[DAY 33] 60 DAY RAPID REVISION (RaRe) SERIES for UPSC Prelims 2024 – ECONOMY, CURRENT AFFAIRS & CSAT TEST SERIES!

Solution (b)

Solution (c)

Solution (a)

Solution (d)

Solution (b)

Solution (b)

Solution (a)

Solution (a)

Solution (d)

Solution (a)

Solution (c)

Note:

Foreign Portfolio Investment (FPI):

• The Foreign Portfolio Investment (FPI) consists of securities and other financial assets held by the investors in another country.
• It does not provide the investor with direct ownership of a company’s assets and is relatively liquid, depending on the volatility of the market.
• Along with the Foreign Direct Investment (FDI), the FPI is one of the common ways to invest in an overseas economy. The FDI and the FPI are both important sources of funding for most economies.
• On a macro-level, the FPI is a part of a country’s Capital Account and is shown on its Balance of Payments (BOP). The BOP calculates the amount of money flowing from one country to other countries over a financial year.
• The FPI holdings can include stocks, ADRs (the American Depositary Receipts), GDRs (the Global Depositary Receipts), bonds, mutual funds and exchange traded funds.

Solution (d)

There are seven ways the central banks use the foreign exchange reserves.

1. First, the countries use their foreign exchange reserves to keep the value of their currencies at a fixed rate.

• A good example is China, which pegs the value of its currency, the yuan, to the dollar.
• When China stockpiles dollars, it raises the dollar value compared to that of the yuan.
• That makes Chinese exports cheaper than the American-made goods, increasing the sales.

1. Second, those with a floating exchange rate system use reserves to keep the value of their currency lower than the dollar.

• They do this for the same reasons as those with fixed-rate systems.
• Even though Japan’s currency, the yen, is a floating system, the Central Bank of Japan buys U.S. Treasurys to keep its value lower than the dollar.
• Like China, this keeps Japan’s exports relatively cheaper, boosting trade and economic growth.
• Such currency trading takes place in the foreign exchange market.

1. A third and critical function is to maintain liquidity in case of an economic crisis.

• For example, a flood or volcano might temporarily suspend the local exporters’ ability to produce goods.
• That cuts off their supply of foreign currency to pay for imports.
• In that case, the central bank can exchange its foreign currency for their local currency, allowing them to pay for and receive the imports.
• Similarly, the foreign investors will get spooked if a country has a war, military coup, or other blow to confidence.
• They withdraw their deposits from the country’s banks, creating a severe shortage in foreign currency.
• This pushes down the value of the local currency, since fewer people want it.
• That makes imports more expensive, creating inflation.
• The central bank supplies foreign currency to keep the markets steady.
• It also buys the local currency to support its value and prevent inflation.
• This reassures the foreign investors, who return to the economy.

1. A fourth reason is to provide confidence.

• The central bank assures the foreign investors that it is ready to take action to protect their investments.
• It will also prevent a sudden flight to safety and loss of capital for the country.
• In that way, a strong position in the foreign currency reserves can prevent economic crises caused when an event triggers a flight to safety.

1. Fifth, reserves are always needed to make sure a country will meet its external obligations.

• These include international payment obligations, including sovereign and commercial debts.
• They also include the financing of imports and the ability to absorb any unexpected capital movements.

1. Sixth, some countries use their reserves to fund sectors, such as infrastructure.

• China, for instance, has used part of its forex reserves for recapitalizing some of its state-owned banks.

1. Seventh, most central banks want to boost returns without compromising safety.

• They know the best way to do that is to diversify their portfolios.
• They will often hold gold and other safe, interest-bearing investments.

Solution (c)

• An escrow account in simple terms is a third-party account.
• It is a separate bank account to hold money which belongs to others and where the money parked will be released only under the fulfilment of certain conditions of a contract.
• An escrow account is an arrangement for safeguarding the seller against its buyer from the payment risk for the goods or services sold by the former to the latter. This is done by removing the control over cash flows from the hands of the buyer to an independent agent.
• The independent agent, i.e, the holder of the escrow account would ensure that the appropriation of cash flows is as per the agreed terms and conditions between the transacting parties.
• Escrow account has become the standard in various transactions and business deals. In India escrow account is widely used in public private partnership projects in infrastructure.
• RBI has also permitted Banks (Authorized Dealer Category I) to open escrow accounts on behalf of Non-Resident corporates for acquisition / transfer of shares / convertible shares of an Indian company.

