Forward guidance by a central bank means: MCQ with Answer and Explanation

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Forward guidance by a central bank means:

A. fixing exchange rates

B. regulating stock exchanges

C. communicating future policy intentions to influence expectations

D. guiding exporters

Answer: Option C

Solution (By JKSSB Mock Tests)

Forward guidance is communication by a central bank about future policy intentions.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Tax Deducted at Source' on salary is deducted by:

A. employee

B. Income Tax Department

C. employer

D. RBI

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Correct Answer: Option C

Explanation:
Employer deducts TDS on salary.

This question belongs to: Economy GK Economy Set 1

Question #2

The Sensex is a stock market index of the:

A. Bombay Stock Exchange

B. Multi Commodity Exchange

C. India International Exchange

D. National Stock Exchange

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Correct Answer: Option A

Explanation:
The Sensex is the benchmark index of the Bombay Stock Exchange (BSE).

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Mental Accounting' in behavioural economics refers to:

A. Only the formal accounting systems of firms

B. Only the national accounts

C. The tendency of individuals to categorise and treat money differently depending on its source or intended use

D. The perfect fungibility of all money

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Correct Answer: Option C

Explanation:
Mental accounting describes the cognitive processes whereby individuals separate their wealth into non-fungible mental accounts, leading to behaviour that violates the principle of fungibility assumed in standard theory.

This question belongs to: Economy GK Economy Set 1

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