MCQs on India's Economy: GDP, Inflation, RBI Policy

101.

Why might the RBI maintain the repo rate despite inflation concerns?

A To encourage borrowing and stimulate economic growth.

B To reduce the cost of borrowing for the government.

C To increase liquidity in the banking system.

D To curb inflation by making borrowing more expensive.

102.

What is the Repo Rate?

A The rate at which commercial banks lend to the public.

B The rate at which the RBI lends to commercial banks.

C The rate at which commercial banks lend to each other.

D The rate at which the RBI borrows from commercial banks.

103.

What factors typically contribute to a high Services PMI reading in India?

A Decline in new orders and business activity

B Increased demand, business expansion, and job creation

C Rising input costs and inflationary pressures

D Reduced employment and business closures

104.

A PMI reading above what level generally indicates expansion in the sector?

A 40

B 50

C 60

D 70

105.

What does the Purchasing Managers' Index (PMI) measure?

A Overall economic growth

B Manufacturing and services sector activity

C Inflation rates

D Unemployment levels

106.

What is the effective corporate tax rate for existing domestic companies that opt for the regime under Section 115BAA (without exemptions)?

A 15%

B 25%

C 22% (plus applicable surcharge and cess)

D 30%

107.

What is the primary goal of the government in reviewing and simplifying the corporate tax framework for manufacturing?

A To discourage foreign direct investment

B To increase the complexity of tax compliance

C To boost domestic production and make India a global manufacturing hub

D To phase out the 'Make in India' initiative

108.

Under which section of the Income Tax Act was the 15% concessional corporate tax rate introduced for new domestic manufacturing companies?

A Section 115BAA

B Section 115BAB

C Section 80IA

D Section 10AA

109.

When the RBI maintains a 'Withdrawal of Accommodation' stance, it implies:

A Reducing the money supply to control inflation

B Increasing the money supply to boost consumption

C Keeping interest rates at the lowest possible level

D Eliminating all taxes on banking transactions

110.

Which of the following best describes the 'Repo Rate'?

A The rate at which RBI borrows money from commercial banks

B The rate at which commercial banks lend to the public

C The rate at which RBI lends money to commercial banks against securities

D The rate of interest on government bonds

Economy & Business MCQs