External Sector of India: UPSC Previous Year Questions (Indian Economy)
1 previous year UPSC Prelims question on External Sector of India (Indian Economy). Choose an option to see the answer and explanation.
Explanations state facts as of the year each question was asked; words like “recently” refer to that year.
Showing 1–1 of 1 question
UPSC 2006Indian Economy · External Sector of India
Q1. Assertion (A): Balance of Payments represents a better Picture of a country’s economic transactions with the rest of the world than the Balance of Trade. Reason (R): Balance of Payments takes into account the exchange of both visible and invisible items where-as balance of Trade does not. Codes:
Explanation
Assertion A is true: Since Balance of Payments (BoP) includes trade in goods, services, investments, and financial transfers, it offers a more accurate reflection of a country’s international economic engagement than just Balance of Trade (BoT), which only captures the net export-import balance. Reason R is true: The Balance of Payments (BoP) provides a comprehensive account of a country’s international economic transactions, including both visible (goods) and invisible (services, remittances, investments) trade. In contrast, the Balance of Trade (BoT) only considers the difference between exports and imports of goods, making it a less complete measure of a nation’s financial standing. Thus, both A and R are true, and R correctly explains A.
Answer key for these questions
Q
UPSC year
Correct answer
1
2006
(a) Both ‘A’ and ‘R’, are individually true and ‘R’ is the correct explanation of ‘A’.
Frequently asked questions
How many previous year UPSC questions are there on External Sector of India?
This page covers 1 previous year UPSC Prelims GS Paper-I questions on External Sector of India (Indian Economy), asked from 1996 to 2025. Each has the correct answer and an explanation.
How should I use previous year UPSC questions for Prelims?
Attempt each question first, then open the answer and read the explanation for every option. Repeat by chapter, and track which statements UPSC reuses across years. Previous year questions show the exam pattern and difficulty level.
Which years are covered for External Sector of India?
Questions on External Sector of India (Indian Economy) are available for 22 years, from 1996 to 2025. Use the Year filter to practise a single paper.
