@upsc2020 Could you tell the answer to this question?
C is correct.
Balance of payments summarizes an economy’s transactions with the rest of the world for a specified time period. To correct deficit in BoP, a country will have to take steps which would:
a. attract more foreign investment
b. increase exports and decrease unnecessary imports
Reducing import duty would lead to increase in imports and hence would lead to more deficit in BoP.
Second is correct as restrictive monetary policy(lower money supply) would lead to fall in prices of goods in country which would make exports competitive in international market.
Appreciation of increase in value of domestic currency would make exports less competitive.
pls explain stmt 3 again......how Appreciation of domestic currency will help.
what i think if rupee value appreciate India will export more so reduction in bop will occur.
