International Economy - Current Affairs Questions and Answers

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1)   India’s forex reserves rose past which mark for the first time on Sept 8, 2017, according to RBI?
- Published on 18 Sep 17

a. US $300 billion
b. US $380 billion
c. US $400 billion
d. US $410 billion
Answer  Explanation 

ANSWER: US $400 billion

India’s foreign-exchange reserves rose past US$400 billion for the first time ever, strengthening policy makers’ buffers ahead of an expected reduction in US stimulus.

The stockpile stood at US$400.7 billion Sept 8 the Reserve Bank of India indicated.

With the Federal Reserve set to shrink its balance sheet—details of which could be announced next week—the holdings may help the rupee withstand any volatility even if global funds turn away from India’s slowing economy.

It is predicted by experts that India’s current account deficit will double to 1.4 percent of gross domestic product in the year through March 2018.

That’s still far lower than the unprecedented 4.8 per cent of GDP touched in 2013, when the Fed had first signalled intent to curb its massive bond-buying program.

Those “taper tantrums” triggered a sharp slide in the rupee and reserves depleted to around US$275 billion as the central bank struggled to buoy the currency.

India’s holdings are about US$376 billion now if stripped of gold, enough to pay for about a year of imports.

The pace of reserve accretion has been one of the strongest within Asia in the past 12 months, according to analysts at Morgan Stanley.

The RBI last month cut interest rates to the lowest in seven years to boost flagging growth.

At the same time, it has been absorbing surplus funds in the banking system to keep price pressures under control. Inflation has been rising sharply from record lows, and the central bank wants it to stay near the 4 per cent mid-point of its target range.

The rise in foreign exchange reserves comes as yield-hungry global investors take advantage of high real rates of interest and a rupee that has gained more than 6 per cent this year against the dollar.

Foreign holdings of rupee debt have risen by just US$326 million so far in September and August’s 126-billion rupee inflow was the smallest in six months, as investors have used up almost all of their eligible quotas to buy Indian bonds.

2)   Which country's socialist leader and president declared total independence from IMF and World Bank?
- Published on 27 Jul 17

a. Bolivia
b. Venezuela
c. Mexico
d. Spain
Answer  Explanation  Related Ques

ANSWER: Bolivia

Bolivia’s President Eva Morales declared on twitter that his nation has achieved “total independence” from the IMF and the World Bank

The socialist leader published his comments after meeting with his peers Friday at a gathering in Argentina of the Mercosur, a sub-regional economic bloc.

Bolivia begins its process of becoming a full member of the Mercosur, also called the Southern Common Market, which includes Argentina, Brazil, Paraguay, Uruguay, and Venezuela.

Until now Bolivia has served as an associate member along with Chile, Columbia, Ecuador, Guyana, Peru, Suriname.

Also on Friday, President Morales accused world powers of intervening in oil rich nations such as Libya, Iraq, and Venezuela to “appropriate resources”.

Historically, Bolivia has relied heavily on the IMF for loans to fund their socialist government expenditures.

President Morales has even previously quipped that his nations past dependence on the agencies was so great that the IMF had an office in government headquarters and even participated in their meetings.

President Morales become Bolivia’s first indigenous leader in 2006, and gained popularity after the nations popular uprising known as “The Cochabamba Water War”, which occurred in 2000, and was waged against the U.S.-based Bechtel Corporation over water privatization.

The World Bank at the time, which was closely associated with the Bechtel Corporation, shed light on the growing debt issues facing the country through policy publications.

According to a report from teleSUR, some of Bolivia’s largest resistance struggles in the last 60 years have targeted the economic policies carried out by the IMF and the World Bank.

3)   China's economy has expanded at a faster rate, reaching what GDP value in Q2 2017?
- Published on 18 Jul 17

a. 6.6 percent
b. 6.7 percent
c. 6.8 percent
d. 6.9 percent
Answer  Explanation 

ANSWER: 6.9 percent

China's economy expanded faster-than-expected in the second quarter, setting the country on course to comfortably meet its 2017 growth target.

This is also giving policymakers room to tackle big economic challenges ahead of key leadership changes later this year.

The boost to growth was in part driven by firmer exports and production, in particular steel, which could heighten trade tensions as the United States and China begin economic talks this week.

