Ten MCQs on current International and national events - 200

PRERNA FOR IAS

(ASSOCIATE OF SAMKALP)

A-Category MCQs -200

Q1. Rupee Depreciation, RBI Intervention and Energy Security

In the context of the RBI's reported foreign-exchange interventions, consider the following statements:

1. Depreciation of the Indian rupee can increase the rupee cost of crude-oil imports even when international oil prices remain unchanged.
2. RBI intervention in the foreign-exchange market necessarily requires maintaining a permanently fixed exchange rate.
3. Selling foreign currency from official reserves can help moderate excessive exchange-rate volatility.
4. Diversification of energy imports and reduced dependence on fossil fuels can improve India's long-term external-sector resilience.

Which of the statements given above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1, 2, 3 and 4

Correct Answer: (b) 1, 3 and 4 only

Explanation: The supplied summaries discuss RBI measures to provide dollars to public-sector oil companies and reduce excessive currency volatility. When the rupee depreciates, importers must pay more rupees for the same dollar-denominated purchase. This can increase imported inflation. Statement 2 is incorrect because India follows a managed floating exchange-rate system. The RBI may intervene without maintaining a fixed exchange rate. Selling dollars can moderate volatility, although it may reduce foreign-exchange reserves. Long-term stability requires stronger exports, energy diversification and improved economic fundamentals. Hidden trap: Exchange-rate intervention does not necessarily mean exchange-rate fixing. Elimination clue: The expression permanently fixed exchange rate makes Statement 2 incorrect.

Q2. Manipur Conflict, Article 21 and Internal Security

With reference to constitutional governance in conflict-affected regions, consider the following statements:

1. Article 21 protects the right to life and personal liberty.
2. Security operations alone are sufficient to guarantee permanent reconciliation between communities affected by ethnic violence.
3. Impartial investigation and rehabilitation of displaced persons can contribute to restoration of public trust.
4. Equal protection of law requires public authorities to protect individuals irrespective of their community identity.

Which of the statements given above are correct?

(a) 1, 2 and 3 only (b) 2, 3 and 4 only (c) 1, 3 and 4 only (d) 1, 2, 3 and 4

Correct Answer: (c) 1, 3 and 4 only