Test: General Comprehension - 10 (2013-2012)


20 Questions MCQ Test UPSC Topic Wise Previous Year Questions | Test: General Comprehension - 10 (2013-2012)


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QUESTION: 1

Corporate governance is based on principles such as conducting the business with all integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions, complying with all the laws of the land, accountability and responsibility towards the stakeholders and commitment to conducting business in an ethical manner. Another point which is highlighted on corporate governance is the need for those in control to be able to distinguish between what are personal and corporate funds while managing a company.
Fundamentally, there is a level of confidence that is associated with a company that is known to have good corporate governance. The presence of an active group of independent directors on the board contributes a great deal towards ensuring confidence in the market. Corporate governance is known to be one of the criteria that foreign institutional investors are increasingly depending on when deciding on which companies to invest in. It is also known to have a positive influence on the share price of the company. Having a clean image on the corporate governance front could also make it easier for companies to source capital at more reasonable costs. Unfortunately, corporate governance often becomes the centre of discussion only after the exposure of a large scam.

Q. According to the passage, which of the following is/are the major benefit/benefits of good corporate governance?
1. Good corporate governance leads to increase in share price of the company.
2. A company with good corporate governance always increases its business turnover rapidly.
3. Good corporate governance is the main criterion for foreign institutional investors when they decide to buy a company.
Select the correct answer using the codes given below:

[2013]

Solution:

Good corporate influence have positive influence on the share price of the company as mentioned in last few lines of paragraph. Corporate governance is one of criteria for the foreign institutional investors when they decide to buy a company.

QUESTION: 2

The subject of democracy has become severely muddled because of the way the rhetoric surrounding it has been used in recent years. There is, increasingly, an oddly confused dichotomy between those who want to ‘impose’ democracy on countries in the non-Western world (in these countries’ ‘own interest’, of course) and those who are opposed to such ‘imposition’ (because of the respect for the countries’ ‘own ways’). But the entire language of ‘imposition’, used by both sides, is extraordinarily inappropriate since it makes the implicit assumption that democracy belongs exclusively to the West, taking it to be a quintessential ‘Wester’ idea which has originated and flourished only in the West.
But the thesis and the pessimism it generates about the possibility of democratic practice in the world would be extremely hard to justify. There were several experiments in local democracy in ancient India. Indeed, in understanding the roots of democracy in the world, we have to take an interest in the history of people participation and public reasoning in different parts of the world. We have to look beyond thinking of democracy only in terms of European and American evolution. We would fail to understand the pervasive demands for participatory living, on which Aristotle spoke with far-reaching insight, if we take democracy to be a kind of a specialized cultural product of the West.
It cannot, of course, be doubted that the institutional structure of the contemporary practice of democracy is largely the product of European and American experience over the last few centuries. This is extremely important to recognize since these developments in institutional formats were immensely innovative and ultimately effective. There can be little doubt that there is a major ‘Western’ achievement here.

Q. Which of the following is closest to the view of democracy as mentioned in the above passage?

[2013]

Solution:

The democracies in the west have evolved over a period of time because of people’s participation in the democratic process. The western democracies have institutionalized the various instrument of governance. As a result their democracies are far more robust than the newly formed democracies.

QUESTION: 3

The subject of democracy has become severely muddled because of the way the rhetoric surrounding it has been used in recent years. There is, increasingly, an oddly confused dichotomy between those who want to ‘impose’ democracy on countries in the non-Western world (in these countries’ ‘own interest’, of course) and those who are opposed to such ‘imposition’ (because of the respect for the countries’ ‘own ways’). But the entire language of ‘imposition’, used by both sides, is extraordinarily inappropriate since it makes the implicit assumption that democracy belongs exclusively to the West, taking it to be a quintessential ‘Wester’ idea which has originated and flourished only in the West.
But the thesis and the pessimism it generates about the possibility of democratic practice in the world would be extremely hard to justify. There were several experiments in local democracy in ancient India. Indeed, in understanding the roots of democracy in the world, we have to take an interest in the history of people participation and public reasoning in different parts of the world. We have to look beyond thinking of democracy only in terms of European and American evolution. We would fail to understand the pervasive demands for participatory living, on which Aristotle spoke with far-reaching insight, if we take democracy to be a kind of a specialized cultural product of the West.
It cannot, of course, be doubted that the institutional structure of the contemporary practice of democracy is largely the product of European and American experience over the last few centuries. This is extremely important to recognize since these developments in institutional formats were immensely innovative and ultimately effective. There can be little doubt that there is a major ‘Western’ achievement here.

Q. With reference to the passage, the following assumption have been made:
1. Many of the non-Western countries are unable to have democracy because they take democracy to be a specialized cultural product of the West.
2. Western countries are always trying to impose democracy on non-Western countries.
Which of the above is/are valid assumption/assumptions?

[2013]

Solution:

Statement 1 is incorrect.
Statement 2 is also incorrect because it can be inferred from the first paragraph that sometimes western nations are trying to impose democracy on non western nations but it cannot be inferred that western countries are always trying to impose democracy on non western.

QUESTION: 4

The miseries of the world cannot be cured by physical help only. Until man’s nature changes, his physical needs will always arise, and miseries will always be felt, and no amount of physical help will remove them completely. The only solution of the problem is to make mankind pure. Ignorance is the mother of evil and of all the misery we see. Let men have light, let them be pure and spiritually strong and educated; then alone will misery cease in the world. We may convert every house in the country into a charitable asylum, we may fill the land with hospitals, but human misery will continue until man’s character changes.

Q. According to the passage, which of the following statements is most likely to be true as the reason for man’s miseries?

[2013]

Solution:

Man's physical need is never going to cease as long as man is craving for it. Desire brings along miseries. If man doesn't realize this and keeps on doing what he is doing then no physical help can reduce his miseries. It is man's nature which is responsible for all the miseries. The only solution to this is man's spiritual growth and bringing change in his character.

QUESTION: 5

The miseries of the world cannot be cured by physical help only. Until man’s nature changes, his physical needs will always arise, and miseries will always be felt, and no amount of physical help will remove them completely. The only solution of the problem is to make mankind pure. Ignorance is the mother of evil and of all the misery we see. Let men have light, let them be pure and spiritually strong and educated; then alone will misery cease in the world. We may convert every house in the country into a charitable asylum, we may fill the land with hospitals, but human misery will continue until man’s character changes.

Q. With reference to the passage, the following assumptions have been made”
1. The author gives primary importance to physical and material help in eradicating human misery.
2. Charitable homes, hospitals, etc. can remove human misery to a great extent.
Which of the assumption is/are valid?

[2013]

Solution:

The author gives primary importance to spiritual growth in man in eradicating human misery.

QUESTION: 6

The law in many parts of the world increasingly restricts the discharge of agricultural slurry into watercourses. The simplest and often the most economically sound practice returns the material to the land as semisolid manure or as sprayed slurry. This dilutes its concentration in the environment to what might have occurred in a more primitive and sustainable types of agriculture and converts pollutant into fertilizer. Soil microorganisms decompose the organic components of sewage and slurry and most of the mineral nutrients become available to be absorbed again by the vegetation.
The excess input of nutrients, both nitrogen and phosphorus – based, agricultural runoff (and human sewage) has caused many ‘healthy’ oligotrophic lakes (low nutrient concentrations, low plant productivity with abundant water weeds, and clear water) to change to eutrophic condition where high nutrient inputs lead to high phytoplankton productivity (sometimes dominated by bloom-forming toxic species). This makes the water turbid, eliminates large plants and, in the worst situations, leads to anoxia and fish kills; so called cultural eutrophication. Thus, important ecosystem services are lost, including the provisioning service of wild-caught fish and the cultural services associated with recreation.
The process of cultural eutrophication of lakes has been understood for some time. But only recently did scientists notice huge ‘dead zones’ in the oceans near river outlets., particularly those draining large catchment areas such as the Mississippi in North America and the Yangtze in China. The nutrient-enriched water flows through streams, rivers and lakes, and eventually to the estuary and ocean where the ecological impact may be huge, killing virtually all invertebrates and fish in areas up to 70,000 km2 in extent. More than 150 sea areas worldwide are now regularly starved of oxygen as a result of decomposition of algal blooms, fuelled particularly by nitrogen from agricultural runoff of fertilizers and sewage from large cities. Oceanic dead zones are typically associated with industrialized nations and usually lie off countries that subsidize their agriculture, encouraging farmers to increases productivity and use more fertilizer.

Q. According to the passage, why should the discharge of agricultural slurry into watercourses be restricted?
1. Losing nutrients in this way is not a good practice economically.
2. Watercourses do not contain the microorganisms that can decompose organic components of agricultural slurry.
3. The discharge may lead to the eutrophication of water bodies.
Select the correct answer using the codes given below:

[2013]

Solution:

The discharge of agricultural slurry into watercourses should be restricted because watercourses do not contain the microorganisms that can decompose organic components of agricultural slurry. Secondly, the discharge may lead to the eutrophication of water bodies.

QUESTION: 7

The law in many parts of the world increasingly restricts the discharge of agricultural slurry into watercourses. The simplest and often the most economically sound practice returns the material to the land as semisolid manure or as sprayed slurry. This dilutes its concentration in the environment to what might have occurred in a more primitive and sustainable types of agriculture and converts pollutant into fertilizer. Soil microorganisms decompose the organic components of sewage and slurry and most of the mineral nutrients become available to be absorbed again by the vegetation.
The excess input of nutrients, both nitrogen and phosphorus – based, agricultural runoff (and human sewage) has caused many ‘healthy’ oligotrophic lakes (low nutrient concentrations, low plant productivity with abundant water weeds, and clear water) to change to eutrophic condition where high nutrient inputs lead to high phytoplankton productivity (sometimes dominated by bloom-forming toxic species). This makes the water turbid, eliminates large plants and, in the worst situations, leads to anoxia and fish kills; so called cultural eutrophication. Thus, important ecosystem services are lost, including the provisioning service of wild-caught fish and the cultural services associated with recreation.
The process of cultural eutrophication of lakes has been understood for some time. But only recently did scientists notice huge ‘dead zones’ in the oceans near river outlets., particularly those draining large catchment areas such as the Mississippi in North America and the Yangtze in China. The nutrient-enriched water flows through streams, rivers and lakes, and eventually to the estuary and ocean where the ecological impact may be huge, killing virtually all invertebrates and fish in areas up to 70,000 km2 in extent. More than 150 sea areas worldwide are now regularly starved of oxygen as a result of decomposition of algal blooms, fuelled particularly by nitrogen from agricultural runoff of fertilizers and sewage from large cities. Oceanic dead zones are typically associated with industrialized nations and usually lie off countries that subsidize their agriculture, encouraging farmers to increases productivity and use more fertilizer.

Q. The passage refers to the conversion of “pollutant to fertilizer”. What is pollutant and what is fertilizer in this context?

[2013]

Solution:

Discharged agricultural slurry has been referred to as pollutant and decomposed slurry in soil as fertilizer.

QUESTION: 8

The law in many parts of the world increasingly restricts the discharge of agricultural slurry into watercourses. The simplest and often the most economically sound practice returns the material to the land as semisolid manure or as sprayed slurry. This dilutes its concentration in the environment to what might have occurred in a more primitive and sustainable types of agriculture and converts pollutant into fertilizer. Soil microorganisms decompose the organic components of sewage and slurry and most of the mineral nutrients become available to be absorbed again by the vegetation.
The excess input of nutrients, both nitrogen and phosphorus – based, agricultural runoff (and human sewage) has caused many ‘healthy’ oligotrophic lakes (low nutrient concentrations, low plant productivity with abundant water weeds, and clear water) to change to eutrophic condition where high nutrient inputs lead to high phytoplankton productivity (sometimes dominated by bloom-forming toxic species). This makes the water turbid, eliminates large plants and, in the worst situations, leads to anoxia and fish kills; so called cultural eutrophication. Thus, important ecosystem services are lost, including the provisioning service of wild-caught fish and the cultural services associated with recreation.
The process of cultural eutrophication of lakes has been understood for some time. But only recently did scientists notice huge ‘dead zones’ in the oceans near river outlets., particularly those draining large catchment areas such as the Mississippi in North America and the Yangtze in China. The nutrient-enriched water flows through streams, rivers and lakes, and eventually to the estuary and ocean where the ecological impact may be huge, killing virtually all invertebrates and fish in areas up to 70,000 km2 in extent. More than 150 sea areas worldwide are now regularly starved of oxygen as a result of decomposition of algal blooms, fuelled particularly by nitrogen from agricultural runoff of fertilizers and sewage from large cities. Oceanic dead zones are typically associated with industrialized nations and usually lie off countries that subsidize their agriculture, encouraging farmers to increases productivity and use more fertilizer.

Q. According to the passage, what are the effects of indiscriminate use of fertilizers?
1. Addition of pollutants to the soil and water.
2. Destruction of decomposer microorganism in soil.
3. Nutrient enrichment of water bodies.
4. Creation of algal blooms.
Select the correct answer from the codes given below:

[2013]

Solution:

The pollutants are added to both the soil and water.
Soil doesn't get polluted as microorganisms convert pollutant into fertilizer. Water is enriched with the nutrient which flows through streams, rivers and lakes. These nutrients are responsible for eutrophication which results in decomposition of algal blooms.

QUESTION: 9

The law in many parts of the world increasingly restricts the discharge of agricultural slurry into watercourses. The simplest and often the most economically sound practice returns the material to the land as semisolid manure or as sprayed slurry. This dilutes its concentration in the environment to what might have occurred in a more primitive and sustainable types of agriculture and converts pollutant into fertilizer. Soil microorganisms decompose the organic components of sewage and slurry and most of the mineral nutrients become available to be absorbed again by the vegetation.
The excess input of nutrients, both nitrogen and phosphorus – based, agricultural runoff (and human sewage) has caused many ‘healthy’ oligotrophic lakes (low nutrient concentrations, low plant productivity with abundant water weeds, and clear water) to change to eutrophic condition where high nutrient inputs lead to high phytoplankton productivity (sometimes dominated by bloom-forming toxic species). This makes the water turbid, eliminates large plants and, in the worst situations, leads to anoxia and fish kills; so called cultural eutrophication. Thus, important ecosystem services are lost, including the provisioning service of wild-caught fish and the cultural services associated with recreation.
The process of cultural eutrophication of lakes has been understood for some time. But only recently did scientists notice huge ‘dead zones’ in the oceans near river outlets., particularly those draining large catchment areas such as the Mississippi in North America and the Yangtze in China. The nutrient-enriched water flows through streams, rivers and lakes, and eventually to the estuary and ocean where the ecological impact may be huge, killing virtually all invertebrates and fish in areas up to 70,000 km2 in extent. More than 150 sea areas worldwide are now regularly starved of oxygen as a result of decomposition of algal blooms, fuelled particularly by nitrogen from agricultural runoff of fertilizers and sewage from large cities. Oceanic dead zones are typically associated with industrialized nations and usually lie off countries that subsidize their agriculture, encouraging farmers to increases productivity and use more fertilizer.

Q. What is/are the characteristics of a water body with cultural eutrophication?
1. Loss of ecosystem services
2. Loss of flora and fauna
3. Loss of mineral nutrients
Select the correct answer using the code given below:

[2013]

Solution:

Cultural eutrophication will result in loss of flora and fauna as eutrophication of water bodies do not allow oxygen to pass through it.

QUESTION: 10

The law in many parts of the world increasingly restricts the discharge of agricultural slurry into watercourses. The simplest and often the most economically sound practice returns the material to the land as semisolid manure or as sprayed slurry. This dilutes its concentration in the environment to what might have occurred in a more primitive and sustainable types of agriculture and converts pollutant into fertilizer. Soil microorganisms decompose the organic components of sewage and slurry and most of the mineral nutrients become available to be absorbed again by the vegetation.
The excess input of nutrients, both nitrogen and phosphorus – based, agricultural runoff (and human sewage) has caused many ‘healthy’ oligotrophic lakes (low nutrient concentrations, low plant productivity with abundant water weeds, and clear water) to change to eutrophic condition where high nutrient inputs lead to high phytoplankton productivity (sometimes dominated by bloom-forming toxic species). This makes the water turbid, eliminates large plants and, in the worst situations, leads to anoxia and fish kills; so called cultural eutrophication. Thus, important ecosystem services are lost, including the provisioning service of wild-caught fish and the cultural services associated with recreation.
The process of cultural eutrophication of lakes has been understood for some time. But only recently did scientists notice huge ‘dead zones’ in the oceans near river outlets., particularly those draining large catchment areas such as the Mississippi in North America and the Yangtze in China. The nutrient-enriched water flows through streams, rivers and lakes, and eventually to the estuary and ocean where the ecological impact may be huge, killing virtually all invertebrates and fish in areas up to 70,000 km2 in extent. More than 150 sea areas worldwide are now regularly starved of oxygen as a result of decomposition of algal blooms, fuelled particularly by nitrogen from agricultural runoff of fertilizers and sewage from large cities. Oceanic dead zones are typically associated with industrialized nations and usually lie off countries that subsidize their agriculture, encouraging farmers to increases productivity and use more fertilizer.

