Economic & Social Issues (ESI) Questions For NABARD Grade A Exam | Set-26

Correct Answer – D. Ministry of Finance

Explanation-Harmonised Master List of Infrastructure sub-sectors is notified by the Ministry of Finance. It includes following categories:

• Transport and Logistics: Roads and bridges, Inland waterways, Airport, etc.
• Energy: Electricity Generation, Electricity Transmission, etc.
• Water and Sanitation: Solid Waste Management, Water treatment plants, etc.
• Communication: Telecommunication, etc.
  Social and Commercial Infrastructure: Education Institutions (capital stock), Sports Infrastructure, Hospitals (capital stock), Tourism infrastructure, etc. Hence, option D is correct. Recently, the Finance Ministry has granted ‘Infrastructure’ status for exhibition and convention centres. It has been included in the List by insertion of a new item in the category of Social and Commercial Infrastructure. In 2020, the government added affordable rental housing projects to the list of sectors recognised as infrastructure.

Correct Answer – B. Increase in domestic prices

Explanation-Devaluation of currency will make it more expensive for local consumers to obtain foreign currency with which to import foreign goods, hurting domestic consumers and causing less to be imported and it leads to increase in domestic prices.Devaluation is the deliberate downward adjustment of the value of a country’s money relative to another currency, group of currencies, or currency standard.

Correct Answer: C. National Small Industries Corporation

Explanation-The expanded form of NSIC is National Small Industries Corporation

• NSIC signs MOU with Ministry of MSME. The MOU envisages provision of enhanced services by NSIC under its marketing, financial, technology and other support services schemes for MSMEs in the country.
• Under the scheme of National SC-ST Hub being implemented by NSIC on behalf of the Ministry of MSME, it will be a continued endeavour to provide assistance to SC/ST entrepreneurs through different interventions and various outreach activities with the overall objectives to increase their participation in public procurement.
• The National SC/ST Hub has been set up to provide professional support to Scheduled Caste and Scheduled Tribe Entrepreneurs to fulfil the obligations under the Central Government Public Procurement Policy for Micro and Small Enterprises Order 2012, adopt applicable business practices and leverage the Stand-Up India initiative.
• The Hub would be implemented by the Ministry of MSME through National Small Industries Corporation (NSIC), a public-sector undertaking under the administrative control of this Ministry of MSME.

Correct Answer – C. Relative Poverty

Explanation- Relative Poverty – It is defined from the social perspective that is living standard compared to the economic standards of the population living in surroundings.

• Hence it is a measure of income inequality. For example, a family can be considered poor if it cannot afford vacations, or cannot buy presents for children at Christmas, or cannot send its young to the university.
• Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income.
• Absolute poverty: Also known as extreme poverty or abject poverty, it involves the scarcity of basic food, clean water, health, shelter, education and information. Those who belong to absolute poverty tend to struggle to live and experience a lot of child deaths from preventable diseases like malaria, cholera and water-contamination related diseases. Absolute Poverty is usually uncommon in developed countries.

Correct Answer – D. 1, 2 and 3

Explanation-Foreign portfolio investment (FPI) consists of securities and other financial assets passively held by foreign investors. It does not provide the investor with direct ownership of financial assets and is relatively liquid depending on the volatility of the market. Hence, statement 2 is correct. Examples of FPIs include stocks, bonds, mutual funds, exchange traded funds, American Depositary Receipts (ADRs), and Global Depositary Receipts (GDRs). Other Details Related to FPI:

• FPI is part of a country’s capital account and is shown on its Balance of Payments (BOP).
• Hence, statement 3 is correct.
• The BOP measures the amount of money flowing from one country to other countries over one monetary year.
• The Securities and Exchange Board of India (SEBI) brought new FPI Regulations, 2019, replacing the erstwhile FPI Regulations of 2014.
• FPI is often referred to as “hot money” because of its tendency to flee at the first signs of trouble in an economy.
• Hence, statement 1 is correct.
• FPI is more liquid and less risky than Foreign Direct Investment.

Correct Answer – D. All of the above

Explanation-The Sustainable Development Goals (SDGs) are a collection of 17 global goals set by the United Nations General Assembly in 2015 for the year 2030. The SDGs are part of Resolution 70/1 of the United Nations General Assembly, the 2030 Agenda.

The Sustainable Development Goals are: 1) No Poverty, 2) Zero Hunger, 3) Good Health and Well-being, 4) Quality Education, 5) Gender Equality, 6) Clean Water and Sanitation, 7) Affordable and Clean Energy, 8) Decent Work and Economic Growth, 9) Industry, Innovation, and Infrastructure, 10) Reducing Inequality, 11) Sustainable Cities and Communities, 12) Responsible Consumption and Production, 13) Climate Action, 14) Life Below Water, 15) Life On Land, 16)Goal 16 is dedicated to the promotion of peaceful and inclusive societies in developing countries, to prevent violence and combat terrorism and crime.

The goals are broad-based and interdependent. The 17 Sustainable Development Goal’s each have a list of targets that are measured with indicators.

Correct Answer –B. Command Economic System

Explanation-In a command economic system, a large part of the economic system is controlled by a centralized power. For example, in the USSR most decisions were made by the central government. This type of economy was the core of the communist philosophy. China or D.P.R.K. (North Korea) are examples of command economies.

Correct Answer – C. An inverse relationship between the rate of inflation and rate of unemployment

Explanation-  The Phillips curve is an economic concept developed by A. W. Phillips showing that inflation and unemployment have a stable and inverse relationship. This means that as unemployment increases in an economy, the inflation rate decreases. The theory states that economic growth comes inflation, which in turn should lead to more jobs and less unemployment. However, the original concept has been somewhat disproven empirically due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment.