Test: General Comprehension - 9 (2014-2013)


20 Questions MCQ Test UPSC Topic Wise Previous Year Questions | Test: General Comprehension - 9 (2014-2013)


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QUESTION: 1

Climate change poses potentially devastating effects on India's agriculture. While the overall parameters of climate change are increasingly accepted - a 1°C average temperature increase over the next 30 years, sea level rise of less than 10 cm in the same period, and regional monsoon variations and corresponding droughts - the impacts in India are likely to be quite site and crop-specific. Some crops may respond favourably to the changing conditions, others may not. This emphasizes the need to promote agricultural research and create maximum flexibility in the system to permit adaptations.
The key ingredient for “drought-proofing” is the managed recharge of aquifers. To ensure continued yields of important staple crops (e.g. wheat), it may also be necessary to shift the locations where these crops are grown, in response to temperature changes as well as to water availability. The latter will be a key factor in making long term investment decisions.
For example, water runoff from the Himalayas is predicted to increase over the next 30 years as glaciers melt, but then decline substantially thereafter. It will be critical to provide incentives to plan for these large-scale shifts in agro-ecological conditions.
India needs to make long term investment in research and development in agriculture. India is likely to experience changed weather patterns in future.

Q. Consider the following statements :
Climate change may force the shifting of locations of the existing crops due to
1. melting of glaciers.
2. water availability and temperature suitability at other locations.
3. poor productivity of crops.
4. wider adaptability of crop plants.
Which of the statements given above are correct?

[2014]

Solution:

According to the passage the melting of glaciers from the Himalayas will lead to increased run-offs or flow of water in the next 30 years, after which it will decrease, so statement (1) is one of the factors which will force the shifting of location of existing crops due to climatic conditions. Temperatures will increase by 1degree centigrade over the same period all over the world, and the sea level is expected to rise by 10cm, so obviously very hot places cannot be suitable for certain crops. So statement (2) is also correct. Due to drought conditions and monsoon variations certain areas will give poor crop productivity. So crop production will have to be shifted to more suitable areas to adjust with ecological imbalances. Hence statement (3) has to be included in the answer too.

QUESTION: 2

Climate change poses potentially devastating effects on India's agriculture. While the overall parameters of climate change are increasingly accepted - a 1°C average temperature increase over the next 30 years, sea level rise of less than 10 cm in the same period, and regional monsoon variations and corresponding droughts - the impacts in India are likely to be quite site and crop-specific. Some crops may respond favourably to the changing conditions, others may not. This emphasizes the need to promote agricultural research and create maximum flexibility in the system to permit adaptations.
The key ingredient for “drought-proofing” is the managed recharge of aquifers. To ensure continued yields of important staple crops (e.g. wheat), it may also be necessary to shift the locations where these crops are grown, in response to temperature changes as well as to water availability. The latter will be a key factor in making long term investment decisions.
For example, water runoff from the Himalayas is predicted to increase over the next 30 years as glaciers melt, but then decline substantially thereafter. It will be critical to provide incentives to plan for these large-scale shifts in agro-ecological conditions.
India needs to make long term investment in research and development in agriculture. India is likely to experience changed weather patterns in future.

Q. According to the passage, why is it important to promote agricultural research in India?

[2014]

Solution:

As India is likely to experience changed weather patterns in the future it is important to invest in research and development in agriculture so that it is possible to locate and identify the areas which will be most suitable for different crops.

