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1. Basic Concepts

Adam Smith is renowned as ‘Father of Modern Economics’.

Adam Smith is the writer of book ‘Wealth of Nations’.

The main emphasis of Keynesian economics is on expenditure.

Adam Smith coined the concept of ‘Paradox of Thrift’.

The price of a commodity is the same as average revenue.

Income and consumption are directly related.

Minimum payment of the factor of production is called transfer payments.

The demand in economics means demand backed by purchasing power.

Equilibrium price is the price when supply is equal to demand.

The law of increasing returns means increasing cost.

Zero price elasticity of demand means whatever the change in price, there is absolutely no change in
demand.

Keynesian theory advocates a mixed economy with a large role of government and public sector.

Which market structure is the demand curve of the market represented by the demand curve of
rm?
Monopoly

A market in which there are a few number of large rms is called as Oligopoly.

Gresham’s Law comes into operation when good money is hoarded.

They are self-employed and self-funded and since their land holdings are large enough to support
the use of a pair of bullocks, they came to be known as bullock capitalists.

2. National Income and Economic Development

National income is the Net National Product at factor cost.

National income is also called as GNP at factor cost.

Dr P C Mahalanobis was the head of national income Committee, constituted in 1949.

In 1948-49, the estimates of national income was released by the government for the rst time.

In India, national income is calculated by the Central Statistical O ce in 1st April to 31st March.

The most appropriate measure of a country's economic growth is its per capita real income.
On the basis of Per Capita Income, the lifestyle standard of person can be identi ed.

The Per Capita Income in India was ₹ 20 in 1867-68, was ascertained for the rst time by Dadabhai Naoroji.

Personal Disposable Income = Personal Income – Direct taxes paid by households and
miscellaneous fees, nes etc.
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A ‘Transfer Income’ is an income which is not produced by any production process.

The largest contributor to the gross domestic savings of India is the household sector.

Simon Kuznet economists rstly introduced Gross Domestic Product to measure the economic
growth of a country.

In an economy, Gross Value Added is an output minus intermediate consumption.

Mahbub-ul-Haq has given the concept of Human Development.

The Human Development Index was rst introduced in the year 1990.
The Human Development Index (HDI) was rst developed by UNDP.

Human Development Report 1997 introduced the concept of Human Poverty Index (HPI), but
Human Development Report replaced it with Multidimensional Poverty Index (MPI) in the year
2010.

25 and 85 years pairs of age is used as the minimum and maximum values of age to determine the life
expectancy at the birth by UNDP.

The rst Indian State to have its Human Development Report prepared and released by Amartya
Kumar Sen in Delhi is Madhya Pradesh.

In 2015, Gender based development index was mentioned in the Human Development Report.

Physical Quality of Life Index (PQLI) is developed by Morris D Morris.

In 1980, the International Union for Conservation of Nature published a world conservation strategy that
included one of the rst references to sustainable development as a global priority and introduced the term
"sustainable development".

World Development Report is published by the World Bank.

3. Economic Planning

In India, economic planning was started in 26th January, 1949.

The planning of India derives its objectives and social premises Directive Principles of State Policy.

Planning in India drew on the new economic programme of Lenin.

M Visvesvaraya authored the book, ‘Planned Economy for India’.

M N Roy drafted the People’s Plan.

In the year 1944, Gandhiwadi Plan was formulated by the Shri Manna Narayan.

M Visvesvaraya was the rst person to present an idea of planning in India.

The Bombay Plan drafted by GD Birla and JRD Tata emphasised on the public sector investments
in infrastructure and heavy industries.

Planning Commission was constituted in 1950.

On 6th August, 1952, National Development Council was constituted.

National Development Council had the nal authority in India to approve Five Year Plan.
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The National Development Council (NDC) is an extra-constitutional body.

The First Five Year Plan (1951-56) was drafted by KN Raj.

The major emphasis of the First Five Year Plan of India was (a) agriculture

The Second Five Year Plan of India was based on the Mahalanobis Model.

The Second Five Year Plan that called for the establishment of socialist pattern of society.

Under Third Five Year Plan, the government introduce an agricultural strategy which gave rise to
Green revolution in India.

This programme in the 4th ve-year plan was a breakthrough and a turning point in the history of
agriculture development in India.
High Yield Varieties Programme (HYVP) was restricted to only ve crops: Bajra, Jawar, Rice, Maize, and
Wheat.

