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MCQs - 2026-03

1231.
What does the term 'bolstering economic stability' imply in the context of foreign exchange reserves?
A Making the economy more vulnerable
B Strengthening the economy against shocks
C Increasing inflation
D Reducing investment
1232.
The RBI's active intervention in the foreign exchange market is primarily aimed at:
A Increasing currency volatility
B Managing currency volatility
C Reducing foreign investment
D Limiting remittances
1233.
What is a crucial function of foreign exchange reserves for international trade?
A Hindering international trade
B Supporting international trade
C Increasing trade deficits
D Reducing trade volumes
1234.
Who continues to monitor the global economic landscape for optimal management of reserves?
A Only the Ministry of Finance
B Only the Reserve Bank of India
C The government and the RBI
D International Monetary Fund (IMF)
1235.
What does a healthy foreign exchange reserve level signify about India's economic management?
A Poor macroeconomic management
B Resilience in the face of global economic uncertainties
C Increased vulnerability to external shocks
D Dependence on foreign aid
1236.
The sustained inflow of foreign capital reflects:
A Declining investor confidence
B Growing investor confidence in India's economic prospects
C Increased economic uncertainty
D Reduced policy environment
1237.
A strong foreign exchange reserve position provides the RBI with flexibility to:
A Increase currency volatility
B Manage monetary policy and intervene in the market
C Reduce international trade
D Limit investor confidence
1238.
What is a primary role of foreign exchange reserves?
A Increasing currency volatility
B Providing a cushion against external economic shocks
C Reducing international trade
D Limiting investor confidence
1239.
Which of the following is NOT mentioned as a factor contributing to the accumulation of foreign exchange reserves?
A Strong foreign direct investment (FDI) inflows
B Healthy remittances from overseas Indians
C Decreased exports
D RBI's intervention in the foreign exchange market
1240.
What significant milestone has India's foreign exchange reserves reached by the end of FY 2025-26?
A All-time low
B All-time high
C Stagnant levels
D Significant decline