Economy and Business MCQs for Competitive Exams

1.

The new liquidity management framework by RBI is expected to enhance the transmission of monetary policy by:

A Reducing the volatility of short-term interest rates

B Increasing the cost of borrowing for banks

C Limiting the availability of credit

D Making the policy rate less predictable

2.

Which of the following is a key component of the RBI's new liquidity management framework?

A Introduction of a fixed repo rate for all banks

B A more dynamic approach using various instruments

C Elimination of the Marginal Standing Facility (MSF)

D A single policy rate for all liquidity operations

3.

What is the primary objective of the Reserve Bank of India's (RBI) new liquidity management framework?

A To increase inflation

B To manage systemic liquidity effectively

C To reduce interest rates

D To encourage excessive borrowing

4.

What does a PMI reading above 50 generally indicate for a manufacturing sector?

A Contraction in activity

B No change in activity

C Expansion in activity

D Stagnation

5.

Which of the following factors contributed to the record high manufacturing PMI in India in May 2026?

A Decline in new orders and production

B Increase in input costs and subdued demand

C Robust growth in new orders and production

D Reduction in export sales

6.

What was the Purchasing Managers' Index (PMI) for India's manufacturing sector in May 2026, as reported to be a record high?

A 61.7

B 63.7

C 62.7

D 60.7

Economy & Business MCQs - 2026-05-04