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The Current Affairs questions are based on sources like ‘The Hindu’, ‘Indian Express’ and ‘PIB’, which are very important sources for UPSC Prelims Exam. The questions are focused on both the concepts and facts. The topics covered here are generally different from what is being covered under ‘Daily Current Affairs/Daily News Analysis (DNA) and Daily Static Quiz’ to avoid duplication. The questions would be published from Monday to Saturday before 2 PM. One should not spend more than 10 minutes on this initiative.
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Consider the possible effects of increase in inflation
Select the correct statement(s)
Solution (c)
Statement Analysis:
| Statement 1 | Statement 2 | Statement 3 |
| Incorrect | Incorrect | Correct |
| Understanding Repo Rate in Relation to Inflation:
Repo Rate, short for repurchase rate, is the interest rate at which the central bank lends money to commercial banks against government securities. Control Mechanism: Influence on Borrowing Costs: Changes in the Repo Rate affect the cost of borrowing for commercial banks. When the central bank raises the Repo Rate, borrowing becomes more expensive for banks. This, in turn, can lead to higher interest rates for consumers and businesses. Impact on Consumer Spending and Investment:
As borrowing costs rise, consumers may reduce spending, and businesses may cut back on investments. This reduction in spending and investment can contribute to a decrease in the overall demand for goods and services in the economy leading curbing Excessive Inflation:
|
Inverse Relationship:
Generally, there is an inverse relationship between bond yields and inflation.
Real and Nominal Yields: Bond yields can be categorized into nominal yields and real yields. Nominal yields represent the stated interest rate on the bond, while real yields adjust for inflation. Real yields can be calculated by subtracting the inflation rate from the nominal yield. Example:
Let’s consider a scenario where an investor holds a bond with a nominal yield of 5%. If inflation is 2%, the real yield of the bond would be 3% (5% – 2%). However, if inflation increases to 4%, the real yield would decrease to 1% (5% – 4%). Impact on Bond Prices:
Rising inflation expectations can lead to higher interest rates in the economy. As market interest rates increase, existing bonds with lower yields become less attractive. Investors may demand higher yields, causing the prices of existing bonds to fall. |
Central banks often use open market operations, including the sale of government bonds, as a tool to manage inflation within an economy.
Open Market Operations: Open market operations refer to the buying or selling of government securities in the open market by a central bank. Selling government bonds is a contractionary monetary policy tool used to reduce the money supply and counteract inflationary pressures.
Absorbing Excess Liquidity: When the central bank sells government bonds, it absorbs money from the financial system. By reducing the supply of money in circulation, the central bank aims to control inflation, as excessive liquidity can contribute to rising prices. |
Context: India’s retail inflation eased to a three-month low of 5.1% recently.
Solution (c)
Statement Analysis:
| Statement 1 | Statement 2 | Statement 3 |
| Incorrect | Incorrect | Correct |
| Understanding Repo Rate in Relation to Inflation:
Repo Rate, short for repurchase rate, is the interest rate at which the central bank lends money to commercial banks against government securities. Control Mechanism: Influence on Borrowing Costs: Changes in the Repo Rate affect the cost of borrowing for commercial banks. When the central bank raises the Repo Rate, borrowing becomes more expensive for banks. This, in turn, can lead to higher interest rates for consumers and businesses. Impact on Consumer Spending and Investment:
As borrowing costs rise, consumers may reduce spending, and businesses may cut back on investments. This reduction in spending and investment can contribute to a decrease in the overall demand for goods and services in the economy leading curbing Excessive Inflation:
|
Inverse Relationship:
Generally, there is an inverse relationship between bond yields and inflation.
Real and Nominal Yields: Bond yields can be categorized into nominal yields and real yields. Nominal yields represent the stated interest rate on the bond, while real yields adjust for inflation. Real yields can be calculated by subtracting the inflation rate from the nominal yield. Example:
Let’s consider a scenario where an investor holds a bond with a nominal yield of 5%. If inflation is 2%, the real yield of the bond would be 3% (5% – 2%). However, if inflation increases to 4%, the real yield would decrease to 1% (5% – 4%). Impact on Bond Prices:
Rising inflation expectations can lead to higher interest rates in the economy. As market interest rates increase, existing bonds with lower yields become less attractive. Investors may demand higher yields, causing the prices of existing bonds to fall. |
Central banks often use open market operations, including the sale of government bonds, as a tool to manage inflation within an economy.
Open Market Operations: Open market operations refer to the buying or selling of government securities in the open market by a central bank. Selling government bonds is a contractionary monetary policy tool used to reduce the money supply and counteract inflationary pressures.
Absorbing Excess Liquidity: When the central bank sells government bonds, it absorbs money from the financial system. By reducing the supply of money in circulation, the central bank aims to control inflation, as excessive liquidity can contribute to rising prices. |
Context: India’s retail inflation eased to a three-month low of 5.1% recently.
With reference to ‘Stem Cell Therapy’, consider the following statements:
Statement 1: Stem Cell Therapy involves the use of specialized cells to replace or repair damaged tissues, offering a promising approach for medical treatment.
Statement 2: It primarily relies on induced pluripotent stem cells, which are manipulated to differentiate into specific cell types for therapeutic purposes.
Which one of the following is correct in respect to the above statements?
Solution (c)
Statement Analysis:
Statement 1: This statement is correct. Stem cell therapy does indeed involve using specialized cells to replace or repair damaged tissues. While it’s an emerging field with promise, its applications are still under development and not yet widely available for every condition.
Statement 2: This statement is incorrect. While induced pluripotent stem cells (iPSCs) are being explored in research, they are not the primary source of cells used in current stem cell therapy practices.