QUESTION: 3

Net profits are only 2.2% of their total assets for central public sector undertakings, lower than for the private corporate sector. While the public sector or the State-led entrepreneurship played an important role in triggering India's industrialization, our evolving development needs, comparatively less-than-satisfactory performance of the public sector enterprises, the maturing of our private sector, a much larger social base now available for expanding entrepreneurship and the growing institutional capabilities to enforce competition policies would suggest that the time has come to review the role of public sector.
What should the portfolio composition of the government be? It should not remain static all times. The airline industry works well as a purely private affair. At the opposite end, rural roads, whose sparse traffic makes tolling unviable, have to be on the balance-sheet of the State. If the government did not own rural roads, they would not exist. Similarly, public health capital in our towns and cities will need to come from the public sector. Equally, preservation and improvement of forest cover will have to be a new priority for the public sector assets.
Take the example of steel. With near-zero tariffs, India is a globally competitive market for the metal. Indian firms export steel into the global market, which demonstrates there is no gap in technology. Indian companies are buying up global steel companies, which shows there is no gap in capital availability. Under these conditions, private ownership works best.
Private ownership is clearly desirable in regulated industries, ranging from finance to infrastructure, where a government agency performs the function of regulation and multiple competing firms are located in the private sector. Here, the simple and clean solution - government as the umpire and the private sector as the players is what works best. In many of these industries, we have a legacy of government ownership, where productivity tends to be lower, fear of bankruptcy is absent, and the risk of asking for money from the tax payer is ever present. There is also the conflict of interest between government as an owner and as the regulator. The formulation and implementation of competition policy will be more vigorous and fair if government companies are out of action.

Q. According to the passage, what is/are the reason/reasons for saying that the time has come to review the role of public sector?
1. Now public sector has lost its relevance in the industrialization process.
2. Public sector does not perform satisfactorily.
3. Entrepreneurship in private sector is expanding.
4. Effective competition policies are available now.
Which of the statements given above is/are correct in the given context?

[2014]

Solution:

According to the passage net profits are only 2.2% as far as the central public sector undertakings are concerned.
So statement (2) is correct. The private sector has grown.
There is a larger base with more educated and moneyed people around. Hence statement (3) is correct too from the point of view of the paragraph. The role of governmental institutions in encouraging competition among the private sector enterprises ensures the continuing growth of this sector. Hence, Statement (4) is also correct.

QUESTION: 4

Net profits are only 2.2% of their total assets for central public sector undertakings, lower than for the private corporate sector. While the public sector or the State-led entrepreneurship played an important role in triggering India's industrialization, our evolving development needs, comparatively less-than-satisfactory performance of the public sector enterprises, the maturing of our private sector, a much larger social base now available for expanding entrepreneurship and the growing institutional capabilities to enforce competition policies would suggest that the time has come to review the role of public sector.
What should the portfolio composition of the government be? It should not remain static all times. The airline industry works well as a purely private affair. At the opposite end, rural roads, whose sparse traffic makes tolling unviable, have to be on the balance-sheet of the State. If the government did not own rural roads, they would not exist. Similarly, public health capital in our towns and cities will need to come from the public sector. Equally, preservation and improvement of forest cover will have to be a new priority for the public sector assets.
Take the example of steel. With near-zero tariffs, India is a globally competitive market for the metal. Indian firms export steel into the global market, which demonstrates there is no gap in technology. Indian companies are buying up global steel companies, which shows there is no gap in capital availability. Under these conditions, private ownership works best.
Private ownership is clearly desirable in regulated industries, ranging from finance to infrastructure, where a government agency performs the function of regulation and multiple competing firms are located in the private sector. Here, the simple and clean solution - government as the umpire and the private sector as the players is what works best. In many of these industries, we have a legacy of government ownership, where productivity tends to be lower, fear of bankruptcy is absent, and the risk of asking for money from the tax payer is ever present. There is also the conflict of interest between government as an owner and as the regulator. The formulation and implementation of competition policy will be more vigorous and fair if government companies are out of action.

Q. According to the passage, rural roads should be in the domain of public sector only. Why?

[2014

Solution:

The rural roads should be in the domain of the public sector only because the sparse or the little traffic in these roads makes it impossible to make profits on the road tax or tolls as they are called.

