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  1. Home
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International Relations·Easy

Which of the following will reduce the burden of Structural Trade Deficit in India’s Balance of Payment Account? 1. A decline in international crude oil prices. 2. India’s import of lithium from Bolivia. 3. India importing onion to ease the prices in the domestic market. Select the correct answer using the code given below:

Which of the following will reduce the burden of Structural Trade Deficit in India’s Balance of Payment Account?

1. A decline in international crude oil prices.

2. India’s import of lithium from Bolivia.

3. India importing onion to ease the prices in the domestic market.

Select the correct answer using the code given below:

Options

  1. a.

    1 only

    Correct answer
  2. b.

    1 and 2 only

  3. c.

    1 and 3 only

  4. d.

    1, 2 and 3

Explanation

• Structural Trade Deficit refers to insufficient foreign currency earnings from exports to meet the foreign currency requirement to pay for critical imports.

• A decline in crude oil prices implies India spends fewer dollars to meet the energy requirements from oil and, thus, is said to reduce the burden of trade deficit.

• India’s import of lithium and onion will lead to India spending dollars, which leads to deficit.

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