A
1 only
B
1 and 2 only
C
3 only
D
1, 2 and 3
Correct answer: (a) 1 only
Explanation
- A
1 only
1 only. Avoiding short-term foreign debt is the crisis buffer. More foreign banks and full capital-account convertibility add vulnerability.
- B
1 and 2 only
1 and 2 only. Opening the bank door wider is not immunity.
- C
3 only
3 only. Full CAC is the opposite of a shield (1997 / 2013 lessons).
- D
1, 2 and 3
All three. 2 and 3 fail.
Summary. Official key is (a) 1 only. Immunity to a sudden stop comes from not leaning on short-term foreign borrowing. More foreign banks and full capital-account convertibility do not give that shield.
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
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2026 · Q78 · General Studies · 2 marks
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