UPSC Civil Services Prelims 2022
Question 12 of 57Indian Economy
Consider the following statements: 1. Tight monetary policy of the US Federal Reserve could lead to capital flight. 2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). 3. Devaluation of domestic currency decreases the currency risk associated with ECBs. Which of the statements given above are correct?
A1 and 2 only
B2 and 3 only
C1 and 3 only
D1, 2 and 3
Correct Answer
The correct answer is hidden
Explanation
29 words hidden ... can weaken the domestic currency and raise the effective servicing burden on firms with External Commercial ... 28 words hidden