Question

The convergence theory states that:

Question 64 options:

	the rule of 70 applies.
	poor countries tend to converge together and stagnate thereafter.
	rich countries tend to leapfrog ahead maintaining the gap in global development as far as economic growth is concerned.
	poorer countries will grow faster than rich ones.

Over the last several years, Canada has:

Question 65 options:

	has tended to run trade deficits.
	has tended to run trade surpluses.
	has run trade surpluses at some times and trade deficits at other times.
	has tended to have pretty balanced trade.

Complete the following sentence. Commodity-backed money is:

Question 66 options:

	money used for the exchange of valuable commodities.
	money in which people have faith in its value.
	money created by fiat (by rule).
	any form of money that can be legally exchanged into a fixed amount of an underlying item.

Answer 1

Ques 64.

The convergence theory states that as poorer economies move from early days of industrialization to more advanced stages they tend to catch up with rich economies in terms of development and growth rates. On the other hand, the rich economies have already reached a level of technological advancement where their growth rates tend to be lower.

Ans. (D)

Ques 65.

Between 1970 and 2008 Canada had been recording trade surpluses every year. From 2009 onwards, the trade balance shifted to the deficit. However, in 2011 and 2014, Canada ran a trade surplus.

Thus, over the last few years, Canada has tended to run trade surplus at some times and trade deficits at other times.

Ans. (C)

Ques 66.

Commodity-backed money is money where the quantity of money is backed by the underlying commodity.

For example, In the 1990s, when the world used to trade based on gold standards, the system worked such that the currency holders could trade in their currency for a specified amount of gold it mentioned.

Ans. (D)