Economy & Business MCQs

Increasing the repo rate makes borrowing more expensive for banks, thereby reducing their incentive to borrow and lend, which helps absorb excess liquidity and curb inflation.

The RBI's mandate is to maintain price stability, which is defined as keeping inflation within a specified band (currently 2-6%), while also supporting economic growth.

India's large and young population, coupled with a growing middle class, fuels robust domestic demand, which is a key differentiator for its growth prospects.

While a slowdown in global trade could pose a risk, the primary drivers of India's growth are expected to be domestic factors like consumption and government investment, along with a strong services sector.

Several international and domestic agencies have projected India's GDP growth for FY26 to be in the range of 7.0% to 7.5%, driven by robust domestic demand and government spending.