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What was the primary function of the European Payments Union (EPU) in the early days of European economic cooperation?
  • a)
    To establish a common currency for all European countries.
  • b)
    To encourage trade by improving the system of payments between member states.
  • c)
    To regulate competition and prevent monopolies in the European market.
  • d)
    To oversee the military defense of European nations.
Correct answer is option 'B'. Can you explain this answer?
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What was the primary function of the European Payments Union (EPU) in ...
The primary function of the European Payments Union (EPU) in the early days of European economic cooperation was to encourage trade by improving the system of payments between member states. This helped facilitate trade and economic integration.
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Passage 4The period between 1880 and 1900 was a boom time for American politics. The country was for once free of the threat of war, and many of its citizens were living comfortably. However, as these two decades went by, the American farmer found it harder and harder to live comfortably. Crops such as cotton and wheat, once the bulwark of agriculture, were selling at prices so low that it was nearly impossible for farmers to make a profit. Furthermore, improvements in transportation allowed foreign competition to materialize, making it harder for American farmers to dispose of surplus crop. Finally, years of drought in the Midwest and the downward spiral of businesses in the 1890s devastated many of the nations farmers. As a result of the agricultural depression, many farm groups, most notably the Populist Party, arose to fight what farmers saw as the reasons for the decline in agriculture. During the last twenty years of the nineteenth century, many farmers in the United States saw monopolies and trusts, railroads, and money shortages and the demonetization of silver as threats to their way of life, though in many cases their complaints were not valid.The growth of the railroad was one of the most significant elements in American economic growth. However, in many ways, the railroads hurt small shippers and farmers. Extreme competition between rail companies necessitated some way to win business. To do this, many railroads offered rebates and drawbacks to larger shippers who utilized the railroads services. However, this practice hurt smaller shippers, including farmers, for often times railroad companies would charge more to ship products short distances than they would for long trips. The rail companies justified this practice by asserting that if they did not provide such rebates, they would not make enough profit to stay in business. In his testimony to the Senate Cullom Committee, George W. Parker stated, "... the operating expense of this road...requires a certain volume of business to meet these fixed expenses....in some seasons of the year, the local business of the road...is not sufficient to make theearnings...when we make up a train of ten of fifteen cars of local freight...we can attach fifteen or twenty cars...of strictly through business. We can take the latter at a very low rate than go without it..." Later, when asked of the consequences of charging local traffic the same rate as through freight, Mr. Parker responded, "Bankruptcy, inevitably and speedy ..." While the railroads felt that they must use this practice to make a profit, the farmers were justified in complaining, for they were seriously injured by it. The railroads regularly used rebates and drawbacks to help win the business of large shippers, and made up this loss in profit by increasing the cost to smaller shippers such as farmers. As a result, many farmers, already hurt by the downslide in agriculture, were ruined. Thus, the farmers of the late nineteenth century had a valid complaint against railroad shippers, for these farmers were hurt by the unfair practices of the railroads.Near the end of the nineteenth century, business began to centralize, leading to the rise of monopolies and trusts. Falling prices, along with the need for better efficiency in industry, led to the rise of such companies as Carnegie Steel and Standard Oil, which controlled a majority of the nations supply of raw steel and oil, respectively. The rise of these monopolies and trusts concerned many farmers, for they felt that the disappearance of competition would lead to erratic and unreasonable price rises that would hurt consumers. James B. Weaver, the Populist partys presidential candidate in the 1892 election, summed up the feelings of many Americans of the period in his work, "A Call to Action: An Interpretation of the Great Uprising". He wrote, "It is clear that trusts are...in conflict with the Common law. They are monopolies organized to destroy competition and restrain trade.... Once they secure control of a given line, they are master of the situation... They can limit the price of the raw material so as to impoverish the producer, drive him to a single market, reduce the price of every class of labor connected with the trade, throw out of employment large numbers persons...and finally...they increase the price to the consumer...."Accordingly, it appears that the main weapons of the trust are threats, intimidation, bribery, fraud, wreck, and pillaging. However, the facts refute many of Weavers charges against the monopolies. While it is true that many companies used questionable means to achieve their monopoly, many were not out to crush competitors. To the contrary, John D. Rockefeller, head of Standard Oil, competed ruthlessly not to crush other refiners but to persuade them to join Standard Oil and share the business so all could profit. Furthermore, the fear that the monopolies would raise prices unreasonably was never realized. Prices tended to fall during the latter part of the 1800s creating what some have called a "consumers millennium".Q. According to the passage, the advent of what component of business made it difficult for farmers to dispose of surplus materials?

