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Which statement best explains Foreign exchange reserves?

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Question ID #26434 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC Indian Economy Sectional Test 2026 Medium

Correct Answer: A. External reserve assets held by the central bank
Foreign exchange reserves: External reserve assets held by the central bank

Question: Which statement best explains Foreign exchange reserves?

A. External reserve assets held by the central bank

B. Tax collected through transactions where burden may be shifted to another person

C. GDP measured at current prices

D. Fiscal deficit minus interest payments

Correct Answer: A. External reserve assets held by the central bankForeign exchange reserves: External reserve assets held by the central bank

Which statement best explains Foreign exchange reserves? - MCQ Explanation

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Correct answer: A. External reserve assets held by the central bank