QUESTION: 5

Net profits are only 2.2% of their total assets for central public sector undertakings, lower than for the private corporate sector. While the public sector or the State-led entrepreneurship played an important role in triggering India's industrialization, our evolving development needs, comparatively less-than-satisfactory performance of the public sector enterprises, the maturing of our private sector, a much larger social base now available for expanding entrepreneurship and the growing institutional capabilities to enforce competition policies would suggest that the time has come to review the role of public sector.
What should the portfolio composition of the government be? It should not remain static all times. The airline industry works well as a purely private affair. At the opposite end, rural roads, whose sparse traffic makes tolling unviable, have to be on the balance-sheet of the State. If the government did not own rural roads, they would not exist. Similarly, public health capital in our towns and cities will need to come from the public sector. Equally, preservation and improvement of forest cover will have to be a new priority for the public sector assets.
Take the example of steel. With near-zero tariffs, India is a globally competitive market for the metal. Indian firms export steel into the global market, which demonstrates there is no gap in technology. Indian companies are buying up global steel companies, which shows there is no gap in capital availability. Under these conditions, private ownership works best.
Private ownership is clearly desirable in regulated industries, ranging from finance to infrastructure, where a government agency performs the function of regulation and multiple competing firms are located in the private sector. Here, the simple and clean solution - government as the umpire and the private sector as the players is what works best. In many of these industries, we have a legacy of government ownership, where productivity tends to be lower, fear of bankruptcy is absent, and the risk of asking for money from the tax payer is ever present. There is also the conflict of interest between government as an owner and as the regulator. The formulation and implementation of competition policy will be more vigorous and fair if government companies are out of action.

Q. The portfolio composition of the government refers to

[2014]

Solution:

The government does invest in different industrial sectors. This is what the paragraph says. Indeed there is governmental investment in a variety of industries from airlines, roads, steel, and finance to industries where the private sector plays a prominent role. For in the latter it acts as the umpire or the regulating agency so as to create a competitive atmosphere for the growth of entrepreneurship.

QUESTION: 6

Net profits are only 2.2% of their total assets for central public sector undertakings, lower than for the private corporate sector. While the public sector or the State-led entrepreneurship played an important role in triggering India's industrialization, our evolving development needs, comparatively less-than-satisfactory performance of the public sector enterprises, the maturing of our private sector, a much larger social base now available for expanding entrepreneurship and the growing institutional capabilities to enforce competition policies would suggest that the time has come to review the role of public sector.
What should the portfolio composition of the government be? It should not remain static all times. The airline industry works well as a purely private affair. At the opposite end, rural roads, whose sparse traffic makes tolling unviable, have to be on the balance-sheet of the State. If the government did not own rural roads, they would not exist. Similarly, public health capital in our towns and cities will need to come from the public sector. Equally, preservation and improvement of forest cover will have to be a new priority for the public sector assets.
Take the example of steel. With near-zero tariffs, India is a globally competitive market for the metal. Indian firms export steel into the global market, which demonstrates there is no gap in technology. Indian companies are buying up global steel companies, which shows there is no gap in capital availability. Under these conditions, private ownership works best.
Private ownership is clearly desirable in regulated industries, ranging from finance to infrastructure, where a government agency performs the function of regulation and multiple competing firms are located in the private sector. Here, the simple and clean solution - government as the umpire and the private sector as the players is what works best. In many of these industries, we have a legacy of government ownership, where productivity tends to be lower, fear of bankruptcy is absent, and the risk of asking for money from the tax payer is ever present. There is also the conflict of interest between government as an owner and as the regulator. The formulation and implementation of competition policy will be more vigorous and fair if government companies are out of action.

Q. The author prefers government as the umpire and private sector as players because

[2014]

Solution:

The government acts as a regulating agency by prescribing broad norms within which the private enterprises can conduct their business in an atmosphere of fair and fearless competition. That is why the government is made the umpire in a field of business players.

QUESTION: 7

Many nations now place their faith in capitalism and governments choose it as the strategy to create wealth for their people. The spectacular economic growth seen in Brazil, China and India after the liberalisation of their economies is proof of its enormous potential and success. However, the global banking crisis and the economic recession have left many bewildered. The debates tend to focus on free market operations and forces, their efficiency and their ability for self correction. Issues of justice, integrity and honesty are rarely elaborated to highlight the failure of the global banking system. The apologists of the system continue to justify the success of capitalism and argue that the recent crisis was a blip.
Their arguments betray an ideological bias with the assumptions that an unregulated market is fair and competent, and that the exercise of private greed will be in the larger public interest.
Few recognize the bidirectional relationship between capitalism and greed; that each reinforces the other. Surely, a more honest conceptualisation of the conflicts of interest among the rich and powerful players who have benefited from the system, their biases and ideology is needed; the focus on the wealth creation should also highlight the resultant gross inequity.

