Read the following statements - Assertion (A) and Reason (R):
Assertion (A): In 1991, India was left with 2 weeks of foreign exchange reserves to finance its imports .
Reason(R): India was an closed economy and also had deflation during 1990's.
From the given alternatives choose the correct one:
Answer & explanation
Correct answer: option 3
India was a closed economy before 1991 economic reforms.
Inflation was at an alarming rate during the period of crisis.
In 1991 ,foreign exchange reserves declined to a level that was not adequate to finance imports for more than two weeks.