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Question No. 317Interactive Test Mode
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Q317. Global capital flows to developing countries increased significantly during the nineties. In view of the East Asian financial crisis and Latin American experience, which type of inflow is good for the host country?

Global capital flows to developing countries increased significantly during the nineties. In view of the East Asian financial crisis and Latin American experience, which type of inflow is good for the host country?

Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

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Official UPSC Answer KeyUPSC Prelims 2002 • Indian Economy

Correct Answer: Option (B) — Foreign Direct Investment

Concept & Option Breakdown

Standard Reference Verified

Foreign Direct Investment (FDI) represents long-term, stable capital investment tied to physical assets, infrastructure, and technology transfer. Unlike volatile short-term portfolio investments (hot money) or commercial borrowings, FDI cannot easily flee during economic turbulence, making it the safest and most beneficial capital flow for a host country.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2002 (Q317)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → External Sector & Trade
Official Answer KeyOption (B) — Foreign Direct Investment

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Frequently Asked Questions — UPSC Prelims 2002 Q317

What is the official answer for UPSC Prelims 2002 GS Paper I Question 317 (Indian Economy)?

The official UPSC answer key for this 2002 Indian Economy (External Sector & Trade) question is Option (B): "Foreign Direct Investment". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2002 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "External Sector & Trade". You can explore all repeated questions from External Sector & Trade in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this External Sector & Trade UPSC Prelims question using option elimination?

To solve External Sector & Trade questions in UPSC Prelims, identify extreme modifiers, verify core NCERT conceptual definitions, and eliminate mutually contradictory statement pairs before locking your final option.

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