Subtopic

External Sector & Capital Flows

Under theme: Indian Economy

52 PYQs. Learn elimination tricks first, then attempt the questions below.

Questions52

Active years13

Tricks15

Timed practice

Attempt all External Sector & Capital Flows PYQs as one test

Every PYQ in this subtopic — exam mode with autosave, negative marking, and explanations after you submit.

52questions
104minutes
−33%per wrong

Practice

Elimination tricks

15 from PYQs

Common distractors and how to eliminate wrong options in this subtopic.

1
An agreement's entry into force often requires a specific number of ratifications, which can occur years afte…
1
Associate specific report names with their publishing international organizations.

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1
Avoid dismissing statements about 'observer' status without specific knowledge, as it is a common practice fo…
1
Avoid relying on outdated information; focus on the 'last five years' trend as specified.
1
Be aware of the significant increase in India's foreign exchange reserves post-1991 as a key indicator of imp…
1
Be aware of the specific conditions, like the 10% equity threshold, that can reclassify FPI as FDI.
1
Be aware of the top few countries involved in the global trade of major agricultural commodities.
1
Be cautious of absolute terms like 'consistently increased'; real-world economic data often shows fluctuation…
1
Be cautious of plausible but incorrect geopolitical claims, such as military base rumors, which UPSC often us…
1
Be cautious with statements about specific commodity import/export trends (like iron and steel, chemicals) un…
1
Be cautious with superlative claims (e.g., 'most productive') unless specific data or strong evidence is know…
1
Be wary of absolute terms like 'All' or 'Most'; they are frequently incorrect in UPSC statements.
1
Be wary of absolute terms like 'all' or 'only' in statements; they often indicate incorrectness.
1
Carefully differentiate between debt-creating and non-debt creating capital flows based on repayment obligati…
1
Clearly differentiate between NEER (nominal value) and REER (real value adjusted for inflation).

PYQs in this subtopic

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2018

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2020

2021

2022

2023

2024

2025

UPSC Prelims 2013 easy Economy Open full page

Which one of the following groups of items are included in India’s foreign-exchange reserves?

Explanation

India's foreign-exchange reserves include: 1. Foreign currency assets (FCAs): This is the largest component, consisting of deposits and holdings in major currencies like US Dollars, Euros, and Yen. 2. Gold reserves: India holds a significant amount of gold bullion as part of its foreign exchange reserves. 3. Special drawing rights (SDRs): These are international reserve assets created by the International Monetary Fund (IMF) that supplement official foreign reserves. 4. Reserve position in the IMF: This refers to India's quota or shareholding position in the IMF, which can be a source of additional foreign currency if needed.

UPSC Prelims 2013 easy Economy Open full page

The balance of payments of a country is a systematic record of

Explanation

Statement A is correct: The balance of payment records the transaction in goods, services, and assets between residents (and not governments) of one country with the rest of the world. Statement B is incorrect: This describes only the Balance of Trade, not the full BoP. Statement C is incorrect: BoP covers all residents (individuals, firms, institutions), not just governments. Statement D is incorrect: Capital account is only one component of BoP; it also includes current account and errors & omissions.

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