'European Stability Mechanism', sometimes seen in the news, is an
- A.agency created by EU to deal with the impact of millions of refugees arriving from Middle East
- B.agency of EU that provides financial assistance to eurozone countries
- C.agency of EU to deal with all the bilateral and multilateral agreements on trade
- D.agency of EU to deal with the conflicts arising among the member countries
Correct answer
Explanation
The correct answer is B, agency of EU that provides financial assistance to eurozone countries. The European Stability Mechanism is a permanent rescue fund for the countries that use the euro. It was set up by a treaty among the eurozone members and began work in 2012, taking over from the temporary European Financial Stability Facility created during the sovereign debt crisis. It raises money on the markets and lends it to a eurozone government that cannot borrow on its own, on condition that the country carries out agreed reforms. Its loans helped Spain recapitalise its banks and supported Cyprus and Greece. Its seat is in Luxembourg. Option A is wrong because refugee and asylum matters are handled by other EU bodies and funds, not by a financial rescue fund. Option C is wrong because trade agreements are negotiated by the European Commission under the EU's common commercial policy. Option D is wrong because disputes among member states over EU law go to the Court of Justice of the European Union. Exam tip: ESM is the eurozone's lender of last resort for governments, based in Luxembourg since 2012.
Practice Questions
View allAmong the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?
- A.Spices
- B.Fresh fruits
- C.Pulses
- D.Vegetable oils
Show answer
Edible vegetable oils are India's largest agricultural import by value, and they have stayed at the top since well before this question was set.
Read the full explanation →'Broad-based Trade and Investment Agreement (BTIA)' is sometimes seen in the news in the context of negotiations held between India and
- A.European Union
- B.Gulf Cooperation Council
- C.Organization for Economic Cooperation and Development
- D.Shanghai Cooperation Organization
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The Broad-based Trade and Investment Agreement was the name given to the free trade agreement that India and the European Union began negotiating in 2007.
Read the full explanation →Consider the following statements : 1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries. 2. In terms of PPP dollars, India is the sixth largest economy in the world. Which of the statements given above is/are correct?
- A.1 only
- B.2 only
- C.Both 1 and 2
- D.Neither 1 nor 2
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Statement 1 is the definition of purchasing power parity, while statement 2 understates India's position. A PPP exchange rate is the rate at which the currency of one country would have to be converted into that of another to buy the same basket of goods and services in both.
Read the full explanation →What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'? 1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves. 3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future. Select the correct answer using the code given below :
- A.1 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
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The main and certain advantage of GST is that it subsumes many indirect taxes into one and creates a common national market.
Read the full explanation →Which one of the following is not a strategy in the Rainfed Area Development (RAD) scheme of India?
- A.Diversified farming
- B.Soil health management
- C.Adaptation of cluster-based approaches
- D.Optimizing canal irrigation
Show answer
Rainfed Area Development is meant for farms that depend on rain, not on canals, so improving canal irrigation is not one of its strategies.
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