In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis?
1. The foreign currency earnings of India’s IT sector
2. Increasing the government expenditure
3. Remittances from Indians abroad
Select the correct answer using the code given below.
Answer:
(b)
Easy
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Core Books/NCERT
Currency crisis risk is reduced by increase in foreign exchange inflow in the current account of BoP. In this question 1 and 3 are inflows in the current account and hence reduce the risk, whereas 2 are not related to currency risk directly. Thus, more correct answer is 1 and 3 only.