Q. What is the central theme of this passage?

[2013]

Solution:

The theme of the passage is based on how the agricultural slurry when discharged in water causes cultural eutrophication resulting ecosystem service loss. The magnitude of the problem has been so much that the scientists have noticed huge 'dead zones' near big water bodies which means destruction of aquatic life.

QUESTION: 11

Ecological research over the last quarter of the century has established the deleterious effects of habitat fragmentation due to mining, highways and such other intrusions on forests. When a large block of forests gets fragmented into smaller bits, the edges of all these bits come into contact with human activities resulting in the degradation of the entire forests. Continuity of forested landscapes and corridors gets disrupted affecting several extinction-prone species of wildlife. Habitat fragmentation is therefore considered as the most serious threat to biodiversity conservation. Ad hoc grants of forest lands to mining companies coupled with rampant illegal mining is aggravating this threat.

Q. What is the central focus of this passage?

[2013]

Solution:

The passage revolves around the problem of habitat fragmentation which poses a serious threat to biodiversity conservation.

QUESTION: 12

Ecological research over the last quarter of the century has established the deleterious effects of habitat fragmentation due to mining, highways and such other intrusions on forests. When a large block of forests gets fragmented into smaller bits, the edges of all these bits come into contact with human activities resulting in the degradation of the entire forests. Continuity of forested landscapes and corridors gets disrupted affecting several extinction-prone species of wildlife. Habitat fragmentation is therefore considered as the most serious threat to biodiversity conservation. Ad hoc grants of forest lands to mining companies coupled with rampant illegal mining is aggravating this threat.

Q. What is the purpose of maintaining the continuity of forested landscapes and corridors?
1. Preservation of biodiversity.
2. Management of mineral resources.
3. Grant of forest lands for human activities.
Select the correct answer using the codes given below.

[2013]

Solution:

When forest lands get fragmented human activities start on the edges of these fragmented lands which results in degradation of entire forests. Therefore continuity of the forested landscapes and corridors should be maintained.

QUESTION: 13

In a typical Western liberal context, deepening of democracy invariably leads to consolidation of 'liberal values'. In the Indian context, democratization is translated into greater involvement of people not as 'individuals' which is a staple to liberal discourse, but as communities or groups. Individuals are getting involved in the public sphere not as ‘atomized’ individuals but as members of primordial communities drawn on religious or caste identity. Community-identity seems to be the governing force. It is not therefore surprising that the so-called peripheral groups continue to maintain their identities with reference to the social groups (caste, religion or sect) to which they belong while getting involved in the political processes despite the fact that their political goals remain more or less identical. By helping to articulate the political voice of the marginalized, democracy in India has led to ‘a loosening of social strictures’ and empowered the peripherals to be confident of their ability to improve the socio-economic conditions in which they are placed. This is a significant political process that had led to a silent revolution through a meaningful transfer of power from the upper caste elites to various subaltern groups within the democratic framework of public governance.

Q. According to the passage, what does ‘‘deepening of democracy’’ mean in the Western context?

[2012]

Solution:

In the Western context “deepenin g of democracy” means the increased participation of the individuals in the democratic process.
So, the other options (a), (b) and (d) are automatically negated.

QUESTION: 14

In a typical Western liberal context, deepening of democracy invariably leads to consolidation of 'liberal values'. In the Indian context, democratization is translated into greater involvement of people not as 'individuals' which is a staple to liberal discourse, but as communities or groups. Individuals are getting involved in the public sphere not as ‘atomized’ individuals but as members of primordial communities drawn on religious or caste identity. Community-identity seems to be the governing force. It is not therefore surprising that the so-called peripheral groups continue to maintain their identities with reference to the social groups (caste, religion or sect) to which they belong while getting involved in the political processes despite the fact that their political goals remain more or less identical. By helping to articulate the political voice of the marginalized, democracy in India has led to ‘a loosening of social strictures’ and empowered the peripherals to be confident of their ability to improve the socio-economic conditions in which they are placed. This is a significant political process that had led to a silent revolution through a meaningful transfer of power from the upper caste elites to various subaltern groups within the democratic framework of public governance.

