Economy & Business MCQs: RBI Policy & Inflation August 2026

1.

A moderation in retail inflation, as observed in August 2026, could potentially lead to which of the following policy implications?

A An immediate increase in the repo rate by the RBI.

B A possibility of the RBI considering a reduction in the repo rate in future reviews.

C Increased government spending on subsidies.

D A tightening of fiscal policy by the government.

2.

Which index is commonly used to measure retail inflation in India?

A Wholesale Price Index (WPI)

B Consumer Price Index (CPI)

C Index of Industrial Production (IIP)

D Gross Domestic Product (GDP) Deflator

3.

What does it mean when retail inflation shows signs of moderation in August 2026?

A The rate at which prices are increasing is slowing down.

B Prices of goods and services are falling significantly.

C Inflation has completely stopped.

D The cost of living has decreased.

4.

Maintaining the repo rate at 6.5% in August 2026 is generally indicative of the RBI's stance on which of the following?

A Aggressive monetary easing to boost growth

B Tightening monetary policy to control inflation

C A neutral stance, balancing growth and inflation concerns

D Focusing solely on exchange rate stability

5.

Which committee of the RBI is responsible for deciding the repo rate in its bi-monthly policy reviews?

A Financial Stability and Development Council (FSDC)

B Monetary Policy Committee (MPC)

C Securities and Exchange Board of India (SEBI)

D Reserve Bank of India Board

6.

In its August 2026 policy review, the Reserve Bank of India (RBI) decided to maintain the repo rate at what percentage?

A 6.25%

B 6.50%

C 6.75%

D 7.00%

Economy & Business MCQs - 2026-08-08