MCQs - 2026-08

A significant increase in exports positively impacts the current account balance by increasing foreign exchange inflows, potentially reducing the current account deficit.

A surge in exports is typically driven by robust global demand, favorable trade policies, and competitive pricing, often linked to positive global economic conditions.

Historically, engineering goods, petroleum products (refined), and textiles are major contributors to India's merchandise export basket and often drive significant surges.

Concerns regarding the valuation of illiquid assets held by AIFs and potential conflicts of interest for fund managers are common areas addressed by regulatory enhancements.

Stricter regulations often involve reassessing minimum investment thresholds to ensure that only suitable investors participate in AIFs, thereby enhancing investor protection.

The proposed stricter regulations aim to strengthen investor protection, particularly for sophisticated investors, and ensure greater transparency and accountability within the AIF industry.

The RBI guidelines emphasize that all lending activities must be performed by the Regulated Entity (RE) or through outsourcing arrangements where the RE retains full control and oversight, prohibiting outright outsourcing of credit risk.

The guidelines stipulate that Regulated Entities (REs) are responsible for conducting due diligence on Digital Lending Apps (DLAs) and ensuring their compliance with regulatory norms.

The RBI's guidelines aim to enhance transparency, fairness, and consumer protection in the digital lending ecosystem, addressing concerns about predatory lending practices.

By fostering deeper ties between ASEAN and the EU, the agreement helps diversify trade dependencies and strengthens global economic stability.