When Morar Ji Desai became the First Janta Prime Minister of India on 24 Mar 1977.
The fth plan was terminated by the Janta Government in 1977-78 and they launched their own sixth plan
for the period 1978-83 and called it the” rolling plan”.

Fifth Plan (1974-79) had a high priority to bring in ation under control and to achieve stability in
the economic situation.

Original approach to Fifth Plan is prepared by C Subramaniam.

Integrated Rural Development programmes was initiated during the Sixth Five Year Plan.

During Sixth Five Year Plan, the National Bank for Agriculture and Rural Development (NABARD)
established to facilitate the rural credit and agricultural development.

Eighth Five Year Plans of Indian economy started the indicative planning.

Eleventh Plan adopted the policy for the universalisation of elementary education in India.

The Third Five Year Plan introduced the concept of import substitution as a strategy for industrialisation.

Dr Manmohan Singh economists proposed the LPG model of economic development in India.

Indian Government has established NITI Aayog on the place of Planning Commission.

Prime Minister ex-o cio head of NITI Aayog.

NITI Aayog is a Nodal Institution for Implementation of Sustainable Development Goals in India.

Atal Innovation Mission is setup under the NITI Aayog.

Arvind Panagariya was the rst Vice-Chairman of the NITI Aayog.

4. Poverty and unemployment

In 1995, UNO adopted a de nition of absolute poverty.

Absolute poverty means poverty in terms of the basic minimum calorie requirements.

Dadabhai Naoroji was the rst Indian to do study on poverty.

2400 is the benchmark of the calorie intake for the rural person.
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In India, poverty is de ned on the basis of calorie intake.

According to Rangarajan Committee, ₹ 32 has to be spent by person in rural area, so that he/she do not
come below the poverty line.

Planning Commission (now, NITI Aayog) xes the poverty line in India.

The following methods has/have been used to estimate poverty in India :-

I. Head Count Ratio
II. Calorie intake
III. Household Consumption Expenditure

I. Tendulkar Committee – To review the methodology for estimation of poverty.

II. Saxena Committee – To review the methodology for conducting BPL census in rural area.
III. Hashim Committee – On methodology for identi cation of BPL families in urban areas.

The twenty-point economic programme was announced for the rst time in India in 1975.

Mid-Day Meal Scheme was started in the year 1996.

Mid-Day Meal Scheme is nanced and managed by Ministry of Human Development.

National Rural Health Mission (NRHM) was launched in the year 2005.

Antyodaya Programme was started rst of all in the state of Rajasthan.

The Mission Indradhanush, an initiative of Government of India, is associated with immunisation.

Food for Work Programme was launched in India during the Tenth Five Year Plan.

For calculating unemployment, 180 minimum determined days are there.

In India disguised unemployment is main characteristic of primary sector.

When the productive capacity of the economic system of a state is inadequate to create su cient

number of jobs, it is called Structural Unemployment.

Structural unemployment arises due to heavy industry bias.

Capitalist Economy is associated with the Karl Marx Theory of unemployment.

Milton Friedman is associated with the NAIRU (Non- Accelerating In ation Rate of

Unemployment) which refers to a level of unemployment below which in ation rises.

Generally unemployment in a developing country takes place because of lack of complementary

factors of production.

With reference to Okun’s Law, At one point increase in the unemployment rate is associated with
two percentage points of negative growth in real GDP.

Formula to know the unemployment rate:-

Total number of unemployed/Total labour force × 100.

In 2010, employment survey was started in India.

Employment survey is conducted by NSSO.

MNREGA is the largest rural employment programme in India.
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The Food for Work Programme was subsumed in MGNREGA.

Mahatma Gandhi National Rural Employment Guarantee Act has been noti ed throughout the
country with e ect from 1st April, 2008.

5. Indian Agriculture.

In 2014-15, the growth rate of agriculture was negative.

The main objective of seed village concept is Involving the farmers for training in quality seed
production and thereby to make available quality seeds to others at appropriate time and afordable cost.

India Green Revolution started from Pantnagar

First Green Revolution was primarily concerned with the production and productivity of wheat.

The rst Green Revolution was con ned to Punjab, Haryana and Western Uttar Pradesh.

Eleventh Five Year Plan has the highest GDP growth rate in agricultural sector in India.

National Seed Policy, 2002 is based on the recommendation of MV Rao Committee.

The main objective of Golden Rays Project is to increase the productivity of maize in tribal districts.

The National Mission for Sustainable Agriculture (NMSA) started in India in 2010.

National Marketing Federation of India Limited (NAFED).