Q. Greater democratization in India has not necessarily led to

[2012]

Solution:

Community-Identity seems to be the governing force mentioned in seventh line. Therefore option (b) is correct choice.

QUESTION: 15

In a typical Western liberal context, deepening of democracy invariably leads to consolidation of 'liberal values'. In the Indian context, democratization is translated into greater involvement of people not as 'individuals' which is a staple to liberal discourse, but as communities or groups. Individuals are getting involved in the public sphere not as ‘atomized’ individuals but as members of primordial communities drawn on religious or caste identity. Community-identity seems to be the governing force. It is not therefore surprising that the so-called peripheral groups continue to maintain their identities with reference to the social groups (caste, religion or sect) to which they belong while getting involved in the political processes despite the fact that their political goals remain more or less identical. By helping to articulate the political voice of the marginalized, democracy in India has led to ‘a loosening of social strictures’ and empowered the peripherals to be confident of their ability to improve the socio-economic conditions in which they are placed. This is a significant political process that had led to a silent revolution through a meaningful transfer of power from the upper caste elites to various subaltern groups within the democratic framework of public governance.

Q. What is the ‘‘silent revolution’’ that has occurred in the Indian democratic process?

[2012]

Solution:

The involvement of communities in the democratic process in India has led to a silent revolution. The upper castes held power in earlier days. This power is getting slowly, silently and surely transferred to the subaltern groups
In the context of this argument option (a), (b) and (d) are ruled out.

QUESTION: 16

The poor especially in market economies, need the strength that collectivities offer for creating more economic, social and political space for themselves, for enhancing their socio-economic well-being and voice, and as a protection against free market individualism. It has been argued that a group approach to farming, especially in the form of bottom up agricultural production collectivities, offers substantial scope for poverty alleviation and empowering the poor as well as enhancing agricultural productivity. To realize this potential, however, the groups would need to be voluntary in nature, small in size, participative in decision making and equitable in work sharing and benefit distribution. There are many notable examples of such collectivities to be found in varied contexts, such as in the transition economies. All of them bear witness to the possibility of successful cooperation under given conditions. And although the gender impact of the family cooperatives in the transition economies are uncertain, the Indian examples of women-only groups farming offer considerable potential for benefiting women.

Q. Agricultural collectivities such as group based farming can provide the rural poor
1. empowerment.
2. increased agricultural productivity.
3. safeguard against exploitative markets.
4. surplus production of agricultural commodities.
Select the correct answer using the codes given below:

[2012]

Solution:

This is the first of the passage. Group farming helps remove poverty, increases agricultural productivity and secures the individual from exploitation.
There is no mention of surplus production. So the other options are ruled out.

QUESTION: 17

The poor especially in market economies, need the strength that collectivities offer for creating more economic, social and political space for themselves, for enhancing their socio-economic well-being and voice, and as a protection against free market individualism. It has been argued that a group approach to farming, especially in the form of bottom up agricultural production collectivities, offers substantial scope for poverty alleviation and empowering the poor as well as enhancing agricultural productivity. To realize this potential, however, the groups would need to be voluntary in nature, small in size, participative in decision making and equitable in work sharing and benefit distribution. There are many notable examples of such collectivities to be found in varied contexts, such as in the transition economies. All of them bear witness to the possibility of successful cooperation under given conditions. And although the gender impact of the family cooperatives in the transition economies are uncertain, the Indian examples of women-only groups farming offer considerable potential for benefiting women.

Q. What does the author imply by ‘‘gender impact’’?

[2012]

Solution:

The last lines of passage mentioned that "the Indian examples of women only groups farming offer potential benefiting women". Hence, (c)  is correct choice.

