UPSC Economics Business and Foreign Trade / व्यापार और विदेश व्यापार Question Bank Foreign Trade and Investment in India

  • question_answer
          Many a times we read in the newspapers that when Foreign Capital is allowed to enter the country freely, it can affect the economy adversely. Which among the following is a correct reason for the above assumption?

    A) It affects the balance of payments of the country by adversely affecting the Current Account

    B) It poses risks to the value of the country's currency as well as management of local liquidity

    C) The foreign capital earns profit in the country which is repatriated

    D) The Balance of Trade of the country is badly affected by Foreign Capital Inflows

    Correct Answer: B


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