Security Market in India: UPSC Previous Year Questions (Indian Economy)
1 previous year UPSC Prelims question on Security Market in 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.
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UPSC 2002Indian Economy · Security Market in India
Q1. Global capital flows to developing countries increased significantly during the nineties. In view of the East Asian financial crisis and Latin American experience, which type of inflow is good for the host country?
Explanation
The East Asian Financial Crisis (1997) demonstrated the risks of excessive reliance on short-term portfolio investments, which led to currency instability and market crashes. FDI, on the other hand, is less volatile and contributes to sustainable growth.
Option (b) is correct: Among the various forms of capital in-flows, Foreign Direct Investment (FDI) is considered the most stable and beneficial for a host country’s economy. Unlike Foreign Portfolio Investment (FPI) and External Commercial Borrowings (ECB), which can lead to financial volatility, FDI brings in:
Long-term capital investments in infrastructure, manufacturing, and services. Technology transfer and skill enhancement. Employment generation and economic stability.
Answer key for these questions
Q
UPSC year
Correct answer
1
2002
(b) Foreign Direct Investment
Frequently asked questions
How many previous year UPSC questions are there on Security Market in India?
This page covers 1 previous year UPSC Prelims GS Paper-I questions on Security Market in India (Indian Economy), asked from 2000 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 Security Market in India?
Questions on Security Market in India (Indian Economy) are available for 15 years, from 2000 to 2025. Use the Year filter to practise a single paper.
