{"id":32119,"date":"2024-03-05T05:17:20","date_gmt":"2024-03-05T05:17:20","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=32119"},"modified":"2024-03-05T05:17:22","modified_gmt":"2024-03-05T05:17:22","slug":"upsc-prelims-2019-question-65","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-prelims-2019-question-65\/","title":{"rendered":"UPSC Prelims 2019 &#8211; Question 65"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-prelims-test-series?utm_source=Blog&amp;utm_medium=Blog&amp;utm_campaign=Blog-%20PTS\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/02\/Prelims-Test-Series-eng-and-hindi-1280\u00d7330.svg\" alt=\"UPSC Prelims Mock Test - ECONOMY 2\" class=\"wp-image-24924\" width=\"779\" height=\"199\"\/><\/a><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-6a735243bce18\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a735243bce18\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2019-question-65\/#Q65_In_the_context_of_India_which_of_the_following_factors_isare_contributorcontributors_to_reducing_the_risk_of_a_currency_crisis\" >Q65. In the context of India, which of the following factors is\/are contributor\/contributors to reducing the risk of a currency crisis?<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q65_In_the_context_of_India_which_of_the_following_factors_isare_contributorcontributors_to_reducing_the_risk_of_a_currency_crisis\"><\/span>Q65. In the context of India, which of the following factors is\/are contributor\/contributors to reducing the risk of a currency crisis?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\"><li>The foreign currency earnings of India\u2019s IT sector.<\/li><li>Increasing the government expenditure.<\/li><li>Remittances from Indians abroad.<\/li><\/ol>\n\n\n\n<p>Select the correct answer using the code given below:<br>(a) 1 only<br>(b) 1 and 3 only<br>(c) 2 only<br>(d) 1, 2 and 3<\/p>\n\n\n\n<p>Answer: B<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Statement 1 is correct: <\/strong>Foreign currency earnings of India\u2019s IT sector will lead to an increase in the supply of foreign currencies, and this further increases the forex reserves. Therefore, more supply and less demand for foreign currency relative to the Indian rupee helps in reducing the risk of currency crisis.<\/li><li><strong>Statement 2 is not correct:<\/strong> Increasing Government expenditure will have no effect on the value of currency. Currency crisis can be reduced by manipulating the demand and supply of currency in the foreign exchange market.<\/li><li><strong>Statement 3 is correct: R<\/strong>emittance is the sum of money (in foreign currency), sent from abroad or overseas to the home country. Remittance is the major source of cash inflow into any country. With the inflow of foreign currency, forex reserves again increased which further reduced currency crisis. India is the largest remittance-receiving country in the world<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/free-resources-for-upsc?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Resources\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" width=\"1280\" height=\"300\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18.png\" alt=\"\" class=\"wp-image-42398 lazyload\" data-srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18-585x137.png 585w\" data-sizes=\"(max-width: 1280px) 100vw, 1280px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1280px; --smush-placeholder-aspect-ratio: 1280\/300;\" \/><\/a><\/figure>\n\n\n\n<p>For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p>For Daily Updates and Study Material:<\/p>\n\n\n\n<p>Join our Telegram Channel \u2013&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1. 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In the context of India, which of the following factors is\/are contributor\/contributors to reducing the risk of a currency crisis?<\/p>\n<p>The foreign currency <\/p>\n","protected":false},"author":17,"featured_media":32123,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[1644],"tags":[232,515,231],"class_list":["post-32119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-upsc-prelims","tag-upsc","tag-upsc-cse","tag-upsc-prelims"],"aioseo_notices":[],"aioseo_head":"\n\t\t<!-- All in One SEO 4.9.9 - aioseo.com -->\n\t<meta name=\"description\" content=\"Q65. 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