Q. The apologists of the "Free Market System", according to the passage, believe in

[2014]

Solution:

The apologists of the free market system believe in the ability of the market to self correct. Their discussions are generally about free market operations and forces, on the efficiency of such enterprises and their ability for self correction.

QUESTION: 8

Many nations now place their faith in capitalism and governments choose it as the strategy to create wealth for their people. The spectacular economic growth seen in Brazil, China and India after the liberalisation of their economies is proof of its enormous potential and success. However, the global banking crisis and the economic recession have left many bewildered. The debates tend to focus on free market operations and forces, their efficiency and their ability for self correction. Issues of justice, integrity and honesty are rarely elaborated to highlight the failure of the global banking system. The apologists of the system continue to justify the success of capitalism and argue that the recent crisis was a blip.
Their arguments betray an ideological bias with the assumptions that an unregulated market is fair and competent, and that the exercise of private greed will be in the larger public interest.
Few recognize the bidirectional relationship between capitalism and greed; that each reinforces the other. Surely, a more honest conceptualisation of the conflicts of interest among the rich and powerful players who have benefited from the system, their biases and ideology is needed; the focus on the wealth creation should also highlight the resultant gross inequity.

Q. With reference to "ideological bias", the passage implies that

[2014]

Solution:

Ideological bias means an opinion that is of a partial nature. Here the idea expressed in the passage is that an unregulated market is free and competent.

QUESTION: 9

Many nations now place their faith in capitalism and governments choose it as the strategy to create wealth for their people. The spectacular economic growth seen in Brazil, China and India after the liberalisation of their economies is proof of its enormous potential and success. However, the global banking crisis and the economic recession have left many bewildered. The debates tend to focus on free market operations and forces, their efficiency and their ability for self correction. Issues of justice, integrity and honesty are rarely elaborated to highlight the failure of the global banking system. The apologists of the system continue to justify the success of capitalism and argue that the recent crisis was a blip.
Their arguments betray an ideological bias with the assumptions that an unregulated market is fair and competent, and that the exercise of private greed will be in the larger public interest.
Few recognize the bidirectional relationship between capitalism and greed; that each reinforces the other. Surely, a more honest conceptualisation of the conflicts of interest among the rich and powerful players who have benefited from the system, their biases and ideology is needed; the focus on the wealth creation should also highlight the resultant gross inequity.

Q. The exercise of private greed will be in the larger public interest" from the passage
1. refers to the false ideology of capitalism.
2. underlies the righteous claims of the free market.
3. shows the benevolent face of capitalism.
4. ignores resultant gross inequity.
Which of the statements given above is/are correct?

[2014]

Solution:

It is clearly said that the arguments betray meaning give away a biased opinion. So statement (1) referring to the false ideology of capitalism is one of the options. It is also mentioned that a more honest analysis would reflect the resultant gross inequality. So statement (4) is also the correct option.

QUESTION: 10

Crude mineral oil comes out of the earth as a thick brown or black liquid with a strong smell. It is a complex mixture of many different substances, each with its own individual qualities. Most of them are combinations of hydrogen and carbon in varying proportions. Such hydrocarbons are also found in other forms such as bitumen, asphalt and natural gas. Mineral oil originates from the carcasses of tiny animals and from plants that live in the sea. Over millions of years, these dead creatures form large deposits under the seabed; and ocean currents cover them with a blanket of sand and silt. As this mineral hardens, it becomes sedimentary rock and effectively shuts out the oxygen, so preventing the complete decomposition of the marine deposits underneath. The layers of sedimentary rock become thicker and heavier. Their pressure produces heat, which transforms the tiny carcasses into crude oil in a process that is still going on today.