Solution (d)

Solution (c)

Three Factors Affecting the Exchange Rates-

1. Interest rates:

• The interest rate paid by a country’s central bank is a big factor.
• The higher interest rate makes that currency more valuable.
• The investors will exchange their currency for the higher-paying one.
• They then save it in that country’s bank to receive the higher interest rate.

1. Money supply:

• The money supply that is created by the country’s central bank.
• If the government prints too much currency, then there is too much of it chasing too few goods.
• The currency holders will bid up the prices of goods and services.
• That creates inflation.
• If way too much money is printed, it causes hyperinflation.
• Some cash holders will invest overseas where there is no inflation, but they will find that there is not as much demand for their currency, since there is so much of it.
• That is why inflation can push the value of a currency down.

1. Financial stability:

• Country’s economic growth and financial stability impact its currency exchange rates.
• If the country has a strong, growing economy, then the investors will buy its goods and services.
• They will need more of its currency to do so. If the financial stability looks bad, they will be less willing to invest in that country.
• They want to be sure they will get paid back if they hold the government bonds in that currency.
• Because of these factors, the demand for a country’s currency depends on what is happening in that country.

Solution (b)

Note:

Contestable Market Theory:

• ‘The Contestable Market Theory‘ is an economic concept stating that the companies with a few rivals behave in a competitive manner, when the market they operate in has weak barriers to entry.
• ‘Contestable‘ in economics means that a company can be challenged or contested by the rival companies looking to enter the industry or the market.
• In other words, a Contestable Market is a market whereby the companies can enter and leave freely with low sunk costs.
• Sunk costs are major irrecoverable costs to enter an industry, such as the purchase of a manufacturing plant or equipment.
• The Contestable Market Theory assumes that even in a monopoly or oligopoly (It is a market form wherein a market or an industry is dominated by a small group of large sellers), the dominant companies will act competitively when there is a lack of barriers for the competitors.
• Dominant players in an industry will do everything to reduce the contestability of their industry by preventing new entrants from driving them out of business.
• The features of a Contestable Market include:

1. There are no barriers to entry or exit barriers.
2. There are no sunk costs, i.e.; the costs that have already been incurred and cannot be recovered.
3. Both the incumbent firms and new entrants have access to the same level of technology.
4. The continuous risk of new entrants emerging and stealing market share leads the incumbents to focus more on maximizing sales rather than profits.
5. They realize that if they are too profitable, an entrant could easily come and undercut their business.

Solution (a)

Solution (b)

Solution (a)

Exchange Traded Fund (ETF):

• The Exchange Traded Fund (ETF) is a fund that is created by pooling together the assets and then dividing this cumulated asset into individual units that are traded on the stock exchange.
• The value of the ETF comes from the value of the underlying assets (shares of stock, bonds, foreign currency, etc.).
• These ETFs, listed in the stock exchanges, are similar to shares and can be traded like ordinary shares.
• In nature, the ETFs are Index Funds, because they comprise shares of different companies.
• The share-based ETFs, issued by the government, include CPSE ETF and Bharat-22 ETF.
• These share-based ETFs enable the government to undertake the disinvestment in multiple PSUs at a single time and hence, reduces the time for undertaking disinvestment.
• This is the main reason for the higher preference of the government towards the ETF route for undertaking disinvestment.

Solution (a)

Panda Bonds:

• The Panda Bonds are the Yuan-denominated bonds issued in the Chinese mainland market by an overseas entity.
• They are usually issued by the foreign companies and the Chinese companies operating overseas to raise capital.
• The International Finance Corporation and the Asian Development Bank have issued the Panda Bonds in 2005.
• Besides, countries like the Philippines and most recently, Pakistan have issued the Panda Bonds.

Solution (c)

• Iyothee Thass Pandithar was a prominent anti-caste activist and a practitioner of Siddha medicine. Hence statement 1 is correct.
• He was born on 20 May 1845 in Madras presidency.
• He established the Advaidananda Sabha and launched a magazine called Dravida Pandian. Hence statement 2 is correct.
• He established the “Dravida Mahajana Sabha ” in 1891 along with Rettamalai Srinivasan.
• He organized the Todas and other tribes of the Nilgiri Hills into a formidable force for the freedom movement. Hence statement 3 is correct.
• He established the Sakya Buddhist Society in Madras with branches all over South India. Hence statement 4 is incorrect.
• The Sakya Buddhist Society was also known as the Indian Buddhist Association and was established in the year 1898. To manage and coordinate the functioning of the society, he began a weekly magazine, Tamizhan in 1907.

