Capital Account Convertibility of the Indian Rupee implies

With reference to the Indian economy, consider the following statements : 1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee. 2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness. 3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER. Which of the above statements are correct ?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct ? 1. They can sell their own goods in addition to offering their platforms as market-places. 2. The degree to which they can own big sellers on their platforms is limited. Select the correct answer using the code given below :

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

Consider the following statements : 1. Tight monetary policy of US Federal Reserve could lead to capital flight. 2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). 3. Devaluation of domestic currency decreases the currency risk associated with ECBs. Which of the statements given above are correct ?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

No answer is recorded for this question: cancelled by UPSC — marks awarded to all candidates

Consider the following : 1. Foreign currency convertible bonds 2. Foreign institutional investment with certain conditions 3. Global depository receipts 4. Non-resident external deposits Which of the above can be included in Foreign Direct Investments?

1. (a)1, 2 and 3
2. (b)3 only
3. (c)2 and 4
4. (d)1 and 4

Consider the following statements : The effect of devaluation of a currency is that it necessarily 1. improves the competitiveness of the domestic exports in the foreign markets 2. increases the foreign value of domestic currency 3. improves the trade balance Which of the above statements is/are correct?

1. (a)1 only
2. (b)1 and 2
3. (c)3 only
4. (d)2 and 3

If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India ? 1. Not depending on short-term foreign borrowings 2. Opening up to more foreign banks 3. Maintaining full capital account convertibility Select the correct answer using the code given below :

1. (a)1 only
2. (b)1 and 2 only
3. (c)3 only
4. (d)1, 2 and 3