US President Donald Trump has made the US trade deficit with China a top agenda item in bilateral talks and has also flagged the steel trade as a point of contention.

China's gross domestic product rose 6.9 per cent in the second quarter from a year earlier, the same rate as the first quarter, the National Bureau of Statistics said on 17th July 2017.

That was higher than analysts' expectations of a 6.8 per cent expansion.

Economic data from the second quarter has prompted a number of analysts to upgrade their GDP forecasts for China for 2017.

Some moderation in growth is expected later this year as policymakers' efforts to rein in property and debt risks weigh on activity.

GDP growth will remain robust in the second half but slower than the first half, due to the high base.

The robust numbers kept world shares near a record high and briefly helped China's major stock indexes recoup earlier losses.

The second quarter numbers put the economy on a strong footing to meet China's growth target of around 6.5 per cent in 2017, which would give policymakers room to defuse financial risks.

While growth in the high-flying property sector has cooled this year, a rebound in exports after several years of decline has helped prevent any broader slowdown in China's economy.

Retail spending and factory output were also bright spots in the first half. Retail sales growth picked up to 10.8 per cent in the second quarter from 10.0 per cent in the first quarter, a Reuters calculation based on official data showed.

Factory output also picked up in the second quarter, though the 6.9 per cent growth for the first half was only a slight pickup from recent quarters.

4)   India has emerged as the ___ largest exporter of agri products internationally according to Commerce Ministry.
- Published on 14 Jun 17

a. 5th
b. 6th
c. 7th
d. 8th
Answer  Explanation 


Commerce Secretary Rita Teaotia, while addressing the 22nd APEDA Export award function in New Delhi on 12 June 2017, announced that India has emerged as the 7th largest exporter of agri-products globally.

There is a significant increase in the exports of food products from the country and it represents more than 12 percent of total exports.

Total merchandise exports during 2016-2017 are more than 276 billion dollars out of which agricultural exports comprised nearly 33 billion dollars.

Indian food products are majorly exported to countries such as Vietnam, UAE, Saudi Arabia, USA, Iran, Iraq and Nepal.

Further, the exporters even in times of economic slowdown have continued to grow and added that opportunities in newer markets have to be searched for further growth.

The awards function witnessed the presentation of 82 APEDA awards for the year 2014-2015 and 2015-2016. It included 2 Diamond Trophies, 33 Gold, 29 Silver and 18 Bronze awards.

APEDA: Know More

  • It is an apex body of the Ministry of Commerce, Government of India, to promote the export of agricultural commodities and processed food products.
  • APEDA links Indian exporters to global markets besides providing comprehensive export-oriented services.
  • It provides referral services and suggests suitable partners for joint ventures.
  • Its export basket ranges from typically Indian ethnic products like pickles, chutneys, sauces to rice, honey, fresh and processed fruits and vegetables, beverages, poultry, agri-products, food grains and other Indian delicacies.

5)   What does UNOSSC stand for, in the context of the UN?
- Published on 12 Jun 17

a. United Nation’s Office for Southern-South Cooperation
b. United Nation’s Office for South-Southern Cooperation
c. United Nation’s Office for South-South Cooperation
d. United Nation’s Office for Southern-Southern Cooperation
Answer  Explanation 

ANSWER: United Nation’s Office for South-South Cooperation

India and the United Nations Office for South-South Cooperation (UNOSSC) on 8 June 2017 launched a partnership fund to support the Sustainable Development Goals (SDGs) across the developing world.

The fund was launched on the occasion of the World Oceans Day at a special ceremony held at the Permanent Mission of India to the UN.

The India-UN Development Partnership Fund will implement country-level projects that are catalytic towards achieving the 17 Sustainable Development Goals of the 2030 Agenda.

The initiative is aimed at reducing poverty and hunger, improving health, education and equality, and expanding access to clean water, energy and livelihoods.

The fund will focus on Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

CEWSPIC: Know More

  • Initially, the fund will start with an initial contribution of USD 1 million for its first project Climate Early Warning System in Pacific Island Countries (CEWSPIC).
  • CEWSPIC Project was formulated by India and the UN Development Programme in consultation with the governments of Cook Islands, Kiribati, Marshall Islands, Micronesia, Nauru, Solomon Islands and Tonga.
  • The project will increase resilience to natural disasters in these seven Pacific island countries.

