UPSC Civil Services (IAS) Prelims Exam will be conducted on 7 August 2016 and it is a high time to start practicing the IAS Prelims Like Subject Questions which can make them more comfortable to the Multiple Choice Questions. Economy Questions are one of the area where the candidates can practice the concepts related to Indian Economy and enhance their preparation.
Q.1 Consider the following statements
1. PTA originated since the establishment of of WTO
2. Free trade agreements led to increased imports than exports.
Select the correct answer from the following codes
a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
Answer: b
Explanation: Preferential Trade Agreements (PTAs) have been proliferating, especially since the establishment of the World Trade Organisation (WTO) in 1994. FTAs have led to increased imports and exports, although the former has been greater.
Q.2 Which of the following is/are true about free trade agreement?
1. Reduced tariff for members
2. Common tariff rates for trade with non members
3. Among members movement of factors of production is relatively free
Select the correct answer from the following codes
a. Only 1
b. Only 1 and 2
c. Only 2 and 3
d. 1,2 and 3
Answer: a
Explanation: A free trade agreement is a preferential arrangement in which members reduce tariffs on trade among themselves, while maintaining their own tariff rates for trade with non members.
Q.3 Consider the following statements
1. Customs union(CU) is independent form of PTA, though it is a trade integration agreement.
2. In customs union members apply common external tariff schedule to imports from non members.
Select the correct answer from the following codes
a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
Answer: b
Explanation: A customs union (CU) is a free-trade agreement in which members apply a common external tariff (CET) schedule to imports from non members. The five forms of PTA are A. Partial Scope Agreement (PSA) B. Free Trade Agreement (FTA) C. Customs Union (CU) D. Common Market (CM) E. Economic Union (EU).
Q.4 Which of the following is/are features of Economic union?
1. Common market
2. Common macroeconomic policies
3. Common exchange rate policies
Select the correct answer from the following codes
a. Only 1
b. Only 1 and 2
c. Only 2 and 3
d. 1,2 and 3
Answer: d
Explanation: An economic union is a common market where member countries coordinate macro-economic and exchange rate policies.
Q.5 With which of the following countries India signed bilateral FTA ?
1. Afghanistan
2. Nepal
3. Pakistan
Select the correct answer from the following codes
a. Only 1
b. Only 1 and 2
c. Only 2 and 3
d. 1,2 and 3
Answer: b
Explanation: India has made use of FTAs as a key component of its trade and foreign policy, especially from 2003-04 onwards. India has mainly focused on partnering with other Asian countries, and in goods more so than in services. Within Asia, India has signed bilateral FTAs with SriLanka 1998), Afghanistan (2003), Thailand (2004), Singapore (2005), Bhutan (2006), Nepal (2009), Korea (2009), Malaysia (2011) and Japan (2011).
Q.6 Consider the following statements
1. India has two independent regional trade agreement SAFTA and ASEAN.
2. All WTO members have concluded atleast one PTA.
Select the correct answer from the following codes
a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
Answer: a
Explanation: India have also signed two regional trade agreements, the South Asian Free Trade Agreement (SAFTA, 2004) and the India-Association of Southeast Asian Nations Agreement (ASEAN, 2010). Outside Asia, FTAs have been agreed with Chile (2006) and MERCOSUR (2004). All WTO members except Mongolia have concluded at least one PTA, while some, such as the European Union, Chile, and Mexico, have concluded more than 20.
Q.7 Consider the following statements regarding Mega regional agreements
1. Trans-Pacific Partnership (TPP) has been signed and ratified by member countries. Trans- Atlantic Trade and Investment partnership (TTIP) has been signed by member countries but not ratified.
2. India is member of TTIP but not TPP.
Select the correct answer from the following codes
a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
Answer: d
Explanation: The two major mega regionals are the Trans-Pacific Partnership (TPP), which has been signed but not yet ratified by member countries, and the Trans- Atlantic Trade and Investment partnership (TTIP), which is currently being negotiated. The TPP will cover 40 percent of global GDP2 and 33 percent of world trade3. TTIP, when concluded, will be a PTA between the United States and the European Community of 27 member states. India is not part of these groupings (although it has its own PTAs with members of TPP and TTIP) and will hence be outside these large trade zones.
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