UPSC Economy : International Organization and Economic Theory Part 1

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TOPIC:International Organization and Economic Theory


Q1. Consider the following statements regarding Trickle down Theory:

a) It states that hydroelectric generating stations are the most efficient sources of power for developed countries.

b) It was suggested by Amartya Sen.

c) It states that an increase in per capita income will eventually increase the well being of all segments of society as it trickles down to these groups.

Ans:     C

Explanation:    Proponents of this theory expect that when governments help companies, they will produce more and thereby hire more people and raise salaries. The people in turn, will have more money to spend in the economy.

Q2. Consider the following statements and select the correct option:

  1. Big push theory is proposed by R. Rodon.
  2. Asian Development Bank was set up in 1970.
  3. Money Order System in India was started in 1870.
  4. General India Insurance Company was set up in 1972.

Choose correct option:

a) 1 and 2             b) 1 and 4             c) All of the above             d) Only 2

Ans:     B


  1. Big Push Theory is proposed by R. Rodon.
  2. Asian Development Bank was set up in 1966. Its headquarter is situated in Philippines (Manila).
  3. Money Order System in India was started in 1880.

Q3. Consider the following statements:

  1. Under the WTO agreement, a compulsory licence can be invoked by a national government to allow someone else to make a patented product.
  2. TB treatment drug in India by the Hyderabad based Natco pharma at low cost.

a) Only 2 is correct

b) Only 1 is correct

c) 1 and 2 are correct

d) 1 and 2 are not correct.

Ans:     B

Explanation:    Nexavar is a cancer treatment drug. It will be available at 8880 pre pack of 120 tablet. Buyer, a German multinational hold the patent for nexavar, which now sells at 2.84lakhs.

Q4. Consider the following statements and choose the correct code:

  1. India is an activity contributor to all UN organs since inception
  2. India is a founder of member of united nation.

a) Only 1             b) Only 2             c) 1 and 2             d) 1 and 2 are not correct

Ans:     C

Explanation:    India is a founder member of united nation. India is a strong supporter of the ideals and principles of the united nation. Statement 2 is also correct.

Q5. In terms of economy, the visit of foreign national to witness the XIX common Wealth Games in India amounted to?

a) Export

b) Production

c) Rise money value

d) a, b and c

Ans:     A

Explanation:    The visits of foreign national to witness sports event like that common wealth game. Games mean India are exporting service for them. So in the given option (a) is correct about given statements.

Q6. Which of the following are not member of Shaghai cooperation organization?

1. Ukraine

2. Uzbekistan

3. Russia

4. Kazakhistan

a) Only 1 is correct

b) Only 1 and 2 is correct

c) 4 and 3 are correct

d) 1, 2, 3 and 4 are correct

Ans:     A

Explanation:    The Shanghai cooperation Organization was established in shanghai in 2001. It has 6 member china, Russia, Kazakhistan, Tajakistan, Uzbekistan. India is granted observer status in Shanghai cooperation organization.

Q7. Consider the following statements:

  1. India is a member of nuclear suppliers group.
  2. The nuclear supplier group has 29 countries as its member.


a) Only 2 is correct

b) Only 1 is Correct

c) Both 1 and 2 are correct

d) Both 1 and 2 are not correct.

Ans:     D

Explanation:    India is not member of nuclear supplier group. Nuclear suppliers group were established in 1975. Nuclear supplier group has 45 countries as its members so 1 and 2 both are not correct.

Q8. Other than Venezuela, which one among the following from south America is a member of OPEC?

a) Boliva

b) Equador

c) Argentina

d) Brazil

Ans:     B

Explanation:    Organisation of the petroleum exporting countries is known as OPEC, It was established in 1960 in Bagdad (Iraq), Iran, Kuwait, Iran, Venezuela, Saudi Arabia are founder member of OPEC. Now Equador is the member of OPEC

Q9. Consider the following statements and select correct code:

  1. The headquarter of the International Organisation for standardization are located in Rome
  2. ISO (International Organization for standardization) 9000 related to the quality management.

a) Only 2 is correct

b) Only 1 is correct

c) 1 and 2 is correct

d) 1 and 2 are not correct

Ans:     A

Explanation:    The Headquarter of the International Organization for Standardization (ISO) is Geneva not Rome Statement 2 is correct. ISO is a non governmental organization

Q10. The WTO has a provision under which member countries need to cut the trade tariff to zero in phased manner for which the swiss formula is applied

Select false statement related to it:

  1. This is a liner method of traffic cuts.
  2. In the swiss formula, tariff cut are proportionally higher for the countries which have higher energy rates

a) Only 1 is correct

b) Only 2 is Correct

c) Both are incorrect

d) Both are correct

Ans:     A


Statement 1 is correct and 2 is not correct. This is a non liner method of tarrif cuts. The formula originated in Switzerland round of negotiation of general agreement on trade and tarrif.