I. NAFED promotes the inter-state trade as well as export of certain agricultural commodities to
many foreign countries.

In India, Commercial banks have the highest share in the disbursement of credit to agriculture and
allied activities.

The Kisan Credit Card Scheme for the farmers started in India in 1998-1999.

Finance Commission assigns the Agricultural Income Tax to states in India.

Kisan Credit Card Scheme facilitates the short-term credits to farmers.

The Commission for Agriculture Costs and Prices determines the Minimum Support Price in India.

The price at which the government purchases foodgrains for maintaining the public distribution
system and for building up bu er stocks are known as Procurement Prices.

In 2006-07, the Soil Health Card Scheme was originally launched by the Government of India.

The Fair and Remunerative Price (FRP) of sugarcane is approved by the Cabinet Committee on
Economic A airs.

In India, the Nutrient Based Subsidy (NBS) policy for fertilisers was implemented in 2010.

Farm Income Insurance Scheme at the beginning covered only rice and wheat crops.

Sugar and sugarcane are essential commodities under the Essential Commodities Act.

The growth rate of the Primary sector of the Indian Economy sector never reach 8% during the
planning history of Indian Economy.

Minimum Wage Act is only applicable to the scheduled employments of the Centre and States.
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Zero Budget Natural Farming- In India, the farming method rst evolved in Karnataka.

National Agricultural Development Fund was established in 1997.

The main agriculture item import from India is edible oil.

In Doha negotiations the issue of WTO export subsidy was raised.

The Central Rice Research Institute located is Cuttack.

The Standard Mark of Bureau of Indian Standards (BIS) is mandatory for automotive tyres and
tubes.

6. Indian Industries and Industrial Policy.

The rst modern industry to develop in India was Iron and Steel Industry.

By the late 19th century, India was one of the largest producers and exporters of cotton yarn and
wheat.

The industries requiring compulsory licensing are: Distillation and brewing of alcoholic drinks.

Cigars and cigarettes of tobacco and manufactured tobacco substitutes. Aerospace and defense
equipment. Coal and lignite.

MMTC Limited is the largest international trading company in India.

Coal sector was nationalised by the Government of India under Indira Gandhi.
Coal India Limited.
It is designated as a ‘Maharatna’ company under the Ministry of Coal.

Sixth Five Year Plan for the rst time did devise the new strategy for industrialisation of backward
regions to reduce regional disparities in industrialisation of the country.

The rst Industrial Policy was released in 1948.

In the Industrial Policy 1977, the cottage industries have been categorised into 3 types.

Industrial Policy, 1991 has abolished (with a few exception) the Industrial Licensing.

Index of Eight Core Industries

The current weightage, of eight core industries is Petroleum Re nery Products (28.04%)>
Electricity (19.85%) > Steel (17.92%) > Coal (10.33%) > Crude Oil (8.98%) > Natural Gas (6.88%)
> Cement (5.37%) > Fertiliser (2.63%).

Index of Industrial Production (IIP) is prepared on the basis of monthly.

Manufacturing of the industrial sector has contributed the highest percentage of weighted in Index of
Industrial Production (IIP).

The Labour Bureau brings out the ‘Consumer Price Index Number for Industrial Workers’.

For small industries, SIDBI institution is source of credit.

The programme ‘Make in India’ started in September, 2014.

As of January 2020, the ‘Make in India’ program was implemented by the Ministry of Commerce and
Industry.
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Startup India Hub operationalised to resolve queries and handhold startups started in 2016.

Disinvestment refers to selling of equity of a Public Sector Undertaking (PSU) to a private

organisation or to general public.

The Companies Act 2013

It provides for Corporate Social Responsibility (CSR).

Abid Hussain Committee recommended the abolition of reservation of items of small scale sector in
industry.

Dutta Committee recommended the establishment of Joint Venture Sector in Indian Industry.

Meera Seth Committee was constituted for nding out the problem in handicraft sector and giving
suggesstion to solve these problems.

V Balkrishna Eradi Committee recommended for the establishment of National Company Law
Tribunal.

In Indian Economy, the employment generated by the private sector is more than that of the
public sector.

Competition Commission of India

The goal is to restrict the monopoly tendencies and increase the competition among public
enterprises.

7. Money and Banking.

M1 is also known as Narrow Money in the Indian economy.

Reserve Bank of India publishes the Narrow Money (M1) and Broad Money (M3) on fortnightly
basis.

M4 - money supplies in the Indian economy consist the total post o ce savings.

The Reserve Bank of India de nes Narrow Money as CU (currency notes + coins) + DD (net
demand deposits held by commercial banks).

