2016 GS Paper I, all questions
UPSC Prelims 2016 · GS Paper I
Question 18: Economy and Social Development
Which of the following best describes the term ‘import cover’, sometimes seen in the news?
aIt is the ratio of value of imports to the Gross Domestic Product of a country
bIt is the total value of imports of a country in a year
cIt is the ratio between the value of exports and that of imports between two countries
dIt is the number of months of imports that could be paid for by a country’s international reserves
AnswerUPSC’s answer is (d).
Import cover is the number of months of imports that a country's foreign exchange reserves can pay for. A higher figure means a bigger cushion against balance-of-payments stress. The other options describe the import-to-GDP ratio, the total value of imports and the ratio of exports to imports between two countries, none of which is import cover.
Why each option is right or wrong
- (a) That is the import-to-GDP ratio, not import cover.
- (b) That is simply the annual import bill.
- (c) That is a bilateral export-import ratio.
- (d) Right: import cover is months of imports payable from reserves.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2016, General Studies Paper I, Series A. The paper on upsc.gov.in.