📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

  • google app store apple app store
  • ✖

      Question

      When India’s Capital Account Surplus exceeds Current

      Account Deficit, then:
      A Forex reserve will increase Correct Answer Incorrect Answer
      B Forex reserve will decrease Correct Answer Incorrect Answer
      C No effect of forex reserve Correct Answer Incorrect Answer
      D May increase or decrease Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      When the Capital Account has surplus that exceeds the deficit of Current Account, then there is a net surplus in Balance of Payment. In other words, there is net inflow of foreign currencies. This will increase the forex reserve of RBI. 

      Practice Next
      ask-question