Question

1) hike in global oil prices can widen the current account deficit (CAD)of india
2) higher CAD can lead to depriciation of the currency
which among the above statements is correct ?

1) only 1
2) only 2
3)both 1 & 2
4)neither 1 & 2

Answer 1

Answer:

only2

Explanation:

probably is ans_____

Answer 2

Hike in global oil prices can widen the current account deficit (CAD)of india  and Higher CAD can lead to depriciation of the currency both are correct.

Explanation:

The current account deficit (CAD) is a measure of the economy of a nation in which the value of the goods and services that it imports exceeds the value of the items it exports.

• The high crude oil prices would impact the current currency situation. The current account deficit is negatively affected by rising crude oil prices. That, in effect, is having an impact on the currency.
• When the demand for the dollar exceeds the supply, it appreciates against the rupee and vice versa. The current account deficit (CAD), or the gap between import prices over exports, is spurring higher dollar demand to pay for imports.