Economy & Business MCQs

The RBI mandated that loan disbursements and repayments must be executed directly between the Regulated Entity's bank account and the borrower's bank account, without any pass-through/pool account of the Lending Service Provider (LSP) or any third party. This ensures transparency and accountability.

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.

Boosting domestic manufacturing typically leads to the creation of more jobs within the country as production scales up, contributing to economic growth and development.

Production-Linked Incentives (PLI) are a key fiscal tool used by governments to encourage domestic manufacturing by providing incentives based on incremental production.

Fiscal incentives like tax breaks or subsidies are designed to encourage domestic production, thereby supporting initiatives like 'Make in India' and potentially leading to higher exports.