Economics · External Sector Indicators
Statement I: A fall in a country's Import Cover Ratio (ICR) can heighten its exposure to external economic shocks. Statement II: A declining ICR indicates a reduced capacity of foreign exchange reserves to finance imports. Which one of the following is correct with respect to the above statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statement I is incorrect, but Statement II is correct
- 2Statement I is correct, but Statement II is incorr ect
- 3Both statements are correct, but Statement II does not explain Statement I
- 4Both statements are correct, and Statement II explains Statement I✓
Correct answer
Both statements are correct, and Statement II explains Statement I
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