Money stock is the total amount of money available in an economy at a speci c time.

The source of the Reserve Money in India are

(a) Net foreign exchange assets of RBI.
(b) Governments currency liabilities to the public.
(c) Net non-monetary liabilities of the deposits commercial banks + total deposits RBI.

(a) Currency component

(b) Deposit component
Are the major component of the money supply in the Indian Economy.

If you withdraw ` 1,00,000 in cash from your Demand Deposit Account at your bank, the immediate e ect
on aggregate money supply in the economy will be to leave it unchanged.

Foreign currency which has a tendency of quick migration is called Hot currency.

Hard currency is the globally traded currency that can serve as a reliable and stable store of value.
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M0 – Reserve Money

Fiat Money
I.It is the money declared by a government to be legal tender.
II. It is the money without intrinsic value.
III. It is the state-issued money which is neither legally convertible to any other thing, nor xed
value in terms of any objective standard.

Near Money
I. Treasury bill
III. Savings accounts and small time deposits.
IV. Retail money market mutual funds.

Legal Tender Money refers to Currency notes.

1 note released in the country and it bears the signature of Finance Secretary.

Demonitisation of ` 500 and ` 1000 currency notes was announced on 8th November, 2016.

Money for public utility is issued by the government through consolidated fund of India through
Finance Minister.

Mysore is India’s modernised currency notes press situated.

The 100 Rupee Currency Note in India is signed by Governor, Reserve Bank of India.

The printing of notes is the total management of Reserve Bank of India.

The price of any currency in international market is decided by the

II. demand for goods/services provided by the country concerned.
III. stability of the government of the concerned country.

In minimum reserve system, RBI had to keep a minimum reserve of gold worth ` 115 crore and
rest in Indian rupees.

M Narsimham Committee was constituted to bring reform in the Indian Banking System.

YH Malegam Committee was constituted by the RBI to study issues and concerns in the micro-
nance sector.

Deepak Mohanty Committee recommendation, RBI introduced base rate system.

Rangarajan Committee has given its recommendation on Financial lnclusion.

Banks of India are required to maintain a certain ratio between their risky assets and capital which
is known as Capital-to-Risk-Weighted Adequacy Ratio (CRAR).

Bank rate means o cial rate of interest charged by Central Bank.

The Cash Reserve Ratio refers to the share of Net Demand and Time Liabilities that banks have to
hold as balances with the RBI.

Statutory Liquidity Requirement is the precious metal (Gold) or other approved securities that a
commercial bank must maintain as reserves other than the cash with RBI.

In India, the Repo Rate is announced by RBI.

Reverse Repo Rate is the rate at which banks park their funds with the Central Bank.

Reserve Bank of India gives short term loans at repo rate to commercial banks.
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RBI xes the Repo Rate and the Reverse Repo Rate in India.

In India, the cash reserve requirement is between 3 to 15% of the total demand and time deposits
of the commercial banks.

In India, the Statutory Liquidity Requirement is not less than 25% of the total demand and time
deposits of the commercial banks.

The primary function of the MPC is to determine the policy interest rate (repo rate) required to
achieve the in ation target set by the Government of India.

The MPC consists of six members – three o cials of the Reserve Bank of India and three external
members nominated by the Government of India. The RBI Governor is the ex-o cio Chairperson
of the MPC. It is not a 12-member body, nor is it reconstituted every year.

Government of India, for the rst time nationalised 14 large commercial banks in the year 1969.
RRBs are owned by
(a) Central Government
(b) State Government
(c) Sponsered Bank

Time deposits is the most important component of the liabilities of commercial bank in India.
RRBs, consider the following statements.
I. Regional Rural Banks (RRBs) are the Scheduled Commercial Bank in Indian Banking System.
II.Regional Rural Banks in India are established in the Fifth Five Year Plan.

I. Central Cooperative Bank is the federation of the primary agricultural Credit Societies in a
speci ed area.
II. State Cooperative Banks form the apex of the Cooperative Credit Structure.

NPCI
It stands for National Payment Corporation of India.
It is the umbrella organisation of payments in India.

The payment and settlement system in India is regulated as per Payment and Settlement Systems
Act, 2007.

NPCI has launched RuPay, a card payment scheme.

NHB has started the RESIDEX in India.

The Hundis in the Indian Banking System is an internal bill of exchange of the Indigenous Banking
System.

8. Financial Market.

The nancial market for securities with maturities of less than one year is known as Money market.