Q. Mineral oil deposits under the sea do not get completely decomposed because they

[2013]

Solution:

When Oxygen is shut from entering the decomposition doesn't take place completely. The Carcasses inside the sedimentary rocks get transformed into crude oil due to heat and pressure.

QUESTION: 11

Crude mineral oil comes out of the earth as a thick brown or black liquid with a strong smell. It is a complex mixture of many different substances, each with its own individual qualities. Most of them are combinations of hydrogen and carbon in varying proportions. Such hydrocarbons are also found in other forms such as bitumen, asphalt and natural gas. Mineral oil originates from the carcasses of tiny animals and from plants that live in the sea. Over millions of years, these dead creatures form large deposits under the seabed; and ocean currents cover them with a blanket of sand and silt. As this mineral hardens, it becomes sedimentary rock and effectively shuts out the oxygen, so preventing the complete decomposition of the marine deposits underneath. The layers of sedimentary rock become thicker and heavier. Their pressure produces heat, which transforms the tiny carcasses into crude oil in a process that is still going on today.

Q. Sedimentary rock leads to the formation of oil deposits because

[2013]

Solution:

The layers of Sedimentary rocks become thicker and heavier due to deposition and create pressure on the marine creatures under it, which in turn change the carcasses into crude oil.

QUESTION: 12

Financial markets in India have acquired greater depth and liquidity over the years. Steady reforms since 1991 have led to growing linkages and integration of the Indian economy and its financial system with the global economy. Weak global economic prospects and continuing uncertainties in the international financial markets therefore, have had their impact on the emerging market economies. Sovereign risk concerns, particularly in the Euro area, affected financial markets for the greater part of the year, with the contagion of Greece’s sovereign debt problem spreading to India and other economies by way of higher-than normal levels of volatility.
The funding constraints in international financial markets could impact both the availability and cost of foreign funding for banks and corporates. Since the Indian financial system is bank dominated, banks’ ability to withstand stress is critical to overall financial stability. Indian banks, however, remain robust, notwithstanding a decline in capital to risk-weighted assets ratio and a rise in non-performing asset levels in the recent past. Capital adequacy levels remain above the regulatory requirements. The financial market infrastructure continues to function without any major disruption. With further globalization, consolidation, deregulation, and diversification of the financial system, the banking business may become more complex and riskier. Issues like risk and liquidity management and enhancing skill therefore assume greater significance.

Q. According to the passage, the financial markets in the emerging market economies including India had the adverse impact in recent years due to
1. weak global economic prospects.
2. uncertainties in the international financial markets.
3. sovereign risk concerns in the Euro area.
4. bad monsoons and the resultant crop loss.
Select the correct answer using the code given below:

[2013]

Solution:

According to the passage, weak global economic prospects and continuing uncertainties in the international markets as well as sovereign risk concerns, particularly in the Euro area have had their impact on the emerging market economies.

QUESTION: 13

Financial markets in India have acquired greater depth and liquidity over the years. Steady reforms since 1991 have led to growing linkages and integration of the Indian economy and its financial system with the global economy. Weak global economic prospects and continuing uncertainties in the international financial markets therefore, have had their impact on the emerging market economies. Sovereign risk concerns, particularly in the Euro area, affected financial markets for the greater part of the year, with the contagion of Greece’s sovereign debt problem spreading to India and other economies by way of higher-than normal levels of volatility.
The funding constraints in international financial markets could impact both the availability and cost of foreign funding for banks and corporates. Since the Indian financial system is bank dominated, banks’ ability to withstand stress is critical to overall financial stability. Indian banks, however, remain robust, notwithstanding a decline in capital to risk-weighted assets ratio and a rise in non-performing asset levels in the recent past. Capital adequacy levels remain above the regulatory requirements. The financial market infrastructure continues to function without any major disruption. With further globalization, consolidation, deregulation, and diversification of the financial system, the banking business may become more complex and riskier. Issues like risk and liquidity management and enhancing skill therefore assume greater significance.

