Economy & Business MCQs

The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.

The Monetary Policy Committee (MPC) is a statutory body under the RBI Act, 1934, responsible for fixing the benchmark interest rate in India.

Two-factor authentication (like OTPs and PINs) and robust encryption protocols are fundamental security measures employed to safeguard digital transactions against fraud and unauthorized access, ensuring the integrity of the expanded digital payment infrastructure.

Digital payment infrastructure, particularly through platforms like UPI and mobile wallets, has enabled greater financial inclusion by providing easy access to financial services for previously unbanked or underbanked populations and facilitating easier access to formal credit for small businesses.

UPI and AePS have revolutionized digital payments in India by providing a low-cost, interoperable, and real-time payment system, significantly driving the expansion of digital payment infrastructure.

Higher global inflation often means higher prices for imported goods, requiring more foreign currency to purchase them. This can lead to a depletion of foreign exchange reserves if not managed. While the RBI might adjust interest rates or intervene in the forex market, a decrease in reserves is a direct consequence of increased import costs if the currency depreciates or demand for foreign currency rises.

Inflation in major economies like the US and Eurozone can significantly impact global supply chains, commodity prices, and capital flows, thereby influencing India's inflation. GDP growth, stock markets, and unemployment rates are important but less direct indicators of global inflationary pressures.

The RBI primarily uses monetary policy tools like the repo rate to manage domestic liquidity and inflation. It also manages foreign exchange reserves to stabilize the rupee against external shocks, which can be influenced by global inflation.

The RBI's 2026 data security framework typically requires digital lending platforms to report any significant data breach to the central bank within 72 hours of its detection to enable timely intervention and mitigation.

A cornerstone of enhanced data security, as mandated by the RBI in 2026, is the implementation of strong encryption techniques to protect data integrity and confidentiality, whether it's being transmitted or stored.