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EDITORIALS & ARTICLES
Feb 1st, 2022 - Daily Quiz
1. Consider the following statements regarding the recent Economic survey of India.
- It shows that the service sector was the worst hit sector by the COVID-19 pandemic.
- The private consumption has not yet recovered fully form the pandemic till Financial year 2021.
- India's balance of payment remained negative in the last two years.
- The balance of payments of a country is the difference between all money flowing into the country in a particular period of time and the outflow of money to the rest of the world.
- Current account deficit refers to the net outflow of money in terms of exports and imports of both goods and services and transfer payments.
- Trade deficit is the situation when a country's imports exceeds exports.
- Despite all the disruptions caused by the global pandemic, India’s balance of payments remained in surplus throughout the last two years.
- Reserve Bank of India accumulated foreign exchange reserves, which is equivalent to 13.2 months of imports and higher than the country’s external debt.
- deregulation of certain sectors
- simplification of processes
- removal of legacy issues like ‘retrospective tax’
- production-linked incentives
- privatization
- The BOP of a country reveals its financial and economic status.
- A BOP statement can be used as an indicator to determine whether the country’s currency value is appreciating or depreciating.
- The BOP statement helps the Government to decide on fiscal and trade policies.
- It provides important information to analyze and understand the economic dealings of a country with other countries.
- It monitors the transaction of all the imports and exports of services and goods for a given period
- It helps the government analyse a particular industry export growth potential and formulate policy to sustain it
- It gives the government a comprehensive perspective on a different range of import and export tariffs. The government then increases and decreases the tax to discourage import and encourage export, individually, and be self-sufficient
- Purchase of goods and services by foreigners
- Foreign Direct Investment (FDI) into our country
- Inflow by the NRIs settled in foreign countries
- Speculative purchase of home currency by foreigners