Solution (c)

• Mumps is a contagious disease caused by a paramyxovirus. Hence statement 1 is correct.
• It can cause the parotid glands, the ones on each side of the face to swell and they may also be tender or painful.
• It is an acute disease that infects children and young adults. Hence statement 2 is correct.
• Humans are the only known host for the mumps virus, which is spread via direct contact or by airborne droplets from the upper respiratory tract of infected individuals.
• There is no specific treatment for mumps. Hence statement 3 is correct.
• The various symptoms may be relieved with medicines. The best way to protect kids is to make sure they’re immunized against mumps.

Solution (c)

The otolith is a stony lump in the fish ear. These are much like tree rings which reveal fish’s age. Different forms or isotopes of oxygen in the otolith indicate the temperature the fish experienced when it was alive. Carbon isotopes reveal how quickly food is converted into energy. Fish carry their fitness trackers in their ears. They are commonly known as “ear stones,” which are hard, calcium carbonate structures located directly behind the brains of bony fishes.

The different types of otoliths that aid fish in balance and hearing are:

• Sagitta is involved in the detection of sound and the process of hearing, or converting sound waves into electrical signals. Hence statement 1 is correct.
• Asteriscus is involved in the detection of sound and the process of hearing. Hence statement 2 is correct.
• Lapillus is involved in the detection of gravitational force and sound. Hence statement 3 is correct.

Solution (b)

• The Codex Alimentarius Commission is an international food safety and quality standard-setting body. Hence statement 1 is correct.
• Its objective is protecting consumer’s health and ensuring fair practices in the food trade.
• It was created by the World Health Organisation and the Food and Agriculture Organization of the United Nations. Hence statement 2 is correct.
• It consists of 189 member countries. Its membership is open to all Member Nations and Associate Members of FAO and WHO which are interested in international food standards.
• It meets in regular sessions once a year alternating between Geneva and Rome. Hence statement 3 is incorrect.

Solution (a)

• The Indian tent turtle (Pangshura tentoria) is a species of turtle in the family Geoemydidae.
• It is an active swimmer and a mainly herbivorous species.
• Its habitats include still water pools on the riverside and slow-running water near the river banks.
• It is native to India, Nepal, and Bangladesh.
• The Indian Tent Turtle is listed as least concern on the IUCN Red List. Hence statement 1 is incorrect.
• It is protected under Schedule I of the Wildlife Protection Act of 1972. Hence statement 2 is correct.
• It is listed under the Appendix II of the CITES. Hence statement 3 is incorrect.

Solution (b)

• De Winton’s Golden Mole is an elusive blind mole endemic to South Africa that swims through sand and lives in inaccessible burrows. Hence statement 1 is incorrect.
• It has only ever been recorded in one location – Port Nolloth, on South Africa’s northwest coast – where it was last sighted in 1937.
• Its natural habitats are subtropical dry shrubland, Mediterranean-type shrubby vegetation, and sandy shores. Hence statement 2 is correct.
• The upper parts have short, dense fur that is slate grey with a yellowish tinge. Individual hairs have grey bases, whitish shafts, and fawn tips.
• The face, cheeks, and lips have a more intense yellowish tinge. The underparts are rather paler than the upper parts, with individual hairs having white tips.
• It is currently the only golden mole species listed as critically endangered on the IUCN List. Hence statement 3 is correct.
• It is among the 25 “most wanted lost” species that are the focus of Global Wildlife Conservation’s “Search for Lost Species” initiative.

Solution (c)

• Operation Storm Makers II was conducted by Interpol in which India was a participant. Hence statement 1 is correct.
• Human trafficking-fuelled frauds are expanding beyond Southeast Asia.
• Victims are lured by fake job ads and forced to commit online fraud such as – Fake cryptocurrency investments, Work-from-home scams, and Lottery and online gambling scams.
• It aims to target fraud schemes fuelled by victims of human trafficking. Hence statement 2 is correct.

Solution (b)

• Abelmoschus Odishae is a new plant species of ‘wild okra’ discovered in a moist deciduous forest in Odisha. Hence statement 1 is incorrect.
• It can be used for hybridisation to create a better variety with high disease resistance.
• It can also play a vital role in widening the genetic base of okra.
• Indian Council of Agricultural Research (ICAR) is an autonomous organisation under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture, and Farmers Welfare. Hence statement 2 is correct.
• It was formerly known as the Imperial Council of Agricultural Research, it was established on 16 July 1929, as a registered society under the Societies Registration Act, 1860. It is responsible for coordinating agricultural education and research in India.