Passage 4The period between 1880 and 1900 was a boom time for American politics. The country was for once free of the threat of war, and many of its citizens were living comfortably. However, as these two decades went by, the American farmer found it harder and harder to live comfortably. Crops such as cotton and wheat, once the bulwark of agriculture, were selling at prices so low that it was nearly impossible for farmers to make a profit. Furthermore, improvements in transportation allowed foreign competition to materialize, making it harder for American farmers to dispose of surplus crop. Finally, years of drought in the Midwest and the downward spiral of businesses in the 1890s devastated many of the nations farmers. As a result of the agricultural depression, many farm groups, most notably the Populist Party, arose to fight what farmers saw as the reasons for the decline in agriculture. During the last twenty years of the nineteenth century, many farmers in the United States saw monopolies and trusts, railroads, and money shortages and the demonetization of silver as threats to their way of life, though in many cases their complaints were not valid.The growth of the railroad was one of the most significant elements in American economic growth. However, in many ways, the railroads hurt small shippers and farmers. Extreme competition between rail companies necessitated some way to win business. To do this, many railroads offered rebates and drawbacks to larger shippers who utilized the railroads services. However, this practice hurt smaller shippers, including farmers, for often times railroad companies would charge more to ship products short distances than they would for long trips. The rail companies justified this practice by asserting that if they did not provide such rebates, they would not make enough profit to stay in business. In his testimony to the Senate Cullom Committee, George W. Parker stated, "... the operating expense of this road...requires a certain volume of business to meet these fixed expenses....in some seasons of the year, the local business of the road...is not sufficient to make theearnings...when we make up a train of ten of fifteen cars of local freight...we can attach fifteen or twenty cars...of strictly through business. We can take the latter at a very low rate than go without it..." Later, when asked of the consequences of charging local traffic the same rate as through freight, Mr. Parker responded, "Bankruptcy, inevitably and speedy ..." While the railroads felt that they must use this practice to make a profit, the farmers were justified in complaining, for they were seriously injured by it. The railroads regularly used rebates and drawbacks to help win the business of large shippers, and made up this loss in profit by increasing the cost to smaller shippers such as farmers. As a result, many farmers, already hurt by the downslide in agriculture, were ruined. Thus, the farmers of the late nineteenth century had a valid complaint against railroad shippers, for these farmers were hurt by the unfair practices of the railroads.Near the end of the nineteenth century, business began to centralize, leading to the rise of monopolies and trusts. Falling prices, along with the need for better efficiency in industry, led to the rise of such companies as Carnegie Steel and Standard Oil, which controlled a majority of the nations supply of raw steel and oil, respectively. The rise of these monopolies and trusts concerned many farmers, for they felt that the disappearance of competition would lead to erratic and unreasonable price rises that would hurt consumers. James B. Weaver, the Populist partys presidential candidate in the 1892 election, summed up the feelings of many Americans of the period in his work, "A Call to Action: An Interpretation of the Great Uprising". He wrote, "It is clear that trusts are...in conflict with the Common law. They are monopolies organized to destroy competition and restrain trade.... Once they secure control of a given line, they are master of the situation... They can limit the price of the raw material so as to impoverish the producer, drive him to a single market, reduce the price of every class of labor connected with the trade, throw out of employment large numbers persons...and finally...they increase the price to the consumer...."Accordingly, it appears that the main weapons of the trust are threats, intimidation, bribery, fraud, wreck, and pillaging. However, the facts refute many of Weavers charges against the monopolies. While it is true that many companies used questionable means to achieve their monopoly, many were not out to crush competitors. To the contrary, John D. Rockefeller, head of Standard Oil, competed ruthlessly not to crush other refiners but to persuade them to join Standard Oil and share the business so all could profit. Furthermore, the fear that the monopolies would raise prices unreasonably was never realized. Prices tended to fall during the latter part of the 1800s creating what some have called a "consumers millennium".Q. Which of the following is a possible final sentence to the final paragraph?

PASSAGE IIIThe need for Competition Law becomes more evident when foreign direct investment (FDI) is liberalised. 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 liberisation of FDI. Subsequently, the parent companies overseas merge. With the affiliates no longer remaining independent, competition in the host country 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?

PASSAGE IIIThe need for Competition Law becomes more evident when foreign direct investment (FDI) is liberalised. 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 liberisation of FDI. Subsequently, the parent companies overseas merge. With the affiliates no longer remaining independent, competition in the host country 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. What is the inference from this passage?

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What was the primary function of the European Payments Union (EPU) in the early days of European economic cooperation?a)To establish a common currency for all European countries.b)To encourage trade by improving the system of payments between member states.c)To regulate competition and prevent monopolies in the European market.d)To oversee the military defense of European nations.Correct answer is option 'B'. Can you explain this answer?
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What was the primary function of the European Payments Union (EPU) in the early days of European economic cooperation?a)To establish a common currency for all European countries.b)To encourage trade by improving the system of payments between member states.c)To regulate competition and prevent monopolies in the European market.d)To oversee the military defense of European nations.Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about What was the primary function of the European Payments Union (EPU) in the early days of European economic cooperation?a)To establish a common currency for all European countries.b)To encourage trade by improving the system of payments between member states.c)To regulate competition and prevent monopolies in the European market.d)To oversee the military defense of European nations.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What was the primary function of the European Payments Union (EPU) in the early days of European economic cooperation?a)To establish a common currency for all European countries.b)To encourage trade by improving the system of payments between member states.c)To regulate competition and prevent monopolies in the European market.d)To oversee the military defense of European nations.Correct answer is option 'B'. Can you explain this answer?.
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