UPSC 2011 › Indian Economy › External Sector & Balance Of Payments

3 questions · 2011 · answers as per the UPSC key

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UPSC 2011 · Q6 · Indian Economy › External Sector & Balance Of Payments · Save

In terms of economy, the visit by foreign nationals to witness the XIX Commonwealth Games in India amounted to

(a) Export
(b) Import
(c) Production
(d) Consumption
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Answer: (a) Export
UPSC 2011 · Q10 · Indian Economy › External Sector & Balance Of Payments · Save

Consider the following actions which the Government can take:

  1. Devaluing the domestic currency.
  2. Reduction in the export subsidy.
  3. Adopting suitable policies which attract greater FDI and more funds from FIIs.

Which of the above actions can help in reducing the current account deficit?

(a) 1 and 2
(b) 2 and 3
(c) 3 only
(d) 1 and 3
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Answer: (d) 1 and 3
UPSC 2011 · Q28 · Indian Economy › External Sector & Balance Of Payments · Save

Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country.

Which one of the following statements best represents an important difference between the two?

(a) FII helps bring better management skills and technology, while FDI only brings in capital
(b) FII helps in increasing capital availability in general, while FDI only targets specific sectors
(c) FDI flows only into the secondary market, while FII targets primary market
(d) FII is considered to be more stable than FDI
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Answer: (b) FII helps in increasing capital availability in general, while FDI only targets specific sectors