Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

If India finds a substitute for oil then it can result in which of the following options?

Options:

There would be a deficit in BoP account

There would be a surplus in BoP account

It will not effect the BoP account

None of the above

Correct Answer:

There would be a surplus in BoP account

Explanation:

India's maximum imports are done for oil, if India is able to find a substitute for oil, its imports will reduce thus causing a positive shift in the balance of payment position. Due wo which surplus BoP may take place.