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Question No. 163Interactive Test Mode
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Q163. Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of the Indian rupee?

Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of the Indian rupee?

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

Official Answer Key & Detailed Solution

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2019 • Indian Economy

Correct Answer: Option (D) — Following an expansionary monetary policy

Concept & Option Breakdown

Standard Reference Verified

Following an expansionary monetary policy lowers domestic interest rates, leading to capital outflows seeking higher returns abroad. It also increases domestic money supply and aggregate demand, which can spur inflation and increase imports, worsening the currency depreciation.

Conversely, curbing non-essential imports reduces foreign exchange outflows, Masala Bonds shift currency risk to foreign investors, and easing ECB norms increases capital inflows—all of which support the value of the rupee.

Elimination Heuristic & Exam Approach

Expansionary monetary policy increases money supply and lowers interest rates, inducing capital flight and further weakening the currency.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2019 (Q163)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Banking & Financial System
Official Answer KeyOption (D) — Following an expansionary monetary policy

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Frequently Asked Questions — UPSC Prelims 2019 Q163

What is the official answer for UPSC Prelims 2019 GS Paper I Question 163 (Indian Economy)?

The official UPSC answer key for this 2019 Indian Economy (Banking & Financial System) question is Option (D): "Following an expansionary monetary policy". 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 "Banking & Financial System". You can explore all repeated questions from Banking & Financial System 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 Banking & Financial System UPSC Prelims question using option elimination?

Expansionary monetary policy increases money supply and lowers interest rates, inducing capital flight and further weakening the currency.

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