Economy & Business MCQs - 2026-09-05

An improved global economic outlook, leading to higher export demand and increased foreign investment, is considered a potential upside risk that could boost India's GDP growth beyond current projections.

The services sector, encompassing IT, financial services, and trade, is projected to be the primary driver of India's GDP growth in Q2 FY2027, reflecting its increasing share in the economy.

Various economic agencies and the government have projected India's GDP growth for Q2 FY2027 to be around 7.2%, driven by robust domestic demand and improving global economic conditions.

The RBI's mandate is to keep inflation within the target range of 4% with a +/- 2% tolerance band, aiming for price stability. The September 2026 review reiterated this commitment.

The Monetary Policy Committee (MPC) is mandated by the Reserve Bank of India Act, 1934, to determine the policy repo rate required to meet the inflation target while considering the objective of maintaining price stability.

As of September 2026, the RBI's Monetary Policy Committee (MPC) decided to keep the policy repo rate unchanged at 6.50% to allow the ongoing transmission of monetary policy actions to permeate the economy.