A country could use its reserves of foreign exchange in order to balance any deficit in its balance of payments. The reserve bank _________ foreign exchange when there is a deficit. This is called __________. Option 1: Sells, official reserve sale Option 2: Buy, BOP Deficit Option 3: Borrow, transfer payments Option 4: Buy, net factor income from abroad

The answer is 'Sells, official reserve sale'. View full solution:

CUET Economics - A country could use its reserves of foreign exchange in order to balance any deficit in its balance of payments. The reserve bank _________ foreign exchange when there is a deficit. This is called __________. | PYQs + Solutions

CUET Economics 2026 15th May Shift 1

Macro

Easy

Sells, official reserve sale

Buy, BOP Deficit

Borrow, transfer payments

Buy, net factor income from abroad

✅ Correct Option: 1

Related questions:

21 May Shift 1

Under the fixed exchange rate regime, if the government of a country finds its currency to be overvalued and therefore deliberately reduces the value of its current against the foreign currency, it will be called as?

2 June Shift 1

Match List-I with List-II

List-I	List-II
(A) Exchange Rate	(I) Supply of foreign exchange = Demand of foreign currency.
(B) Gold standard system of exchange rate	(II) Domestic currency loses its value in relation to a foreign currency.
(C) Par rate of exchange	(III) External value of the domestic currency.
(D) Currency Depreciation	(IV) An old variant of fixed exchange rate.

Choose the correct answer from the options given below:

1 June Shift 1

The transactions which are determined by the gap in the balance of payments, whether a deficit or surplus is called :

CUET Economics 2026 15th May Shift 1 PYQs

Keyboard Shortcuts