Defence Economics Questions and Answers

Answer: D

The keyed answer is that defence expenditure is an indispensable necessity. One basic principle of defence economics is that, since a state must be able to protect itself, defence spending is a necessary cost and not a waste, and the question is how much is needed. The option calling all defence expenditure wasteful is the opposite, and the options on perpetual peace and proportion to requirements are also arguable, but the key takes the fourth as the principle.

Answer: A

Economic warfare implies weakening the enemy by economic means, such as embargoes, sanctions, blockade, control of trade and financial measures, to reduce its capacity to fight or to pressure it into changing its policy. The attack on the enemy's resources, a complete blockade and the checking of supply lines are specific measures or parts of that wider aim, so the keyed answer is the first option. Examples are sanctions, trade embargoes and the freezing of assets.

Answer: C

SAPTA, the SAARC Preferential Trading Arrangement, is a preferential trade agreement among the SAARC countries. It was signed in 1993 and came into force in 1995, and it was the first step toward the South Asian Free Trade Area (SAFTA), which succeeded it. It is not a peace plan for Cambodia, a partition plan for Yugoslav republics or a human rights organisation. SAPTA came into force in December 1995, and SAFTA was signed in 2004.

Answer: B

An increase in military spending is not part of the IMF's austerity package. The conditions for IMF loans usually require the government to cut spending, privatise public holdings and raise interest rates to control inflation and the budget deficit, and the critics call this austerity. A rise in military spending is the reverse of the spending cuts that austerity is meant to bring about.

Answer: D

The mobilisation of resources mainly implicates a country's security syndrome of defence and development: the resources of the country must be divided between the needs of defence and those of economic development, so mobilising them affects both. Information technology, budgeting and weapon technology are each only one aspect, and the keyed answer is the option that names the two competing claims on resources. The tension between guns and butter is a central issue of defence economics.

Answer: C

The teeth-to-tail ratio compares the men in the fighting forces (the teeth) with the men in everything else that keeps them fighting (the tail): supply, transport, repair, medical and administrative staff. It is therefore a ratio between men in fighting forces and men in other than fighting forces.

The other options mix up the terms. A ratio of men to materials or of arsenals to men is not what the phrase measures, because the tail is counted in personnel, not in stores. A ratio of front-line men to reserves also leaves out the support services, which are the whole point of the tail. A larger tail means that more people are needed behind the line for every soldier who actually fights.

Answer: A

A logistical supply chain in the sense the key adopts runs from raw materials to finished material in the battle field area. The idea is that logistics is a chain that starts with the source of the goods, goes through production and storage, and ends only when the finished material reaches the fighting area.

The remaining options each describe only one link of that chain. Supply from industrial production sites to depots is the early stage, supply from depots to the battle field is the last stage, and supply from one military unit to another is a transfer inside the force. None of these covers the whole chain from raw material to the front, so the first option is the fuller definition and the one the key accepts.

Answer: C

Defence is the example of unproductive expenditure of the government in the classical sense used in the question. Spending on defence protects the country but does not directly add to the output of goods and services or to the productive capacity of the economy.

Education and health build human capital, and transport builds infrastructure, so these are treated as productive or developmental expenditure because they raise future output. That contrast is why the keyed answer is defence. This is a conventional classification and not a judgement that defence spending is not needed.

Answer: B

Threat perception is an external determinant of a defence budget. A state decides how much to spend on defence largely by judging the dangers it faces from outside, such as the strength and hostility of neighbours, and these come from the external environment.

National interest, commitment to a constitutional ideology and technological competence are matters arising within the country, namely its aims, its values and its own capacity, so they are internal determinants. The only option that comes from outside the state is threat perception, which is the keyed answer.

Answer: D

Foreign investment with little denial is the item that is not needed for a strong military industrial base in India. The measures named are to identify private firms and open a dialogue, to select pilot projects likely to succeed, and to overcome infrastructure gaps with investment in research and development.

The fourth option implies opening the sector to foreign capital without restriction, which is not among the needs set out and runs against the aim of building indigenous capacity. The first three are practical steps, so the key marks the fourth.