Q. The Indian financial markets are affected by global changes mainly due to the

[2013]

Solution:

The Indian financial markets are affected by global changes mainly due to the contagion of Greece’s sovereign debt problem spreading to India.

QUESTION: 14

Financial markets in India have acquired greater depth and liquidity over the years. Steady reforms since 1991 have led to growing linkages and integration of the Indian economy and its financial system with the global economy. Weak global economic prospects and continuing uncertainties in the international financial markets therefore, have had their impact on the emerging market economies. Sovereign risk concerns, particularly in the Euro area, affected financial markets for the greater part of the year, with the contagion of Greece’s sovereign debt problem spreading to India and other economies by way of higher-than normal levels of volatility.
The funding constraints in international financial markets could impact both the availability and cost of foreign funding for banks and corporates. Since the Indian financial system is bank dominated, banks’ ability to withstand stress is critical to overall financial stability. Indian banks, however, remain robust, notwithstanding a decline in capital to risk-weighted assets ratio and a rise in non-performing asset levels in the recent past. Capital adequacy levels remain above the regulatory requirements. The financial market infrastructure continues to function without any major disruption. With further globalization, consolidation, deregulation, and diversification of the financial system, the banking business may become more complex and riskier. Issues like risk and liquidity management and enhancing skill therefore assume greater significance.

Q. According to the passage, in the Indian financial system, bank’s ability to withstand stress is critical to ensure overall financial stability because Indian financial system is

[2013]

Solution:

Since the Indian financial system is bank dominated banks ability to withstand stress is critical to overall financial stability.

QUESTION: 15

Financial markets in India have acquired greater depth and liquidity over the years. Steady reforms since 1991 have led to growing linkages and integration of the Indian economy and its financial system with the global economy. Weak global economic prospects and continuing uncertainties in the international financial markets therefore, have had their impact on the emerging market economies. Sovereign risk concerns, particularly in the Euro area, affected financial markets for the greater part of the year, with the contagion of Greece’s sovereign debt problem spreading to India and other economies by way of higher-than normal levels of volatility.
The funding constraints in international financial markets could impact both the availability and cost of foreign funding for banks and corporates. Since the Indian financial system is bank dominated, banks’ ability to withstand stress is critical to overall financial stability. Indian banks, however, remain robust, notwithstanding a decline in capital to risk-weighted assets ratio and a rise in non-performing asset levels in the recent past. Capital adequacy levels remain above the regulatory requirements. The financial market infrastructure continues to function without any major disruption. With further globalization, consolidation, deregulation, and diversification of the financial system, the banking business may become more complex and riskier. Issues like risk and liquidity management and enhancing skill therefore assume greater significance.

Q. Risk and liquidity management assumes more importance in the Indian banking system in future due to
1. further globalization.
2. more consolidation and deregulation of financial system
3. further diversification of the financial system.
4. more financial inclusion in the economy.
Select the correct answer using the code given below:

[2013]

Solution:

With further globalization, consolidation, deregulation and diversification, risk and liquidity management assumes more importance in the Indian banking system in future.

QUESTION: 16

A number of empirical studies find that farmers are risk-averse, though only moderately in many cases. There is also evidence to show that farmers’ risk aversion results in cropping patterns and input use designed to reduce risk rather than to maximize income. Farmers adopt a number of strategies to manage and cope with agricultural risks. These include practices like crop and field diversification, non-farm ‘employment storage of stocks and strategic migration of family members. There are also institutions ranging from share tenancy to kinship, extended family and informal credit agencies. One major obstacle to risk sharing by farmers is that the same type of risks can affect a large number of farmers in the region. Empirical studies show that the traditional methods are not adequate. Hence there is a need for policy interventions, especially measures that cut across geographical regions.
Polices may aim at tackling agricultural risks directly or indirectly. Examples of risk-specific policies are crop insurance, price stabilization and the development of varieties resistant to pests and diseases. Policies which affect risk indirectly are irrigation, subsidized credit and access to information. No single risk-specific policy is sufficient to reduce risk and is without side effects, whereas policies not specific to risk influence the general situation and affect risks only indirectly. Crop insurance, as a policy measure to tackle agricultural risk directly, deserves careful consideration in the Indian context and in many other developing countries – because the majority of farmers depend on rain-fed agriculture and in many areas yield variability is the predominant cause of their income instability.

