Economics · Balance of Payments
A developing economy like India experiences a current account deficit but strong capital inflows through FDI and FPI. The exchange rate remains stable. Which of the following statements are correct? 1. Balance of Payments may still be in equilibrium. 2. Capital inflows can appreciate the domestic currency. 3. Current account deficit implies net import of goods and services. 4. FDI inflows increase the debt burden.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2 and 3✓
- 22 and 4 only
- 31 and 3 only
- 41, 2, 3 and 4
Correct answer
1, 2 and 3
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