{"id":91778,"date":"2025-06-01T11:05:29","date_gmt":"2025-06-01T11:05:29","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=91778"},"modified":"2025-06-01T11:05:29","modified_gmt":"2025-06-01T11:05:29","slug":"if-another-global-financial-crisis-happens-in-the-near-future-which-o","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/","title":{"rendered":"If another global financial crisis happens in the near future, which o"},"content":{"rendered":"<p>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 ?<\/p>\n<ul>\n<li>1. Not depending on short-term foreign borrowings<\/li>\n<li>2. Opening up to more foreign banks<\/li>\n<li>3. Maintaining full capital account convertibility<\/li>\n<\/ul>\n<p>Select the correct answer using the code given below :<\/p>\n<p>[amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;1 and 2 only&#8221; option3=&#8221;3 only&#8221; option4=&#8221;1, 2 and 3&#8243; correct=&#8221;option1&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2020<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2020.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2020\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nStatement 1 is correct: Short-term foreign borrowings are highly volatile and can be withdrawn rapidly during a global financial crisis. An economy that depends less on such borrowings is less vulnerable to sudden capital flight, which can trigger liquidity problems and currency depreciation.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\nReducing reliance on volatile short-term foreign debt enhances an economy&#8217;s resilience against external financial shocks.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nStatement 2 is incorrect: While opening up to foreign banks can bring benefits like increased competition and technology, it can also introduce risks of contagion from their home countries during a global crisis. Their presence does not necessarily provide immunity; it can potentially increase exposure. Statement 3 is incorrect: Maintaining full capital account convertibility allows unrestricted movement of capital in and out of the country. While beneficial in normal times, it makes the economy highly susceptible to massive capital outflows (sudden stops) during a global financial crisis, significantly increasing vulnerability rather than providing immunity.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>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 : &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"If another global financial crisis happens in the near future, which o\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/#more-91778\">Detailed Solution<span class=\"screen-reader-text\">If another global financial crisis happens in the near future, which o<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1288,1226],"class_list":["post-91778","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1288","tag-external-sector-of-economy","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>If another global financial crisis happens in the near future, which o<\/title>\n<meta name=\"description\" content=\"Statement 1 is correct: Short-term foreign borrowings are highly volatile and can be withdrawn rapidly during a global financial crisis. An economy that depends less on such borrowings is less vulnerable to sudden capital flight, which can trigger liquidity problems and currency depreciation. Reducing reliance on volatile short-term foreign debt enhances an economy&#039;s resilience against external financial shocks.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"If another global financial crisis happens in the near future, which o\" \/>\n<meta property=\"og:description\" content=\"Statement 1 is correct: Short-term foreign borrowings are highly volatile and can be withdrawn rapidly during a global financial crisis. An economy that depends less on such borrowings is less vulnerable to sudden capital flight, which can trigger liquidity problems and currency depreciation. 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An economy that depends less on such borrowings is less vulnerable to sudden capital flight, which can trigger liquidity problems and currency depreciation. Reducing reliance on volatile short-term foreign debt enhances an economy's resilience against external financial shocks.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/","og_locale":"en_US","og_type":"article","og_title":"If another global financial crisis happens in the near future, which o","og_description":"Statement 1 is correct: Short-term foreign borrowings are highly volatile and can be withdrawn rapidly during a global financial crisis. An economy that depends less on such borrowings is less vulnerable to sudden capital flight, which can trigger liquidity problems and currency depreciation. Reducing reliance on volatile short-term foreign debt enhances an economy's resilience against external financial shocks.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:05:29+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/","url":"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/","name":"If another global financial crisis happens in the near future, which o","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:05:29+00:00","dateModified":"2025-06-01T11:05:29+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Statement 1 is correct: Short-term foreign borrowings are highly volatile and can be withdrawn rapidly during a global financial crisis. An economy that depends less on such borrowings is less vulnerable to sudden capital flight, which can trigger liquidity problems and currency depreciation. Reducing reliance on volatile short-term foreign debt enhances an economy's resilience against external financial shocks.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/if-another-global-financial-crisis-happens-in-the-near-future-which-o\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"If another global financial crisis happens in the near future, which o"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=91778"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91778\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=91778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=91778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=91778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}