Economy & Business MCQs

61.

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

62.

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

63.

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

64.

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)

65.

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

66.

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

67.

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

68.

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

69.

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

70.

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