Economy & Business MCQs

When inflation is stable and growth is robust, the central bank has more flexibility. Maintaining the repo rate indicates a cautious approach, avoiding sudden shocks to the economy while supporting continued growth.

Maintaining the repo rate suggests that the RBI finds the current monetary conditions appropriate, either due to stable inflation and growth or a desire to assess the impact of previous policy changes before making further moves.

The repo rate is the rate at which the RBI lends money to commercial banks. By adjusting this rate, the RBI influences borrowing costs and thus controls inflation and liquidity.

The Monetary Policy Committee (MPC) is a statutory body of the Reserve Bank of India, entrusted with the task of fixing the benchmark policy interest rate (repo rate) to achieve the inflation target.

'Withdrawal of Accommodation' implies that the RBI will continue to focus on withdrawing liquidity from the system to ensure that inflation aligns with the target, even if it means not supporting growth through accommodative measures.

The RBI's Monetary Policy Committee (MPC) recently decided to keep the repo rate unchanged at 6.5%.

The 'Make in India' initiative was launched by the Government of India to encourage companies to manufacture their products in India and boost the manufacturing sector.

Strong expansion in manufacturing implies increased production, which directly contributes to higher industrial output and typically leads to the creation of more jobs in the economy.

The Purchasing Managers' Index (PMI) for Manufacturing is a key indicator that reflects the health and expansion of the manufacturing sector, based on surveys of purchasing managers.

The Monetary Policy Committee (MPC) is a six-member committee, headed by the RBI Governor, that is entrusted with the task of fixing the benchmark interest rate (repo rate) in India.