External Sector

Indian Economy (CDS)

Title

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Indian Economy - Understanding the basics of Indian economic system

Depreciation of Rupee with respect to dollar will impact India through:

1. Making exports from India more competitive.

2. Increasing the value of remittances earned by an Indian family sent from their migrant daughter in USA.

3. Encouraging foreign investment in the Indian economy.

4. Increasing the foreign debt service charges for the government.

Select the correct answer using the codes given below:

1 only

1 and 2 only

1, 2 and 3 only

1, 2, 3 and 4

- Statement 1: Depreciation makes Indian exports cheaper and more competitive globally.

- Statement 2: Remittances from the USA will have higher value in India in INR terms.

- Statement 3: Depreciation can attract foreign investors due to potential for higher returns.

- Statement 4: It increases the cost of servicing foreign debt as more INR is required to pay the same USD amount.

Correct Option: Option 4: 1, 2, 3 and 4