QUESTION: 18

The poor especially in market economies, need the strength that collectivities offer for creating more economic, social and political space for themselves, for enhancing their socio-economic well-being and voice, and as a protection against free market individualism. It has been argued that a group approach to farming, especially in the form of bottom up agricultural production collectivities, offers substantial scope for poverty alleviation and empowering the poor as well as enhancing agricultural productivity. To realize this potential, however, the groups would need to be voluntary in nature, small in size, participative in decision making and equitable in work sharing and benefit distribution. There are many notable examples of such collectivities to be found in varied contexts, such as in the transition economies. All of them bear witness to the possibility of successful cooperation under given conditions. And although the gender impact of the family cooperatives in the transition economies are uncertain, the Indian examples of women-only groups farming offer considerable potential for benefiting women.

Q. Consider the following assumptions:
1. It is imperative for transition economies to have agricultural collectivities.
2. Agricultural productivity can be increased by group approach to farming.
With reference to the above passage, which of these assumptions is/are valid?

[2012]

Solution:

(a) There is compulsion on the transition economies to go in for group farming. Therefore, this is not the correct answer. (b) The paragraph is all about the benefits of group approach to farming. This is the right answer.
(c) Both options correct included.
(d) Both cannot be negated.

QUESTION: 19

The need for Competition Law becomes more evident when foreign direct investment (FDI) is liberalized. The impact of FDI is not always pro-competitive. Very often FDI takes the form of a foreign corporation acquiring a domestic enterprise or establishing a joint venture with one. By making such an acquisition the foreign investor may substantially lessen competition and gain a dominant position in the relevant market, thus charging higher prices. Another scenario is where the affiliates of two separate multinational companies (MNCs) have been established in competition with one another in a particular developing economy, following the liberalization of FDI. Subsequently, the parent companies overseas merge. With the affiliates no longer remaining independent, competition in the host country may be virtually eliminated and the prices of the products may be artificially inflated. Most of these adverse consequences of mergers and acquisitions by MNCs can be avoided if an effective competition law is in place. Also, an economy that has implemented an effective competition law is in a better position to attract FDI than one that has not. This is not just because most MNCs are expected to be accustomed to the operation of such a law in their home countries and know how to deal with such concerns but also that MNCs expect competition authorities to ensure a level playing field between domestic and foreign firms.

Q. With reference to the passage, consider the following statements:
1. It is desirable that the impact of Foreign Direct Investment should be pro-competitive.
2. The entry of foreign investors invariably leads to the inflated prices in domestic markets.
Which of the statements given above is/are correct?

[2012]

Solution:

The effect of FDI or Foreign Direct Investment should be to induce competition because this is ensured in most countries worldwide.

QUESTION: 20

The need for Competition Law becomes more evident when foreign direct investment (FDI) is liberalized. The impact of FDI is not always pro-competitive. Very often FDI takes the form of a foreign corporation acquiring a domestic enterprise or establishing a joint venture with one. By making such an acquisition the foreign investor may substantially lessen competition and gain a dominant position in the relevant market, thus charging higher prices. Another scenario is where the affiliates of two separate multinational companies (MNCs) have been established in competition with one another in a particular developing economy, following the liberalization of FDI. Subsequently, the parent companies overseas merge. With the affiliates no longer remaining independent, competition in the host country may be virtually eliminated and the prices of the products may be artificially inflated. Most of these adverse consequences of mergers and acquisitions by MNCs can be avoided if an effective competition law is in place. Also, an economy that has implemented an effective competition law is in a better position to attract FDI than one that has not. This is not just because most MNCs are expected to be accustomed to the operation of such a law in their home countries and know how to deal with such concerns but also that MNCs expect competition authorities to ensure a level playing field between domestic and foreign firms.

Q. According to the passage, how does a foreign investor dominate the relevant domestic market?
1. Multinational companies get accustomed to domestic laws.
2. Foreign companies establish joint ventures with domestic companies.
3. Affiliates in a particular market/sector lose their independence as their parent companies overseas merge.
4. Foreign companies lower the cost of their products as compared to that of products of domestic companies.
Which of the statements given above are correct?

[2012]

Solution:

(a) The first option of multinational companies getting accustomed to domestic laws is not mentioned at all. So, this is not the correct answer.
(b) Foreign companies may establish joint ventures with domestic or companies may get stronger as the parent companies merge overseas. Both options are mentioned in the paragraph. So, this is the correct answer.
(c) Since option (1) is included this is not the right answer.
(d) Same as in (c). Moreover option (4) where foreign companies lower costs finds no mention in the paragraph.

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