6)   India moved the WTO against US on what matter?
- Published on 12 Jun 17

a. Imposition of high import duty on certain Indian iron and steel products
b. Imposition of high import duty on certain Indian steel products
c. Imposition of high import duty on certain Indian iron products
d. Imposition of high import duty on certain Indian zinc products
Answer  Explanation 

ANSWER: Imposition of high import duty on certain Indian steel products

India has moved the World Trade Organisation (WTO) against the US as it has not yet complied with the rulings of the WTO pertaining to imposition of high import duty on certain Indian steel products.

In December 2014, the WTO’s appellate body pronounced a ruling against the act of US which is imposing high import duty on certain Indian steel products.

It had ruled that the imposition of import duty on steel products was inconsistent with various provisions of the Agreement on Subsidies and Countervailing Measures.

The Agreement on Subsidies and Countervailing Measures (the SCM Agreement) - addresses two separate but closely related matters

1. The multilateral disciplines on the use of subsidies and the
2. Conditions under which Members may apply countervailing measures.

India has sought consultation with the US for compliance of the WTO’s rulings.

If the US refuses to comply then India has planned to approach the WTO’s compliance panel.

In order to comply with the WTO rulings on countervailing duties on imports of hot-rolled carbon steel products from India, the US needs to amend its domestic norms.

Earlier, the US had moved the arbitration panel of the World Trade Organisation against India as it complained that India had failed to remove trade restrictions on American poultry.

WTO: Know More

  • The WTO is an inter-governmental organization for governments to negotiate global trade agreements and progressively liberalizing trade.
  • The WTO operates a system of trade rules that apply to all its members. The World Trade Organisation is also a place for Member governments to settle their trade disputes.
  • It’s located in Geneva, Switzerland.
  • It was established on 1 January 1995 and its official languages are English, French and Spanish. Countervailing duties are those duties that are imposed by a country to counter the negative impact of import subsidies to protect domestic producers.

7)   Illicit outflow of black money in 2014 was  $____ billion, according to GFI.
- Published on 03 May 17

a. 21
b. 31
c. 25
d. 35
Answer  Explanation 


Over $21 billion worth of black money was illegally taken out of India in 2014, according to the latest report by the international watchdog Global Financial Integrity (GFI).

This illicit outflow was nearly 19% more than that recorded the previous year.

GFI has, for the first time, given information on the equally damaging inflow of illegal funds in this report, with India being the destination of a staggering $101 billion in 2014, up nearly 11% over the previous year.

Globally, the report estimates that between $620 and $970 billion was drained out of the developing world, primarily through trade fraud.

Illicit inflows are estimated at a mind boggling $1.4-2.5 trillion.

Combined, illicit outflows and inflows accounted for 14-24% of total developing country trade over 2005-2014.

This year's GFI report stands out from its previous reports for adopting a much more rigorous method of collecting and analysing information on international trade and balance of payments.

Besides using IMF global data on direction of trade, the report has included information from other sources to plug gaps.

Inclusion of Swiss data on gold exports, that was earlier omitted, has led to a drastic revision of India's outflow and inflow figures.

Although both the lower and higher ends are described by the economists as “conservative” because it is difficult to trace all illicit transactions, the higher-end estimates are closer to previous years' estimates while the lower ones take into account only trade gaps with advanced economies.

About 87% of the global illicit financial flows are happening through trade misinvoicing

Recommending a slew of measures, the report primarily suggests a much better trained and equipped customs staff and stricter scrutiny of trade deals.

It also indicates global cooperation in exchanging information on bank accounts, especially in tax havens.

8)   Which country has topped the WEF list on travel and tourism competitiveness?
- Published on 19 Apr 17

a. Spain
b. India
c. Germany
d. UK
Answer  Explanation 


Spain has, once again, topped the World Economic Forum's (WEF) list on travel and tourism competitiveness.

WEF's biennial report is based on the theme 'paving the way for a more sustainable and inclusive future'. France and Germany continue to be ranked second and third respectively, depicting no change from the 2015 edition.

Surprise entry in the top five countries is Japan, which is ranked at number four, a jump of five places from the last time the rankings were released.

