In 1991 the foreign exchange resources available were just sufficient ...
Foreign exchange resources refer to the amount of currency, such as US dollars or euros, that a country has available to use for international trade and transactions. These resources are crucial for a country to finance its imports, which are goods and services purchased from other countries.
In 1991, the foreign exchange resources available were just sufficient to finance imports for three weeks. This means that the country had enough currency to pay for its imports for a period of three weeks before running out of foreign exchange reserves.
The correct answer is option 'B' - Three weeks.
Explanation:
1. Definition of foreign exchange resources:
- Foreign exchange resources refer to the amount of currency a country has available for international trade and transactions.
- These resources are usually held by the central bank of a country and consist of foreign currency reserves, such as US dollars, euros, or yen.
2. Importance of foreign exchange resources for imports:
- Foreign exchange resources are essential for a country to finance its imports.
- When a country imports goods and services from other countries, it needs to pay for them in the currency of the exporting country.
- Without sufficient foreign exchange resources, a country would not be able to pay for its imports, leading to a trade deficit and potentially harming its economy.
3. Calculation of sufficient resources for import financing:
- The question states that the available foreign exchange resources were just sufficient to finance imports for three weeks.
- This means that the country had enough currency to pay for its imports for a period of three weeks.
- After three weeks, the country would have run out of foreign exchange reserves and would need to find alternative ways to finance its imports.
4. Other options and their explanations:
- Option 'A' - Two weeks: This option suggests that the foreign exchange resources were sufficient for only two weeks of imports, which is incorrect.
- Option 'C' - Three months: This option suggests that the foreign exchange resources were sufficient for three months of imports, which is incorrect.
- Option 'D' - Three days: This option suggests that the foreign exchange resources were sufficient for only three days of imports, which is incorrect.
In conclusion, in 1991, the foreign exchange resources available were just sufficient to finance imports for three weeks. This means that the country had enough currency to pay for its imports for a period of three weeks before running out of foreign exchange reserves.