Economy & Business MCQs

When the Rupee depreciates sharply due to global volatility, the RBI might sell dollars from its reserves to buy rupees. This action absorbs rupees from the market, thus reducing liquidity and supporting the Rupee.

Open Market Operations (OMOs), such as the purchase and sale of government securities, are a key monetary policy tool used by the RBI to inject or absorb liquidity from the banking system, thereby influencing interest rates and inflation.

The PLI scheme for semiconductors is designed to incentivize investments across the value chain, including chip design, wafer fabrication (foundries), assembly, testing, and packaging.

The expansion aims to create a robust domestic semiconductor manufacturing and design ecosystem, thereby reducing dependence on imports and enhancing technological self-reliance.

The government has been actively promoting the semiconductor industry through various initiatives, including the expansion of the PLI scheme to cover the entire semiconductor ecosystem.

Keeping the repo rate unchanged often signals a neutral or cautiously optimistic stance, balancing the need to control inflation with supporting economic growth. It suggests the current policy settings are deemed appropriate for the prevailing economic conditions.

The Monetary Policy Committee (MPC) is mandated to set the policy repo rate to meet the inflation target, while ensuring that inflation moves towards the medium-term target, while keeping in mind the objective of growth.

The RBI's Monetary Policy Committee (MPC) in its September 2026 review decided to keep the policy repo rate unchanged at 6.50%.

A high PMI reading, especially at an 18-month high, indicates improving business conditions, increased output, and new orders in the manufacturing sector.

The PMI reaching an 18-month high signifies that the current level of expansion is the strongest seen in the last 18 months.