Question:
Identify, which of the following is not a source of demand for foreign exchange for the Indian economy? (Choose the correct alternative.)
Identify, which of the following is not a source of demand for foreign exchange for the Indian economy? (Choose the correct alternative.)
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Understand the distinction between foreign exchange inflows (supply) and outflows (demand) in the balance of payments.
Updated On: Feb 5, 2025
- Import of goods and services
- Remittances by foreigners living in India to their families abroad
- Indian tourists visiting foreign countries
- Loans from Rest of the World (ROW)
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The Correct Option is D
Solution and Explanation
Loans from ROW represent inflows of foreign exchange, not a source of demand. The other options involve outflows of foreign exchange, which constitute demand for it.
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