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With respect to “Net international investment position (NIIP)”, consider the following statements:
It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets.
A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
With respect to “Net international investment position (NIIP)”, consi...
A net international investment position (NIIP) measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. It can be viewed as a nation’s balance sheet with the rest of the world at a specific point in time. NIIP is an important barometer of a nation’s financial condition and creditworthiness. A nation with a positive NIIP is a creditor nation, while a nation with a negative NIIP is a debtor nation.
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With respect to “Net international investment position (NIIP)”, consi...
Net International Investment Position (NIIP)
- NIIP is the difference between a nation's stock of foreign assets and a foreigner's stock of that nation's assets.
- It is a measure of a country's external financial strength and vulnerability.
- NIIP takes into account a country's foreign assets such as foreign direct investment, portfolio investments, and reserve assets, as well as its foreign liabilities such as foreign loans and portfolio investments in the country.
- NIIP can be either positive or negative.
Positive and Negative NIIP
- A country with a positive NIIP means that it owns more foreign assets than what foreigners own in its assets. This means that the country is a net creditor to the rest of the world.
- On the other hand, a country with a negative NIIP means that it owes more to foreigners in terms of foreign assets than what it owns in their assets. This means that the country is a net debtor to the rest of the world.
Correct Statement
- The first statement is correct as it defines what NIIP is and how it is calculated.
- The second statement is not correct as it provides the opposite of the correct definition. A nation with a positive NIIP is a creditor nation, while a nation with a negative NIIP is a debtor nation.
- NIIP is the difference between a nation's stock of foreign assets and a foreigner's stock of that nation's assets.
- It is a measure of a country's external financial strength and vulnerability.
- NIIP takes into account a country's foreign assets such as foreign direct investment, portfolio investments, and reserve assets, as well as its foreign liabilities such as foreign loans and portfolio investments in the country.
- NIIP can be either positive or negative.
Positive and Negative NIIP
- A country with a positive NIIP means that it owns more foreign assets than what foreigners own in its assets. This means that the country is a net creditor to the rest of the world.
- On the other hand, a country with a negative NIIP means that it owes more to foreigners in terms of foreign assets than what it owns in their assets. This means that the country is a net debtor to the rest of the world.
Correct Statement
- The first statement is correct as it defines what NIIP is and how it is calculated.
- The second statement is not correct as it provides the opposite of the correct definition. A nation with a positive NIIP is a creditor nation, while a nation with a negative NIIP is a debtor nation.
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With respect to “Net international investment position (NIIP)”, consider the following statements: It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation. Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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With respect to “Net international investment position (NIIP)”, consider the following statements: It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation. Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With respect to “Net international investment position (NIIP)”, consider the following statements: It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation. Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With respect to “Net international investment position (NIIP)”, consider the following statements: It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation. Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?.
With respect to “Net international investment position (NIIP)”, consider the following statements: It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation. Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With respect to “Net international investment position (NIIP)”, consider the following statements: It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation. Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With respect to “Net international investment position (NIIP)”, consider the following statements: It measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation with a positive NIIP is a debtor nation, while a nation with a negative NIIP is a creditor nation. Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?.
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