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2020 · Q51Indian EconomyExternal Sector & Balance Of Paymentseasy

With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic ?

  1. (a)It is the investment through capital instruments essentially in a listed company.
  2. (b)It is a largely non-debt creating capital flow.
  3. (c)It is the investment which involves debt-servicing.
  4. (d)It is the investment made by foreign institutional investors in the Government securities.
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Official answer(b) It is a largely non-debt creating capital flow.

2022 · Q2Indian EconomyExternal Sector & Balance Of Paymentsmoderate

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
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Official answer(c) 1 and 3 only

2022 · Q6Indian EconomyExternal Sector & Balance Of Paymentsmoderate

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
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Official answer(d) Neither 1 nor 2

2022 · Q61Indian EconomyExternal Sector & Balance Of PaymentsmoderateCancelled by UPSC

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

2020 · Q49Indian EconomyExternal Sector & Balance Of Paymentsmoderate

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
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Official answer(a) 1 only