Here’s a breakdown of the reasons why Statement 2 is inaccurate:
Therefore, while Stem Cell Therapy is promising, relying primarily on iPSCs is not an accurate representation of its current state.
Context: Through more equitable investments, researchers hope menstruation will be recognised as a new frontier in regenerative medicine.
Solution (c)
Statement Analysis:
Statement 1: This statement is correct. Stem cell therapy does indeed involve using specialized cells to replace or repair damaged tissues. While it’s an emerging field with promise, its applications are still under development and not yet widely available for every condition.
Statement 2: This statement is incorrect. While induced pluripotent stem cells (iPSCs) are being explored in research, they are not the primary source of cells used in current stem cell therapy practices.
Here’s a breakdown of the reasons why Statement 2 is inaccurate:
Therefore, while Stem Cell Therapy is promising, relying primarily on iPSCs is not an accurate representation of its current state.
Context: Through more equitable investments, researchers hope menstruation will be recognised as a new frontier in regenerative medicine.
With reference to “Minimum Support Price (MSP)’’ consider the following statements
Select the INCORRECT statement(s)
Solution (b)
| Statement 1 | Statement 2 |
| Correct | Incorrect |
| Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.MSP protects the producer- farmers against distress sale during bumper production years.
MSPs have no statutory backing — a farmer cannot demand MSP as a matter of right. The Centre announces the MSP for 22 mandated crops.These include: 14 kharif crops (paddy, jowar, bajra, maize, ragi, tur/arhar, moong, urad, groundnut, soyabean, sunflower, sesamum, niger seed, cotton), 6 rabi crops (wheat, barley, gram, masur/lentil, rapeseed and mustard,and safflower) and 2 commercial crops (jute and copra). Fair and Remunerative Price (FRP) FRP is the minimum price at which the sugar mills purchase sugarcane from farmers. |
The Cabinet Committee of Economic Affairs announces the MSP at the start of each sowing season, taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP). |
Context: Several farmer associations, from Punjab and Haryana, are marching to Delhi, seeking a law to guarantee the minimum support price (MSP) for their produce.
Solution (b)
| Statement 1 | Statement 2 |
| Correct | Incorrect |
| Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.MSP protects the producer- farmers against distress sale during bumper production years.
MSPs have no statutory backing — a farmer cannot demand MSP as a matter of right. The Centre announces the MSP for 22 mandated crops.These include: 14 kharif crops (paddy, jowar, bajra, maize, ragi, tur/arhar, moong, urad, groundnut, soyabean, sunflower, sesamum, niger seed, cotton), 6 rabi crops (wheat, barley, gram, masur/lentil, rapeseed and mustard,and safflower) and 2 commercial crops (jute and copra). Fair and Remunerative Price (FRP) FRP is the minimum price at which the sugar mills purchase sugarcane from farmers. |
The Cabinet Committee of Economic Affairs announces the MSP at the start of each sowing season, taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP). |
Context: Several farmer associations, from Punjab and Haryana, are marching to Delhi, seeking a law to guarantee the minimum support price (MSP) for their produce.
‘M87’ which was recently in news is a
Solution (a)
About Black Hole
About Event Horizon Telescope (EHT)
Context: The Event Horizon Telescope (EHT) Collaboration has released new images of M87, the supermassive black hole at the center of the galaxy Messier 87.
Solution (a)
About Black Hole
About Event Horizon Telescope (EHT)
Context: The Event Horizon Telescope (EHT) Collaboration has released new images of M87, the supermassive black hole at the center of the galaxy Messier 87.
With reference to ‘North Atlantic Treaty Organization (NATO)’ consider the following statements
How many statement(s) given above are correct
Solution (a)
Statement Analysis:
| Statement 1 | Statement 2 | Statement 3 |
| Incorrect | Correct | Incorrect |
| The foundations of NATO were officially laid down in 1949 to counter the Soviet Union with Cold War tensions rising with the signing of the North Atlantic Treaty, more popularly known as the Washington Treaty
Military: NATO is committed to the peaceful resolution of disputes. If diplomatic efforts fail, it has the military power to undertake crisis-management operations. These are carried out under the collective defense clause of NATO’s founding treaty – Article 5 of the Washington Treaty or under a United Nations mandate, alone or in cooperation with other countries and international organisations.. |
NATO currently has 31 members – most of them European nations, plus the United States and Canada. | The newest member is Finland, which joined in 2023 in reaction to Russia’s 2022 invasion of Ukraine.
Sweden applied to join along with Finland but is waiting for Hungary to ratify its application as the final major step before membership. |
Context: Former US President Donald Trump accused NATO allies of not spending enough on defence..
Solution (a)
Statement Analysis:
| Statement 1 | Statement 2 | Statement 3 |
| Incorrect | Correct | Incorrect |
| The foundations of NATO were officially laid down in 1949 to counter the Soviet Union with Cold War tensions rising with the signing of the North Atlantic Treaty, more popularly known as the Washington Treaty
Military: NATO is committed to the peaceful resolution of disputes. If diplomatic efforts fail, it has the military power to undertake crisis-management operations. These are carried out under the collective defense clause of NATO’s founding treaty – Article 5 of the Washington Treaty or under a United Nations mandate, alone or in cooperation with other countries and international organisations.. |
NATO currently has 31 members – most of them European nations, plus the United States and Canada. | The newest member is Finland, which joined in 2023 in reaction to Russia’s 2022 invasion of Ukraine.
Sweden applied to join along with Finland but is waiting for Hungary to ratify its application as the final major step before membership. |
Context: Former US President Donald Trump accused NATO allies of not spending enough on defence..
