Question 61
1. Tight monetary policy of US Federal Reserve could lead to capital flight.
2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs).
3. Devaluation of domestic currency decreases the currency risk associated with ECBs.
Which of the statements given above are correct?
AOptions
BSolution
This question was officially dropped by the UPSC. Therefore, no solution or detailed analysis is provided for it. When a question is dropped, it means it is not considered for evaluation in the final scoring.
CStrategy
If a question is dropped by the examining body, it means there was likely an issue with the question itself (e.g., ambiguity, no correct option, factual error). In such cases, there is no need to attempt to solve it. For aspirants, recognizing such questions during the exam and not spending excessive time on them is a valuable strategy, although this determination is usually made post-exam by the examination body.
DSyllabus Analysis
As the question was dropped, its specific syllabus alignment becomes irrelevant for analysis purposes. However, it would broadly fall under 'Indian Economy' and 'International Relations/Economics'.
EQuestion Analysis
Invalid. The question was dropped, indicating a potential issue with its framing or options.