If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India ? 1. Not depending on short-term foreign borrowings 2. Opening up to more foreign banks 3. Maintaining fu

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Submitted by examrobotsa on

Q: (IAS/2020)
If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India ?
1. Not depending on short-term foreign borrowings
2. Opening up to more foreign banks
3. Maintaining full capital account convertibility

Select the correct answer using the code given below :

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,161,83,161,32,24,27

keywords: 

{'global financial crisis': [0, 0, 0, 1], 'foreign borrowings': [0, 0, 0, 1], 'more foreign banks': [0, 0, 0, 1], 'full capital account convertibility': [0, 0, 0, 1], 'immunity': [0, 0, 2, 4], 'india': [8, 1, 7, 13], 'policies': [1, 1, 1, 7]}

The correct answer is a.

If another global financial crisis were to happen, depending on short-term foreign borrowings would make India more vulnerable to external shocks. Opening up to more foreign banks and maintaining full capital account convertibility may increase capital inflows, but it would also increase the risk of capital outflows during times of crisis. Therefore, avoiding short-term foreign borrowings would be the most likely action/policy to give some immunity to India.