UPSC Prelims 2011 · GS Paper I
Question 6: Economy and Social Development
In terms of economy, the visit by foreign nationals to witness the XIX Common Wealth Games in India amounted to
AnswerThe answer is (a).
An export is a sale of goods or services to people abroad that earns foreign exchange. Foreign nationals who come to India and spend on tickets, hotels, transport and food are buying Indian services, and their spending is counted as foreign-exchange earnings, exactly as an export would be. Tourism is therefore treated as an export of services, an invisible item in the current account. An import would be the reverse, such as Indians spending abroad.
Why each option is right or wrong
- (a) Right: visitors' spending in India earns foreign exchange, like an export of services.
- (b) An import would be Indians buying goods or services from abroad.
- (c) Production means making goods and services, not selling to foreigners.
- (d) Consumption describes the use of goods; the cross-border sale is what makes this an export.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2011, General Studies Paper I, Series A. The paper on upsc.gov.in.