2015 GS Paper I, all questions
UPSC Prelims 2015 · GS Paper I
Question 94: Economy and Social Development
The problem of international liquidity is related to the non-availability of
agoods and services
bgold and silver
cdollars and other hard currencies
dexportable surplus
AnswerUPSC’s answer is (c).
International liquidity means the stock of assets accepted by all countries to settle international payments. The problem arises when countries run short of these assets, chiefly dollars and other hard currencies, which hinders their trade and payments. It is not a shortage of goods, services, precious metals or exports.
Why each option is right or wrong
- (a) A shortage of goods and services is a supply problem, not international liquidity.
- (b) The shortage concerns reserve currencies such as the dollar, not gold or silver as such.
- (c) Correct: lack of dollars and other hard currencies is the liquidity problem.
- (d) A shortage of exportable surplus is a trade capacity problem.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2015, General Studies Paper I, Series A. The paper on upsc.gov.in.