Improve your English with English quiz. English Quiz to help you improve your score for exams like Bank, SSC, Railway, UPSC, UPSSSC, CDS, UPTET, KVS, DSSSB and other Government exams.
Directions (1-5): Read the passage carefully and answer the questions given below it. Certain words/ phrases have been given in bold to help you locate them while answering some of the questions.
It is heartening to observe that developing countries, led by China and other BRICS members, have successfully organised alternative sources of credit flows aiming for financial stability, growth and development. By avoiding IMF-type loan conditionalities and the dominance of the US dollar, these new institutions provide a much-needed change in the global financial architecture.
This assumes significance in the context of the demands being imposed on Greece by the troika of the IMF, the ECB and the EU. That the troika should persist with a narrow disciplinary approach speaks of the limitations of the current system.
These limitations bring to the fore the need for institutional alternatives. The launch of financial institutions by BRICS may achieve a superior global financial order. The financial institutions set up for the purpose include the Asian Infrastructure Investment Bank (AIIB), the BRICS (or New) Development Bank (NDB) , the BRICS-led Contingency Reserve Fund (CRF), and the Silk Road projects.
Of these, the NDB will have $50 billion as starting capital contributed by individual members, to be increased to $100 billion over time. Brazil, Russia, India, China and South Africa will each make an initial contribution of $10 billion. No member can increase its share of capital without consent from the others. While new members from outside BRICS can become members of the NDB, the capital share of the initial members is not allowed to fall below 55 per cent. Members’ shares also determine their direct representation in the decision-making process. In addition to providing liquidity to its members to meet balance-of-payments crisis, the bank aims to provide protection against global liquidity pressures.
As for the CRF, scheduled to start lending in 2016, the five BRICS members have agreed to earmark $100 billion from their foreign exchange reserves to be used for swap lines. China contributes $41 billion, Brazil, Russia and India $18 billion each, and South Africa $5 billion. In other words, CRF is largely funded by Cnina. While controversies relating to the propriety of the NDB have fizzled down to some extent, the installation of the AIIB portal in June has rekindled the debate questioning the legitimacy of such institutions led by China.
The AIIB’s initial capital of $100 billion, while funded by contributions from members of BRICS, is open to contributions from non-members from advanced as well as developing countries, thus making for 57 founding members despite the opposition by the US and Japan. The UK was even subjected to reprisals by the US, which continues to oppose the idea of an Asian bank led by China.
The AIIB is commended as a vehicle for providing credit for infrastructure in developing countries, the need for which, by 2020, would be between $1.8 billion and $2.3 billion. It would reduce the dependence of countries on official sources, which in any case is meagre. The opposition to BRICS institutions from advanced countries indicates the mindset of Bretton Woods institutions and their patron, the US, to continue with the asymmetric power relations.
Reservations have continued to be voiced on the feasibility as well as desirability of BRICS institutions. There are concerns that the group will include dissimilar countries. Linking infrastructure projects to the proposed Silk Road raises questions, especially on the possibility of a hegemonic role by China. The CRF raises doubts about loans being managed without conditional clauses.
Reservations on the workability and desirability of BRICS-led financial institutions harp on the major role China is supposed to play in their management, mainly because of its disproportionate economic strength as the second largest economy in the world. This alternative seems to effectively challenge the prevailing order, managed and controlled by advanced countries in the West and led by the US.
Q1. What is/are the reasons behind setting up financial institutions by BRICS countries?
(A) To get rid of tough IMF-type loan conditionalities
(B) To help south Asian countries by making loans available at lower rates
(C) To bring about changes in the global financial architecture
(a) Only (A) and (B) (b) Only (B) and (C)
(c) Only (A) and (C) (d) All (A), (B) and (C)
(e) None of these
Q2. Which of the following statements is false in the context of the given passage?
(a) The BRICS (or New) Development Bank (NDB) will have $50 billion as starting capital, which will be increased to $100 billion over time.
(b) There is dominance of the US dollar in the IMF.
(c) No country other than BRICS can become a member of the NDB.
(d) Countries having more GDP have edge in the decision-making process.
(e) None of the above
Q3. What is/are the main aim(s) of BRICS Development Bank? Answer in the context of the passage.
(A) To sanction loans of $100 billion from their foreign exchange reserves
(B) To provide liquidity to its members to meet balance-of-payments crisis
(C) To provide protection against global liquidity pressures
(a) Only (A) and (B) (b) Only (B) and (C)
(c) Only (A) and (C) (d) All (A), (B) and (C)
(e) Only (C)
Q4. Who among the following has been assigned the task of providing credit for infrastructure in developing countries?
(a)AIIB (b) IMF
(c)ECB (d) EU
(e) All the above
Q5. What doubts have been raised about BRICS institutions?
(a) The CRF raises doubts about loans being managed without imposing any condition on borrower.
(b) Non-BRICS countries may create problems in smooth functioning of the NDB.
(c) Hegemonic role by China raises doubts
(d) Only (a) and (b) (e) Only (a) and (c)
Directions (6–10) Rearrange the following Six sentences (A), (B), (C), (D) and (E) in the proper sequence to form a meaningful paragraph; then answer the questions given below them—
- During the interrogation, officials even tested his academic proficiency with mathematics equations and computer science concepts, and despite giving “satisfactory answers” to convince the border police of his bona fide admission to NPU, Venkat was handcuffed at the end of the ordeal, deported to India and slapped with a five-year entry ban.
- But a different fate awaited him.
- Instead of disembarking the aircraft and travelling on to the NPU campus as he had hoped, Venkat was pulled out of the immigration line and grilled for three hours by U.S. Customs and Border Protection (CBP) officers in a well-lit, sparsely furnished room.
- In late 2015, Venkat, an Indian national, arrived at a popular West Coast airport in the U.S., brimming with excitement about the degree in computer science that he hoped to pursue at Northwestern Polytechnic University (NPU), in Fremont, California.
- He had diligently pulled together what he believed was a strong cache of evidence on his college admission and his financial record, including documents citing the value of the farmland his father owned and even his brother’s income certificate.
Q6. Which of the following should be the THIRD sentence after rearrangement ?
Q7. Which of the following should be the SECOND sentence after rearrangement ? (a) B
Q8. Which of the following should be the FIRST sentence after rearrangement ?
Q9. Which of the following should be the FIFTH sentence after rearrangement ?
Q100. Which of the following should be the FOURTH sentence after rearrangement ?
The reasons were: “By avoiding IMF-type loan conditionalities and the dominance of the US dollar, these new institutions provide a much-needed change in the global financial architecture.” For this refer to the first paragraph of the passage.
The passage says “While new members from outside BRICS can become members of the NDB”. Hence, (c) is the statement which is correct in context of the passage.
The passage says: “In addition to providing liquidity to its members to meet balance-of-payments crisis, the bank aims to provide protection against global liquidity pressures.” Hence, (B) and (C) are the correct options in context of the passage.
The passage says: “The AIIB’s initial capital of $100 billion, while funded by contributions from members of BRICS, is open to contributions from non-members from advanced as well as developing countries” . Hence, (a) is the correct option.
The doubts in context of the passage are: “Linking infrastructure projects to the proposed Silk Road raises questions, especially on the possibility of a hegemonic role by China. The CRF raises doubts about loans being managed without conditional clauses.” Hence, (e) is the correct option.
Directions (6-100): The correct sequence to form meaningful paragraph is DEBCA.
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