Which of the following is a common cause of 'cost-push' inflation?
A Excessive consumer demand.
B Increase in government expenditure.
C Rise in input costs like raw materials or wages.
D Reduction in direct taxes.
Answer: C
Cost-push inflation occurs when the overall prices of goods and services rise due to an increase in the cost of production. This can be caused by factors such as higher wages, increased prices of raw materials, or supply chain disruptions.
62.
When inflationary pressures persist, which of the following is the primary monetary policy tool the Reserve Bank of India (RBI) typically uses to curb inflation?
A Reducing the Cash Reserve Ratio (CRR).
B Increasing government spending.
C Increasing the Repo Rate.
D Decreasing the Statutory Liquidity Ratio (SLR).
Answer: C
To curb inflation, the Reserve Bank of India (RBI) typically increases the Repo Rate. An increase in the Repo Rate makes borrowing more expensive for commercial banks, which in turn leads to higher lending rates for consumers and businesses, thereby reducing money supply and demand in the economy.
63.
In India, which index is primarily used to measure retail inflation and is a key factor for the Reserve Bank of India (RBI) in formulating its monetary policy?
A Wholesale Price Index (WPI).
B Producer Price Index (PPI).
C Consumer Price Index (CPI).
D Services Price Index (SPI).
Answer: C
The Consumer Price Index (CPI) is the primary measure of retail inflation in India. The Reserve Bank of India (RBI) uses CPI-Combined as its key indicator for inflation targeting and monetary policy decisions.
64.
A significant boost in the manufacturing sector, driven by government incentives, is expected to have which of the following positive impacts on the Indian economy?
A Decrease in GDP growth and increase in unemployment.
B Increase in imports and reduction in exports.
C Higher GDP growth, increased employment, and enhanced export competitiveness.
D Shift of workforce from manufacturing to agriculture.
Answer: C
A thriving manufacturing sector, supported by incentives, typically leads to higher Gross Domestic Product (GDP) growth, creation of numerous employment opportunities, and improved export competitiveness, contributing to overall economic development.
65.
The Production Linked Incentive (PLI) scheme, a flagship government initiative, currently covers how many key sectors to promote domestic manufacturing?
A 5 sectors.
B 10 sectors.
C 14 sectors.
D 20 sectors.
Answer: C
As of the latest updates, the Production Linked Incentive (PLI) scheme has been extended to 14 key sectors in India, including automobiles, electronics, pharmaceuticals, textiles, and food products, to boost domestic manufacturing and exports.
66.
What is the primary objective behind the Indian government's initiatives, such as the Production Linked Incentive (PLI) schemes, to boost the manufacturing sector?
A To increase reliance on imported goods.
B To promote only small-scale industries.
C To enhance domestic manufacturing capabilities, create jobs, and make India a global manufacturing hub.
D To discourage foreign direct investment in manufacturing.
Answer: C
The primary objective of government incentives like the PLI schemes is to boost domestic manufacturing, reduce import dependence, create employment opportunities, and integrate India into global supply chains, thereby making the country a competitive manufacturing hub.
67.
According to RBI's digital lending guidelines, who is responsible for paying any fees or charges to the Lending Service Provider (LSP)?
A The borrower directly.
B The Regulated Entity (RE).
C The borrower and RE equally.
D The government.
Answer: B
The guidelines explicitly state that any fees, charges, etc., payable to LSPs must be paid by the Regulated Entity (RE) and not by the borrower directly. This ensures transparency and prevents LSPs from levying hidden charges on borrowers.
68.
Which document is mandated by RBI for digital lending platforms to provide to borrowers before loan execution, detailing all costs and terms?
A Terms and Conditions Agreement.
B Key Fact Statement (KFS).
C Loan Sanction Letter.
D Privacy Policy Document.
Answer: B
The RBI guidelines make it mandatory for Regulated Entities (REs) to provide a Key Fact Statement (KFS) to the borrower before the execution of the loan contract. This statement must contain all material information, including the Annual Percentage Rate (APR), loan tenure, charges, and recovery mechanism, in a standardized format.
69.
As per RBI's guidelines for digital lending platforms, how must the loan disbursement and repayment be handled?
A Directly between the Regulated Entity (RE) and the borrower's bank account.
B Through the Lending Service Provider (LSP) to the borrower's bank account.
C Cash disbursement by the LSP.
D Through a third-party payment gateway without RE involvement.
Answer: A
The RBI guidelines mandate that all loan disbursements and repayments must be executed directly between the Regulated Entity (RE) and the borrower's bank account, without any pass-through or pooling of funds by the Lending Service Provider (LSP).
70.
Which of the following is a major criticism regarding global climate finance pledges?
A Lack of transparency and slow disbursement
B Too much focus on private sector investment
C Over-reliance on renewable energy
D Excessive funding for developed nations
Answer: A
Developing nations frequently criticize the lack of transparency and the slow pace at which pledged climate funds are actually disbursed.