Bond market is a specialised sub market of the money market.

Commercial Papers (CPs) in Indian money market is issued by the companies with a net worth
more than 5 crore.

The market in which loans of money Financial Market can be obtained is called Money market.

Call money markets record the highest daily transaction value amongst all segments of debt
markets.
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Purchase or sale of government securities by the Central Bank from the general public in the bond
market, in a bid to increase or decrease the money supply in the economy is referred to as Open
Market Operations.

Capital market means Share market.

Primary Market in India is mainly dealt with the new issues and debentures.

Capital account surplus of a country means the money is owing into the country.

A scheme for attracting portfolio from Foreign Institutional Investors (Flls) in India was launched in
1992.

Money market deals in securities like treasury bills, commercial papers etc and capital market
deals with securities like shares, debentures etc.

The SEBI was given statutory recognition in 1992 on the recommendation of the Narasimham
Committee.
The Securities and Exchange Board of India (SEBI), was initially constituted on April
12, 1988.
The basic regulatory authority for mutual funds and stock markets lies with the SEBI.
Indian Capital Market.

The Security Exchange Board of India (SEBI) was set up in the Seventh Five Year Plan.
The Capital Issue (Control) Act 1947 was repealed and replaced by the SEBI.

The Mutual Fund Scheme of India was introduced by Unit Trust of India.
Mutual funds can invest in transferable securities in the money and capital markets.

An option which gives the holder, the right to sell a stock at a speci ed price at some time in the
future is called a put option.

Recognised stock exchange means a stock exchange which is for the time being recognised by
Central Government.

The rst development nancial institution of India was IFCI.

Bombay Stock Exchange

(a) It is the oldest exchange of India.
(b) It is known by the name of Dalal Street.
(c) It’s share index is known by the name of SENSEX.

Under FEMA, violation of foreign exchange rules has ceased to be a criminal o ence.

Life Insurance Corporation of India was set up in the Second Five Year Plan.

LIC of India was established in 1956.

IRDA was renamed as IRDAI in the year- 26th December, 2014.

9. Public Finance

In our Constitution, the term ‘Budget’ is used under Article 112.

In India, Budget is prepared by Department of Economic A air.

The rst Budget of the Independent India was presented by RK Shanmukham Chetty.

First outcome budget of India was prepared in the year 2005.

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The concept of Zero Based Budget (ZBB) was given by Peter A Pyhrr.

In USA, zero based budgeting was used for the rst time.

The controlling authority of government expenditure is the Finance Ministry.

The Finance Minister who announced long term scal policy for the country VP Singh.

The major component of budget of the nancial year of the Union Government in India are
(a) Actual gures for the preceding year.
(b) Budget and revised gures for the current year.
(c) Budget estimates for the following year.

Morarji Desai has presented maximum budget.

Government receipts are divided into

(a) Revenue receipts
(b) Capital receipts

E ective Revenue De cit was introduced in the Union Budget of 2012-13.

Interest payment is an item of Revenue expenditure.

Revenue expenditure refers to the expenditure which neither creates assets nor reduce the liability
of the government, whereas capital expenditure refers to the expenditure which either creates an
asset or reduces the liability of the government.

Fiscal De cit is Revenue Receipts + Capital Receipts (only recoveries of loans and other
receipts) - Total Expenditure.

If interest payments is taken out of scal de cit, then remaining amount will be primary de cit.

Ad hoc Treasury Bill System of meeting budget de cit in India was abolished on 31st March, 1997.

Fiscal Responsibility and Budget Management Act (FRBM) concerns

(a) Fiscal de cit
(b) Revenue de cit

Elimination of primary de cit by the end of the scal year 2008-09.

In India taxes can be levied by

(a) Central government
(b) State government
(c) Local bodies

The principal source of revenue for the government is tax

The di erence between GDP at market prices and GDP at factor cost is Indirect Taxes.

Taxes raised are credited into (a) Consolidated Fund

Kelkar Committee recommended abolition of tax rebates under Section 88.

Arbind Modi is the Convener of the ‘Task Force’ set up in November, 2017 by the Government of India to
review the Income-Tax Act and draft a new Direct Tax Law.

Progressive tax structure is Tax rate increases as income increases.

Madras in India imposed the General Sales Tax for the rst time.
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Service tax in India was introduced in the year 1994-95.

Service tax was introduced in India on the recommendation of Raja J Challiah Committee.

The ‘Goods and Services Tax’ was proposed by a task force, whose President was Vijay Kelkar.

