Conquer UPSC
EconomyExternal Sector and International EconomicsFDI, FPI and External Commercial FinanceMedium (editorial estimate)
Question details
Type:
Statement based
Skill:
Fact recall
Tags:
external finance and monetary tightening · FDI, FPI and External Commercial Finance
Related topics:
Exchange Rates and Currency Management

Classification and difficulty are editorial labels. Explanations are awaiting review.

Question 61 (Dropped 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
Show reference answer

Reference answer — not an official UPSC answer

The reference key lists B. 2 and 3 only as its answer.

This is the coaching source’s published answer, not a correctness judgment by Conquer UPSC.

Original UPSC paper (Series A, Q61)

← Back to 2022 questions