Indian Economy (International Economics) by Gaurav Bansal
- Category
GS -III - Test Date
26-06-2023 07:00 AM - Evaluated
Yes
Instruction:
- There will be 2 questions carrying 10 marks each. Write your answers in 150 words
- Any page left blank in the answer-book must be crossed out clearly.
- Evaluated Copy will be re-uploaded on the same thread after 2 days of uploading the copy.
- Discussion of the question and one to one answer improvement session of evaluated copies will be conducted through Google Meet with concerned faculty. You will be informed via mail or SMS for the discussion.
Question #1. Discuss the concept of de-dollarization and its implications for global financial stability. Substantiate your answer with relevant examples and case studies.
Question #2.Examine the causes and consequences of currency depreciation in an economy. Discuss the measures that can be taken to mitigate its adverse effects.
(Examiner will pay special attention to the candidate's grasp of his/her material, its relevance to the subject chosen, and to his/ her ability to think constructively and to present his/her ideas concisely, logically and effectively).
Model Answer
Question #1. Discuss the concept of de-dollarization and its implications for global financial stability. Substantiate your answer with relevant examples and case studies.
Ans
- Meaning of de-dollarization
- Why is dollar king of international trade and reserves:
- Explain Gold standard
- Discuss petro-dollar system
- Changing global economy and pressure on dollar
- Impact of de-dollarization
Negative:
- transition challenges,
- potential short-term instability, and
- limited global acceptance of alternative currencies
Positives:
- diversified risks
- strengthened national currencies
- increased monetary policy independence, and
- reduced vulnerability to US sanctions
- Way forward: It will take long time
Question #2.Examine the causes and consequences of currency depreciation in an economy. Discuss the measures that can be taken to mitigate its adverse effects.
Ans
A fall in the exchange rate is known as a depreciation in the exchange rate (or devaluation in a fixed exchange rate system). It means the currency is worth less compared to other countries.
Some of the leading causes of currency depreciation are:
- Lower export revenues
- A surge in imports
- Reduced monetary policy interest rates
- Central bank intervention
- Currency sold by traders and speculators in the market
Impact of Depreciation:
- Tends to increase the rate of economic growth and reduce unemployment.
- Tends to benefit exporters, but makes imports more expensive.
- Benefits the domestic tourist industry. It is more expensive to travel abroad and foreigners will find the UK more attractive.
- Consumers likely to see higher prices – at least for imported goods.
- Tends to cause inflation. This is because:
- imports more expensive
- higher domestic demand
- firms have less incentive to cut costs
- Tends to improve the current account deficit
How to mitigate:
- develop import substitution
- improve export elasticity
- Developing forex reserves
Procedure of Answer Writing:
To participate in the answer writing program, Register yourself for the test. Copies will be evaluated only for the registered students. Registration will be closed after the scheduled date.
Answer Writing, Copy Evaluation, and Marks Improvement Cycle:
Step 1 (Theme, Details & Its Topics):
- Every round of Answer writing initiative will be around a theme related to the Subject/Topic.
- Please read the theme and its description, and try to cover the topics given within the theme before writing the answer along with the sources.
Step 2 (Answer Writing):
- Questions will be uploaded on the portal on the scheduled date at 7:00 AM.
- You have to write your answers on an A4 size sheet leaving margins on both sides based on the UPSC pattern.
- Mention your name, email id, location, and phone number on the 1st page in the top right corner and the page number on each page.
- After writing the answers, Click pictures of each page of your answer sheet, merge them all in a single PDF and upload them in the upload section of the same question.
- Kindly submit your written answers before 7:00 PM. Only the first 100 copies will be considered for evaluation. No request for late submission or evaluation will be entertained once the 100 mark is reached.
Note: Answer sheets without the proper guidelines given above will not be accepted for evaluation.
Step 3 (Copy Evaluation): Copies will be evaluated in the next 72 hours of the test date. After evaluation, copies will be uploaded into your account. During the copy evaluation period, doubt clearing and discussion about the theme or topic of the test with respective mentors of the test will be done in the telegram group.
Step 4 (Mentorship): Evaluated copies will be sent to you via mail and also uploaded into your account on the website. After that a mentorship session for the marks improvement with respective faculty will be conducted on the Google Meet, so that students can get a wider perspective of the topics. Here you can discuss your evaluated copies also with the faculty. Top 5 copies of every test will be shared in the telegram group for reference.
Note: Aspirants who have not written the test can also participate in the mentorship session.
For Updates and Mentorship of the session, you will be notified through SMS or Telegram Group.
Note: You have to write your answers on an A4 size sheet leaving margins on both sides based on UPSC pattern. Mention Your Name on 1st page and Page Number on each page. After writing the answer, Click pictures of each page of your answer sheet, merge them all in a single PDF and upload in the Your Answer Copy section of the same question.
Copy submission is closed now for this test.
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