In response to rising inflationary pressures indicated by the CPI in 2026, what is a common monetary policy tool the RBI might consider using?
A Reducing the repo rate.
B Increasing the reverse repo rate or the policy repo rate.
C Reducing the Cash Reserve Ratio (CRR).
D Increasing government spending.
Answer: B
To curb inflation, the RBI typically tightens monetary policy. This can involve increasing the policy repo rate (the rate at which banks borrow from RBI) or the reverse repo rate (the rate at which banks lend to RBI), which makes borrowing more expensive and reduces the money supply, thereby cooling down demand and inflationary pressures.
44.
When the RBI monitors an uptick in the CPI in 2026, it is primarily concerned about its impact on which of the following?
A Economic growth and price stability.
B Stock market performance.
C Foreign exchange reserves.
D Government debt levels.
Answer: A
The RBI's mandate includes maintaining price stability while keeping in mind the objective of growth. A persistent rise in CPI (inflation) can erode purchasing power, distort investment decisions, and destabilize the economy, thus impacting both price stability and potentially hindering sustainable economic growth.
45.
In early 2026, the Reserve Bank of India (RBI) has been closely monitoring an uptick in the Consumer Price Index (CPI). What does a rising CPI generally indicate?
A A decrease in the general price level of goods and services.
B A general increase in the price level of goods and services, leading to a fall in the purchasing power of money.
C An increase in industrial production.
D A decrease in unemployment rates.
Answer: B
The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. A rising CPI signifies inflation, meaning that the general price level is increasing, and the purchasing power of money is decreasing.
46.
The objective of the PLI schemes, driving India's manufacturing growth in 2026, is to make domestic manufacturing more competitive globally. What is a key mechanism through which these schemes achieve this?
A By imposing higher import duties on finished goods.
B By providing financial incentives to companies based on incremental sales of manufactured goods.
C By restricting foreign direct investment in manufacturing.
D By reducing the quality standards for domestic products.
Answer: B
The PLI schemes provide incentives to companies for incremental sales of their manufactured goods, encouraging them to increase production, improve efficiency, and invest in R&D. This directly links incentives to performance, making Indian manufacturing more competitive on a global scale.
47.
Which of the following sectors has NOT been a major beneficiary of the PLI schemes contributing to India's manufacturing growth in 2026?
A Automobiles and Auto Components.
B Pharmaceuticals.
C Textiles.
D Traditional Handicrafts.
Answer: D
While PLI schemes have significantly boosted sectors like automobiles, pharmaceuticals, electronics, and textiles, traditional handicrafts, though important for employment and culture, have not been a primary focus of the large-scale, production-linked incentives aimed at industrial manufacturing growth.
48.
In 2026, India's manufacturing sector has demonstrated robust growth. Which government initiative has been a significant driver of this expansion, particularly in key sectors?
A Make in India initiative.
B Production Linked Incentive (PLI) Schemes.
C Startup India Seed Fund Scheme.
D National Infrastructure Pipeline (NIP).
Answer: B
The Production Linked Incentive (PLI) Schemes, launched by the Indian government, have been instrumental in boosting domestic manufacturing and exports across various sectors by providing incentives linked to incremental sales. This has been a primary driver of the robust growth observed in 2026.
49.
A significant aspect of the RBI's 2026 digital lending guidelines is the requirement for a standardized Key Fact Statement (KFS). What is the primary purpose of this KFS?
A To provide a summary of the borrower's credit history.
B To detail all charges, interest rates, and repayment schedules in a clear and understandable format for the borrower.
C To outline the RBI's monetary policy stance.
D To list all the digital lending platforms approved by the RBI.
Answer: B
The Key Fact Statement (KFS) mandated by the RBI's 2026 digital lending guidelines aims to ensure that borrowers are fully informed about the terms and conditions of their loan, including all associated costs, interest rates, and repayment obligations, presented in a simple and accessible manner.
50.
As per the RBI's 2026 digital lending guidelines, which entity is mandated to ensure that all loan disbursals and repayments are executed only through bank accounts of the digital lending entity and not through any third-party pool account?
A The borrower.
B The Reserve Bank of India.
C The digital lending entity (lender).
D The Payment Systems Regulator.
Answer: C
The digital lending guidelines issued by the RBI in 2026 explicitly state that the digital lending entity is responsible for ensuring that all loan disbursals and repayments are conducted through their own bank accounts, thereby preventing the misuse of third-party pool accounts and enhancing transparency.
