Economics · External Sector
Consider the following statements: Statement I: A lower share of short-term external debt relative to total reserves reduces India's vulnerability to rollover risks in times of global financial shocks. Statement II: A high current account deficit (CAD) enhances India's foreign exchange reserve accumulation, thus improving external sector resilience. Statement III: India's Net International Investment Position (NIIP), when negative, implies that India is a net lender to the rest of the world. Which one of the following is correct in respect of the above statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Both Statement II and Statement III are correct, and both of them explain Statement I.
- 2Both Statement II and Statement III are correct, but only one of them explains Statement I.
- 3Only one of the Statements II and III is correct, and that explains Statement I.
- 4Neither Statement II nor Statement III is correct.✓
Correct answer
Neither Statement II nor Statement III is correct.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice External Sector MCQs →Want more practice questions on External Sector?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · External Sector