a system in India only. Also, System Providers shall provide a System Audit Report (SAR) and the audit should be conducted by CERT-IN empaneled auditors.
Source: RBI Website: https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11244
635: Three of the following criteria have contributed to the recognition of western Ghats-Sri Lanka and Indo-Burma regions as hotspots of biodiversity:
1. Species richness
2. Vegetation density
3. Endemism.
4. Ethno-botanical importance
5. Threat perception
6. Adaptation of flora and fauna to warm arid humid conditions
Which three of the above are correct criteria in this context?
(a) 1, 3 and 5
(b) 3, 4 and 6
(c) 1, 2 and 6
(d) 2, 4 and 6
Explanation:
The total number of plants that are endemic to an area is one of the two primary criteria for determining biodiversity hotspot status. To bedesignated as a hotspot, an area must have at least 1,500 species of endemic plants. Many hotspots exceed this number by thousands. Sundaland and the Tropical Andes, for example, each have 15,000 endemic plants. In total, hotspots hold at least 150,000 plants as endemics, representing a remarkable 50% of the world's vascular plant species. This is an absolute minimum, because it does not include species that are endemic to the combined area of two or more hotspots.
Another form of measurement, which is perhaps a better indicator of the importance of a particular hotspot, is the percentage of endemic plants compared to hotspot's total plant diversity, For example, among the 13,000 plants species found in Madagascar and the Indian Ocean Islands, 11,600 are endemics, a remarkable 89%. These data are given in each of the individual hotspot sections.