Economy & Business MCQs

The primary objective of the Monetary Policy Committee (MPC) is to maintain price stability while keeping in mind the objective of growth. It is mandated to keep inflation within a target band.

The PLI schemes are designed to boost domestic manufacturing, create jobs, reduce import bills, and make Indian manufacturers globally competitive by offering incentives on incremental sales from products manufactured in India.

The three broad sectors of IIP are Manufacturing, Mining, and Electricity. Manufacturing has the highest weightage (approximately 77.6%), followed by Mining (approximately 14.4%) and Electricity (approximately 8%).

The Index of Industrial Production (IIP) is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products in India. CPI and WPI measure inflation, while PMI is a survey-based indicator of economic trends.

The Government of India, in consultation with the RBI, sets the inflation target. The current target, reaffirmed periodically, is 4% with a tolerance band of +/- 2%, meaning inflation should ideally be between 2% and 6%.

A "withdrawal of accommodation" stance indicates that the MPC intends to reduce the amount of liquidity in the system and/or raise interest rates to curb inflation, or at least keep them elevated, rather than cutting them. It implies a tightening bias.

The primary objective of the MPC is to maintain price stability while keeping in mind the objective of growth. The inflation target is 4% with a +/- 2% band.

While infrastructure spending can indirectly help manage supply-side inflation over the long term, a direct and immediate reduction in inflation is not the primary or intended outcome of a stimulus package focused on project development.

The stimulus package includes the issuance of tax-exempt Infrastructure Bonds to attract private investment and provide long-term funding for critical projects.

The stimulus package is designed to accelerate the development of physical infrastructure, thereby boosting the manufacturing and construction sectors, creating jobs, and improving logistics.