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Question

Which of the following best describes the term ‘import cover', sometimes seen in the news?
(a) It is the ratio of value of imports to the Gross Domestic Product of a country
(b) It is the total value of imports of a country in a year
(c) It is the ratio between the value of exports and that of imports between two countries
(d) It is the number of months of imports that could be paid for by a country's international reserves

Answer:

D

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Explanation:

Import cover refers to the number of months a country can sustain its level of imports using its international reserves. It is a measure of a country's ability to finance its imports in the event of an economic crisis or a decline in foreign exchange reserves. A higher import cover indicates a greater capacity to meet import obligations and is generally considered favorable for economic stability.

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