The uniform GST rate that has been xed up for lottery prizes by the GST Council is 28%.

The provision of Goods and Service Tax (GST) has been included into 101st Constitutional
Amendment Act, 2016.

GST was to be implemented on concurrent base and Article 246 was inadequate for such a case.
Indirect taxes are generally regressive in character.

Stamp duties is levied by Union and collected and appropriated by States.

Excise tax on liquor is levied by State Government.

Consumer Price Index is now used by the Reserve Bank of India (RBI) to measure the rate of
in ation in India.

The basis of determining Dearness Allowance (DA) to Government employees in India is

Consumer Price Index.

The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price
Index (WPI).

Finance Minister is the Chairman of Financial Stability and Development Council.

Ministry of Finance publishes the Economic Survey of India.

The Public Financial Management System (PFMS) is a web-based online software application
designed, developed, owned and implemented by the Controller General of Accounts.

As per the Constitution of India, it is mandatory for a state to take the Central Government’s
consent for raising any loan if the former owes any outstanding liabilities to the latter.

10. Balance of Payment and Foreign Investment.

TRIPS agreement pertains to intellectual property protection.

United States has the highest export-import ratio of the international trade of India in the last ve
years.

China has the highest share in the World Export among the Asian countries.

Pearls, precious stones, metals, coins , etc items has the highest share of India in the World Exports.

Diamonds export items of India has the highest share in the world in the last ve years.

South Asian Free Trade Area (SAFTA) 2006.

The SAFTA is a trade liberalisation.

MFN (Most Favoured Nation) is one of the cornerstones of World Trade Organisation Trade Law.

Uruguay Session is the nal session of the General Agreement on Tari and Trade (GATT).

Tri n’s Dilemma state that holding dollars was more valuable than gold because constant US
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Balance of Payments de cits helped to keep the system liquid and fuel economic growth.

Exchange rates are determined in the foreign exchange market.

Foreign-currency assets, gold holdings of the RBI and SDRs are included in India’s Foreign
Exchange Reserves.

Special Economic Zone (SEZ) concept was rst introduced in China.

Asia’s rst Export Processing Zone was set-up in Kandla, India in 1965.

Participatory Note is issued by registered Foreign Institutional Investors to overseas investors who
want to be part of the Indian stock market without registering themselves directly.

Service sector in India attracted the highest FDI equity in ow.

Mauritius is the largest source of the Foreign Direct Investment in the Indian Economy.
UNCTAD publish the report of ‘World Investment Report’.

The term ‘Paper Gold’ means Special Drawing Rights (SDRs) of the IMF.

Inauguration of the SWIFT system of electronic inter-bank fund transfers worldwide 1985.

South Africa was the last to join the BRICS grouping.

BIMSTEC has seven members Bangladesh, Bhutan, India Myanmar, Sri Lanka and Thailand.

11. International Financial Institutions

United Nations Monetary and Financial Conference wherein the agreements were signed to set up
IBRD, GATT and IMF, commonly known Bretton Woods Conference.

The WTO was founded in 1995 as the successor organisation to the GATT.

WTO o cially commenced on 1st January, 1995.

SDR are allocated to member nations in proportion of their shareholding in IMF.

TRIMS apply to investment measures related to trade in goods only and not services.

IMF was established in 27th December, 1945.

The value of Special Drawing Right (SDR) is determined by the basket of 5 currencies.

‘Gold Tranche’ (Reserve Tranche) refers to a credit system granted by IMF to its members.

IMF tried to control uncontrolled uctuation of foreign exchange.

IMF and International Bank for Reconstruction and Development (IBRD) are called Bretton Woods
Twins.

Long-term nancial assistance for development purpose is provided by World Bank.

International Bank for Reconstruction and Development is also called as World Bank.

World Bank’s headquarter is located at Washington DC.

Maastricht Treaty prepared the EU for enlargement.

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European Union.
I. The European Union was known earlier as the European Community.
II. The Single European Act (1986) and the Maastricht Treaty were milestones in its formation.
III. Citizens of European Union countries enjoy dual citizenship.
In 1966, Asian Development Bank was established.

The headquarters of the ADB is Manila.

The main aim of the ADB is to accelerate the social and economic development of the Asia and
Paci c Region.

ASEAN was established in 1967.

New Development Bank established in China by BRICS countries.

The headquarters of New Development Bank is at Shanghai.

AIIB established in 2015.

The full form of AIIB is Asian Infrastructure Investment Bank.
Beijing is the headquarters of AIIB.

G20 was established in 1999.

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