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

531.

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

532.

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

533.

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

534.

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

535.

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

536.

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

537.

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

538.

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

539.

Which of the following is NOT mentioned as a reason for the strong performance of the services sector?

A Robust domestic demand

B Strong international client demand

C Government subsidies for all services

D Increased business activity

540.

The services sector is described as a major engine of:

A Inflationary pressure

B Economic growth and employment

C Government debt

D Import dependency

Economy & Business MCQs