Japan is said to have a great tourist inflow because of two-fold reasons of 'unique cultural resources and business'.

India was ranked at 40, a considerable jump of 12 places from 2015. Asia-Pacific also emerged as the most-improved region.

War-torn country Yemen was ranked the last of the analysed nations, at 136, still a jump of two places. African countries Burundi and Chad were ranked 134 and 135, respectively.

Azerbaijan at 71st position is one of the most improved economies this year, rising 13 places in the global rankings.

According to the report, the travel and tourism industry contributed $7.6 trillion to the global economy (10.2 per cent of global GDP) and generated 292 million jobs (1 in 10 jobs on the planet) in 2016.

9)   Which country's economy beat its government target in the first quarter of 2017?
- Published on 18 Apr 17

a. China
b. India
c. Pakistan
d. Bangladesh
Answer  Explanation 


China’s economy beat the government target and grew by 6.9 per cent in the first quarter of 2017 mainly due to a surge in infrastructure investment and export.

The growth was well above the full-year target of 6.5 per cent, and the 6.8 per cent increase registered in the fourth quarter of 2016, as per China’s National Bureau of Statistics.

The GDP reached 18.07 trillion yuan ($2.63 trillion) in the first quarter.

The official data also suggested a pick-up in domestic consumption as February retail sales jumped 10.9 per cent from the previous year.

China is trying to boost domestic consumption to shift focus of its export reliant economy, which is also driven by massive state investments in improving the infrastructure.

Also, China’s exports, which were on a declining trend in recent years, showed increase in Q1 in Yuan terms.

China’s exports in yuan-denominated terms rose 14.8 per cent year-on-year in the first quarter, while imports increased 31.1 per cent.

Foreign trade volume reached 6.2 trillion yuan (about $902 billion) in the first quarter, up 21.8 per cent year on year.

China’s fixed-asset investment (FAI) grew 9.2 per cent year-on-year in the first three months of 2017, quickening from the 8.9 per cent growth registered in the first two months.

The FAI includes capital spent on infrastructure, property, machinery and other physical assets.

Private sector FAI, which accounts for more than 60 percent of the total FAI, grew 7.7 per cent in the first quarter.

This is accelerating from the 6. 7 per cent registered in the first two months.

FAI by state-owned enterprises climbed 13.6 per cent year on year during the period, and infrastructure investment expanded 23.5 per cent in the first quarter.

China’s value-added industrial output, an important economic indicator, expanded 6.8 per cent year on year in the first quarter, compared with the 6.3 per cent increase for January to February, the NBS data said.

The 6.8 per cent growth rose from the 5.8 per cent increase in the same period of 2016. It was also higher than the 6 per cent annual gain seen in 2016, NBS said.

China Banking Association has estimated country’s bad loans totalled to a whopping $220 billion last year.

Bad loans by commercial banks totalled 1.5 trillion yuan ($220 billion) at the end of 2016.

The biggest borrower is urban infrastructure projects, followed by the medical sector.

10)   What are the features of the new 12 sided British pound coin?
- Published on 29 Mar 17

a. Hologram that changes from a pound symbol to a numeral one.
b. Micro lettering and milled edges
c. Larger in diameter but lighter than round pound
d. All of the above
Answer  Explanation 

ANSWER: All of the above

A new 12-sided British pound coin is entering circulation amid concern that the round pound was too easy to counterfeit.

The new coin introduced on 28th March 2017 is intended to be the most secure in the world, featuring a hologram that changes from the pound symbol to the numeral one.

It also has micro-lettering and milled edges.

It is slightly larger in diameter, but lighter than the round pound.

And despite its many sides, the Royal Mint says the new coin will roll and has been tested for the last three years to make sure it will work in vending machines.

The old coin and the new coin will co-exist for a period of around six months. It’s the first new pound coin to be introduced in 30 years.

It is considered the world's most secure coin.

Bimetallic with different inner and outer rings, a hidden identification system, a hologram, micro lettering with a diameter of 23.43 mm.

It is thinner and lighter than the old coin which ceases to be legal tender on Oct 15, 2017. With a thickness of 2.8mm and weight of 8.75g, the coin is unique in many ways.

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