Match the items of List – I with List – II with regard to Balance of Payments equilibrium : List – I…
Matching the Balance of Payments (BoP) adjustment policies with their examples: (a) Exchange control involves (i) requiring exporters to surrender foreign exchange earnings…
Choose your answer
Match the items of List – I with List – II with regard to Balance of Payments equilibrium :
List – I
List – II a. Exchange control i. Exporters surrender foreign exchange to the central bank. b. Trade Policy Measure ii. Bank rate raised by the central bank c. Expenditure reducing policy iii. Reduction in foreign exchange rate d. Expenditure switching policy iv. Enhancing exports by granting subsidies
Answer and explanation
Correct answer A
Matching the Balance of Payments (BoP) adjustment policies with their examples: (a) Exchange control involves (i) requiring exporters to surrender foreign exchange earnings to the central bank; (b) Trade Policy Measure includes (iv) enhancing exports by granting export subsidies; (c) Expenditure-reducing policy includes contractionary monetary measures such as (ii) raising the Bank Rate; and (d) Expenditure-switching policy includes (iii) devaluation / reduction in the foreign exchange rate to switch demand toward domestic goods.
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UGC NET Commerce