Disequilibrium in the balance of payments leads to:

none of these

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both (a) and (b)

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decrease in official reserves with RBI

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increase in official reserves with RBI

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Solution

The correct option is B
both (a) and (b)

Disequilibrium in the BoP can cause an increase or a decrease in the official reserves, depending on whether there is a deficit or a surplus.

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Similar questions

What is meant by 'official reserve transactions'? Discuss their importance in the Balance of Payments.

List-I	List-II
(a) Current Account	(i) Official Capital
(b) Capital Account	(ii) Reserves from foreign countries
(c) Unilateral Payments	(iii) Reparations
(d) Official Statement Account	(iv) Visible and invisible exports and imports

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