Solution (c)

• Red Sea is the world’s northernmost tropical sea which lies between Asia and Africa. Hence statement 1 is correct.
• It is connected to the Arabian Sea and the Indian Ocean to the south through the Gulf of Aden and the narrow strait of Bab el-Mandeb.
• Reef systems are better developed along the sea because of their greater depths and efficient water circulation patterns. Hence statement 2 is correct.
• Its well-known islands include Tiran Island, which is located near the mouth of the Gulf of Aqaba, and Shadwan Island, which is located at the entrance of the Gulf of Suez.
• Yemen and Saudi Arabia border the Red Sea to the east.
• It is bordered by Egypt to the north and west and by Sudan, Eritrea, and Djibouti to the west. Hence statement 3 is correct.

Solution (c)

• Mohenjo Daro lies in Pakistan’s Sindh province, on the bank of the Indus River. Hence statement 1 is correct.
• The people of Mohenjo-Daro lived in houses that had similar features throughout the town. They consisted of a central courtyard surrounded by rooms. Almost every household had individual toilets and bathrooms.
• It was divided into two parts – the citadel and the lower town. Hence statement 2 is correct.
• The western mound, or Citadel was built on a raised platform of mud brick and consisted of all the important administrative structures like The Great Bath, granaries, and the College of Priests.
• It was fortified by a thick mud-brick retaining wall.
• The eastern or low-lying part of the town was also fortified and was meant for the settlement of commoners.
• Numerous streets and small alleys ran across this part of the city.
• Within this section, many sub-parts were built according to the guild systems.
• As people settled here, a large number of artifacts and information regarding the burial practices were found in this area.
• Its ruins were designated a UNESCO World Heritage Site in 1980. Hence statement 3 is correct.
• It was laid out in a rectilinear grid and built out of baked bricks, the city featured a complex water management system, complete with a sophisticated drainage and covered sewer system, and baths in nearly every house.

Solution (b)

We know from the details of the question that the ratio of the numbers = 1: 1/2: 1/5

Taking LCM we get the ratio = 10: 5: 2

The total of the ratios = 17

Second number = 5/17 × 85 = 25

Solution (a)

Persons worked (M1) = 105

Number of hours each person worked per day (H1) = 8

Number of days they worked (D1) = 30

Work completed (W1)= 2/5

Remaining days (D2)= 60 – 30 = 30

Remaining Work to be completed (W2) = (1 – 2/5 ) = 3/5

Let the total number of persons who do the remaining work (M2) = x

Number of hours each person needs to be work per day (H2) = 9

= M1D1H1/W1 = M2D2H2/W2

= (105×30×8)/ (2/5) =

(x×30×9)/ (3/5) => x = 140

So, additional person = 140 – 105 = 35

Solution (b)

Many factors like control of effluents and dumping of construction material, removing the encroachments from the flood plains, proper monitoring of water quality etc. are needed to improve the quality of the water of a river. The impact of climate change has not been discussed in the passage. Keeping these things in the mind, the most appropriate among the given answer options is option B.

Solution (b)

The passage begins by mentioning the structure of Indian population vis-a-vis its income, which has a pyramidal pattern. The terms “big head” and “fat belly” refer to the change in this pyramidal pattern. “Heavy belly” refers to a dramatic increase in the size of the lower middle class, and “big head” refers to rising income inequality.

Option C might seem a little confusing. The passage talks about income distribution, not the number of people as a function of their ages. Hence, option C is incorrect.

Solution (a)

Option A is correct. Throughout the passage it can be seen that the author is explaining how Kabir‘s thoughts have been incorporated by various religions in India. For example, he is celebrated as a Dalit hero or a Brahmin. His poems which reflected his thoughts are included in Guru Granth Sahib (Sikhs). Similar connection with other religions like Christianity, Jainism and Islam is also established in the passage.

Option B is incorrect. The passage only explains how Kabir‘s thoughts have been included in various religions around India. It nowhere mentions whether Kabir supported any religion or not. Hence, this statement is not correct.

Option C is incorrect. Though the passage mentions in the beginning, “He can be celebrated as Dalit hero or as a Brahmin”, it cannot be conclusively established from this paragrapn that Kabir advocated equality between different castes. Also there is no mention of untouchability in the passage. Hence, this statement is not correct.

Option D is incorrect. The passage mentions the presence of Kabir’s thoughts in Islam through the statement, “His presence in Indian Islamic thought, Qawwali singing and architecture has also been well documented”. But, the passage does not argue that his presence in Islamic thought is more prominent than that in other religions.