Do you think that the Currency Exchange Rate is a suitable measure for comparing countries’ relative economic performance? What are the possible reasons for widening trade deficit in India despite improvement in macro-economic fundamentals? (200 W) - Civilsdaily

Do you think that the Currency Exchange Rate is a suitable measure for comparing countries’ relative economic performance? What are the possible reasons for widening trade deficit in India despite improvement in macro-economic fundamentals? (200 W)

Mentor’s Comment: The question has two parts. In first part we need to establish the relationship between exchange rate and economic performance of countries and take a stand whether it is a suitable measure or not. Though, there is no direct linkage between them, but over a short term exchange rate can mislead economic situation. … Continue reading Do you think that the Currency Exchange Rate is a suitable measure for comparing countries’ relative economic performance? What are the possible reasons for widening trade deficit in India despite improvement in macro-economic fundamentals? (200 W)