What are the components of india's current account deficit?

india's current account deficit

Level - ADVANCE

The value of the Indian rupee in terms of the US dollar depends on the demand and supply of dollars in the economy. Watch this video to understand the factors that affect dollar demand and supply, and how an imbalance led to the sharp rupee depreciation in July 2013.

AUTHOR(S): Deepa Vasudevan

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India's current account deficit

 The value of the Indian rupee in terms of the US dollar depends on the demand and supply of dollars in the economy. Watch this video to understand the factors that affect dollar demand and supply, and how an imbalance led to the sharp rupee depreciation in July 2013.

1 2 3

    1.When imports are more than exports, on the trade account there is



  • Excess dollar demand
  • Excess dollar supply
  • Shortage of rupees
  • 2.If foreign investors sell their investments and take it out of the country the exchange rate depreciates due to



  • Reduction in dollar demand
  • Reduction in dollar supply
  • Increase in dollar supply
  • 3.When the rupee depreciates against the dollar it means that



  • More rupees are needed to buy the same amount of dollars
  • More dollars are needed to buy the same amount of rupees
  • Less rupees are available for each dollar sold
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