Economy & Business MCQs

Steady growth in the IIP signifies that factories are producing more goods, which is a direct reflection of increased industrial activity and often correlates with higher demand for manufactured products and overall economic expansion.

The Index of Industrial Production (IIP) is compiled and released by the National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation.

The Index of Industrial Production (IIP) primarily measures the changes in the volume of production in the industrial sector. The manufacturing sector has the largest weightage in the IIP and thus contributes the most to its overall growth.

The repo rate is the rate at which the RBI lends money to commercial banks. If the RBI maintains the repo rate, the cost of borrowing for these banks from the RBI will remain at the existing level.

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.

The RBI's Monetary Policy Committee (MPC) typically maintains interest rates to manage inflation. When inflationary pressures are present, keeping the repo rate steady or increasing it helps to curb demand and anchor inflation expectations, thereby working towards price stability.

High GDP growth typically leads to increased economic activity, which in turn results in higher tax collections (both direct and indirect) for the government, improving its fiscal health and reducing the fiscal deficit.

Sustained government capital expenditure boosts infrastructure and creates demand, while strong private sector investment indicates business confidence and contributes to job creation and economic output, both crucial for high GDP growth.

GDP growth exceeding 7.5% is considered a high growth rate, indicating a robust and expanding economy with strong underlying fundamentals, such as healthy domestic demand, investment, and production.

Mandating trades on recognized exchanges improves price discovery, transparency, and settlement efficiency, which are key goals for SEBI in developing a robust corporate bond market.