Question

India traditionally runs a large Merchandise Trade Deficit (Goods). What is the key component that typically counteracts this to keep the Current Account Deficit (CA

  • D low?
A Surplus in the Services Trade Balance and Remittance Inflows.
B High foreign direct investment (FDI) inflows.
C Increase in short-term foreign portfolio investment (FPI).
D Large-scale borrowing from international financial institutions (IFIs).
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