UPSC Prelims PYQ 2015: International liquidity problem relates to non-availability of

The problem of international liquidity is related to the non-availability of

1. goods and services
2. gold and silver
3. dollars and other hard currencies
4. exportable surplus

Explanation

Option (c) is correct

• The problem of international liquidity is associated with the problem of international payments.
• It refers to the difficulty countries face in obtaining the necessary foreign exchange (like dollars and other hard currencies) to finance imports, settle debts, or stabilize their currencies in the global economy.
• International liquidity is essential for maintaining smooth trade and financial transactions across borders.

Answer: (c) dollars and other hard currencies; Difficulty Level: Easy