Economy & Business MCQs

Domestic demand is primarily driven by private consumption, investment (Gross Fixed Capital Formation), and government expenditure. Net exports are part of aggregate demand but represent external demand.

The topic explicitly states 'Robust Domestic Demand' as the key factor for India's strong GDP growth.

The monetary policy stance (e.g., 'withdrawal of accommodation', 'neutral', 'calibrated tightening') indicates the RBI's current view on the economy and its intended direction for monetary policy to achieve its objectives.

Selling government securities (Open Market Operations - OMOs) by the RBI absorbs liquidity from the banking system, thereby reducing the money supply and curbing inflationary pressures.

The RBI's mandate under the flexible inflation targeting framework is to keep inflation within a specified band (currently 2-6%) while supporting economic growth.

Most projections indicate that India will continue to be a leading growth engine among major economies in FY26, outpacing many developed and developing nations.

While global trade can influence India's growth, a significant decline in global trade volumes would typically be a drag on growth, not a driver. Strong domestic demand, government spending, and the services sector are usually seen as key growth drivers.

Several institutions like the IMF and World Bank have projected India's GDP growth for FY26 to be around 6.5% to 7.0%, indicating robust economic expansion.

Most international agencies and analysts expect India to continue its robust growth trajectory, outperforming many other major economies.

Sustained government capital expenditure on infrastructure and other development projects is a major driver of India's economic resilience.