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Question No. 256Interactive Test Mode
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Q256. 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.

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.

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 2019 • Indian Economy

Correct Answer: Option (B) — 1 and 3 only

Concept & Option Breakdown

Standard Reference Verified
  • 1 and 3 are correct: IT service export earnings and inward remittances bring foreign exchange into India, bolstering foreign exchange reserves and providing a cushion against currency depreciation/crises.
  • 2 is incorrect: Increasing government expenditure can expand the fiscal and twin deficits, raise inflation, and potentially undermine macroeconomic stability, thereby increasing (rather than reducing) currency risk.
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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2019 (Q256)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Indian Economic Planning & Growth
Official Answer KeyOption (B) — 1 and 3 only

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Frequently Asked Questions — UPSC Prelims 2019 Q256

What is the official answer for UPSC Prelims 2019 GS Paper I Question 256 (Indian Economy)?

The official UPSC answer key for this 2019 Indian Economy (Indian Economic Planning & Growth) question is Option (B): "1 and 3 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2019 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Indian Economic Planning & Growth". You can explore all repeated questions from Indian Economic Planning & Growth 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 Indian Economic Planning & Growth UPSC Prelims question using option elimination?

To solve Indian Economic Planning & Growth 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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