Q. ‘Peace clause’ is often seen in the news. Which of the following statements describes it correctly?

It refers to circumstances under which the government can increase the fiscal deficit.

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It is a mechanism that protects a developing country's food procurement programs against action from World trade organization (WTO) members in case subsidy ceilings are breached.

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It is a mechanism under which the International Monetary Fund (IMF) provides loans to countries that have been destroyed by wars or disasters.

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None of the above.

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Solution

The correct option is B It is a mechanism that protects a developing country's food procurement programs against action from World trade organization (WTO) members in case subsidy ceilings are breached.
Explanation:

A peace clause is a mechanism that protects a developing country's food procurement programs against action from World trade organization (WTO) members in case subsidy ceilings are breached.

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