Foreign Exchange Crisis

Q. After independence, India faced many social and economic problems like poverty, illiteracy, and unemployment. How did Indian leaders try to solve these problems? Choose the appropriate option.

1. India borrowed loans from international organisations like the World Bank.
2. India continued to be a closed economy and avoided integration with other countries.
3. India launched Five-Year Plans beginning from 1951 where policies were implemented to achieve particular goals within each period.
4. The Indian government gave entire control of market to the private players and decided to focus on social welfare.

Q. Which of the following statements are true with regard to the 1991 foreign currency crisis of India?

1. India faced an external aggression during the financial crisis of 1991.
2. India's foreign currency reserves deteriorated.
3. There was a rise in international price of oil.
4. A series of five-year plans had failed before 1991.

Q. How did India respond to the situation when its balance between imports and exports deteriorated beyond expectation and it did not have sufficient foreign currency reserves to pay for imports?

1. India borrowed loans from foreign countries.
2. India restricted imports from other countries.
3. India imposed heavy taxes on imports.
4. India adopted the New Economic Policy.

Q. Which of the following was a major economic problem that India faced in 1991?

1. High unemployment rate
2. High illiteracy rate
3. Foreign currency crisis
4. Low life expectancy rates