Economy & Business MCQs - 2026-05-17

A cautious stance often involves keeping interest rates relatively high or not cutting them significantly, which can make borrowing more expensive and potentially slow down economic activity.

The Repo Rate and Reverse Repo Rate are key policy rates that the RBI uses to influence liquidity in the banking system and thereby control inflation and guide monetary policy.

A cautious monetary stance suggests that the RBI is wary of potential inflationary pressures and is prioritizing keeping inflation under control, even if it means slower economic growth in the short term.

Lower inflation means that consumers' money can buy more goods and services, thus increasing their real purchasing power and improving their standard of living.

The Consumer Price Index (CPI) is the primary measure for retail inflation as it tracks the prices of a basket of goods and services consumed by households.

A 12-month low in retail inflation indicates that prices are rising at a slower pace compared to the previous year, which generally leads to increased purchasing power and a decrease in the overall rate of price increase.