India Economic Quiz: PMI, RBI, FDI, Exports

1.

Which of the following is a key factor that could contribute to exceeding merchandise export targets?

A A sharp appreciation of the domestic currency

B Weak global demand for goods

C Improved competitiveness and demand for Indian products abroad

D Increased import tariffs by trading partners

2.

What does exceeding export expectations generally imply for a country's economy?

A Increased trade deficit

B Stronger foreign exchange earnings and economic activity

C Reduced domestic production

D Lower demand for local goods

3.

How did India's merchandise exports perform in April 2026 compared to expectations?

A Fell short of expectations

B Met expectations exactly

C Exceeded expectations

D Remained stagnant

4.

Which sectors are often key recipients of FDI, contributing to its strong momentum?

A Only traditional agriculture

B Manufacturing, services, and technology

C Small-scale retail only

D Government bonds and treasury bills

5.

What does strong FDI inflow typically signify for an economy?

A Capital outflow and reduced economic activity

B Increased foreign debt burden

C Positive investor sentiment and potential for job creation

D Decreased technological advancement

6.

What trend was observed in Foreign Direct Investment (FDI) inflows into India in early 2026?

A Significant decline

B Stagnation

C Strong momentum and growth

D Moderate but steady increase

7.

Why might the RBI choose to maintain the repo rate despite economic growth?

A To stimulate excessive borrowing and investment

B To signal a tightening of monetary policy

C To manage inflation risks and support sustainable growth

D To encourage a rapid depreciation of the Indian Rupee

8.

What is the primary tool used by the RBI to control inflation and manage liquidity in the economy?

A Fiscal Deficit

B Repo Rate

C Balance of Trade

D Foreign Exchange Reserves

9.

What was the Reserve Bank of India's (RBI) decision regarding the repo rate in early 2026, as reported?

A Increased to 6.75%

B Decreased to 6.25%

C Maintained at 6.5%

D Increased to 7.0%

10.

What does a high Manufacturing PMI reading, like 58.8 in April 2026, typically imply for the Indian economy?

A Deterioration in business conditions

B Stagnation of industrial output

C Strong growth and improved business activity

D Increased unemployment in the manufacturing sector

Economy & Business MCQs - 2026-05-07