If another global financial crisis happens in the near future, which of the following actions/policies are mos

Question

If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India?
1. Not depending on the short-term foreign borrowings
2. Opening up to more foreign banks
3. Maintaining full capital account convertibility
Select the correct answer using the code given below:

Accepted Answer

Reducing reliance on short-term foreign debt significantly lowers vulnerability to sudden capital outflows during a global crisis, as seen in past financial meltdowns. In contrast, opening up to more foreign banks or achieving full capital account convertibility can increase exposure to volatile international capital flows, potentially exacerbating a crisis rather than providing immunity.