Economy & Business MCQs

71.

The term 'external shocks' in economics refers to:

A Internal political instability

B Unexpected events originating from outside the domestic economy

C Natural disasters within the country

D Changes in domestic consumer behavior

72.

What does 'balance of payments' refer to in the context of foreign exchange reserves?

A The country's internal debt

B The difference between a country's imports and exports of goods and services

C The total value of domestic currency

D The country's stock market performance

73.

The record high in foreign exchange reserves is a positive indicator of India's:

A Economic weakness

B Ability to meet international financial obligations

C Increased reliance on foreign aid

D Growing trade deficit

74.

A strong foreign exchange reserve position enhances the central bank's flexibility in:

A Increasing inflation

B Managing the exchange rate and maintaining macroeconomic stability

C Reducing foreign investment

D Increasing import duties

75.

Besides foreign currency assets, what other components contribute to India's foreign exchange reserves?

A Government bonds and corporate debt

B Gold reserves and special drawing rights (SDRs)

C Domestic currency and real estate

D Commodity futures and derivatives

76.

The RBI's active management of the foreign exchange market contributes to:

A Increased currency volatility

B Depletion of reserves

C Build-up of reserves

D Reduced investor confidence

77.

What is a primary benefit of substantial foreign exchange reserves?

A Increased currency depreciation

B Reduced capacity to manage import bills

C A strong buffer against external shocks

D Decreased investor confidence

78.

Which of the following is NOT mentioned as a factor contributing to the surge in foreign exchange reserves?

A Growth in remittances

B Sustained FDI and FPI inflows

C Unfavorable balance of payments

D RBI's management of the forex market

79.

The accumulation of foreign exchange reserves is a testament to:

A Weak external sector performance

B Declining capital inflows

C Strong external sector performance and robust capital inflows

D Increased import bills

80.

What is the approximate all-time high level reached by India's foreign exchange reserves in early April 2026?

A $600 billion

B $625 billion

C $650 billion

D $675 billion

Economy & Business MCQs - 2026-04-01