Q. The need for policy intervention mitigate risks in agriculture is because

[2013]

Solution:

Policy intervention can save the farmers from agricultural risks. Because Indian farmers are risk averse.
So they design inputs and cropping patterns to reduce risk not to maximize their profit.

QUESTION: 17

A number of empirical studies find that farmers are risk-averse, though only moderately in many cases. There is also evidence to show that farmers’ risk aversion results in cropping patterns and input use designed to reduce risk rather than to maximize income. Farmers adopt a number of strategies to manage and cope with agricultural risks. These include practices like crop and field diversification, non-farm ‘employment storage of stocks and strategic migration of family members. There are also institutions ranging from share tenancy to kinship, extended family and informal credit agencies. One major obstacle to risk sharing by farmers is that the same type of risks can affect a large number of farmers in the region. Empirical studies show that the traditional methods are not adequate. Hence there is a need for policy interventions, especially measures that cut across geographical regions.
Polices may aim at tackling agricultural risks directly or indirectly. Examples of risk-specific policies are crop insurance, price stabilization and the development of varieties resistant to pests and diseases. Policies which affect risk indirectly are irrigation, subsidized credit and access to information. No single risk-specific policy is sufficient to reduce risk and is without side effects, whereas policies not specific to risk influence the general situation and affect risks only indirectly. Crop insurance, as a policy measure to tackle agricultural risk directly, deserves careful consideration in the Indian context and in many other developing countries – because the majority of farmers depend on rain-fed agriculture and in many areas yield variability is the predominant cause of their income instability.

Q. Which of the following observations emerges from the above passage?

[2013]

Solution:

Agricultural risks can be tackled with many strategies like crop insurance, price stabilization, development of varieties resistant to pests and diseases. So no single risk specific policy is sufficient to reduce it.

QUESTION: 18

Malnutrition most commonly occurs between the ages of six months and two years. This happens despite the child’s food requirements being less than that of an older child. Malnutrition is often attributed to poverty, but it has been found that even in households where adults eat adequate quantities of food, more than 50 percent of children-under-five do not consume enough food. The child’s dependence on someone else to feed him/her is primarily responsible for the malnutrition. Very often the mother is working and the responsibility of feeding the young child is left to an older sibling. It is therefore crucial to increase awareness regarding the child’s food needs and how to satisfy them.

Q. According to the passage, malnutrition in children can be reduced.

[2013]

Solution:

Malnutrition occurs due to not eating adequate quantity of food. The knowledge of the food needs of younger children can curb this problem.

QUESTION: 19

Malnutrition most commonly occurs between the ages of six months and two years. This happens despite the child’s food requirements being less than that of an older child. Malnutrition is often attributed to poverty, but it has been found that even in households where adults eat adequate quantities of food, more than 50 percent of children-under-five do not consume enough food. The child’s dependence on someone else to feed him/her is primarily responsible for the malnutrition. Very often the mother is working and the responsibility of feeding the young child is left to an older sibling. It is therefore crucial to increase awareness regarding the child’s food needs and how to satisfy them.

Q. According to the author, poverty is not the main cause of malnutrition, but the fact that
1. taking care of younger ones is not a priority for working mothers.
2. awareness of nutritional needs is not propagated by the Public Health authorities.
Select the correct answer using the codes given below:

[2013]

Solution:

Taking care of a young child is often left to an older sibling by working mothers. Public health authorities do not find a mention in the passage hence (a) is correct.

QUESTION: 20

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 should be the practice/practices in good corporate governance?
1. Companies should always comply with labour and tax laws of the land.
2. Every company in the country should have a government representative as one of the independent directors on the board to ensure transparency.
3. The manager of a company should never invest his personal funds in the company.
Select the correct answer using the codes given below:

[2013]

Solution:

Statement 1 is correct as it can be inferred from the information given in the passage that companies shall comply with all the laws of land.