In India, the exchange rate of the rupee is best described as: MCQ with Answer and Explanation

In India, the exchange rate of the rupee is best described as:
A. fully floating with no RBI intervention
B. pegged to the dollar
C. fixed by the government
D. managed floating
Answer: Option D
Solution (By JKSSB Mock Tests)
India follows a managed floating exchange rate system with occasional RBI intervention.

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Economy Set 1 Questions

Question #1
The 'GST' regime has not subsumed which central tax?
A. Special additional customs duty
B. Service tax
C. Additional excise duty
D. Basic customs duty

Correct Answer: Option D


Explanation:
Basic customs duty remains outside GST.

This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a characteristic of the 'Speculative Attack' models of currency crises?
A. Only current-account deficits cause crises
B. Crises occur only gradually
C. Reserves never matter
D. A fixed exchange rate may collapse suddenly when reserves reach a critical threshold

Correct Answer: Option D


Explanation:
First-generation speculative-attack models show that an inconsistent policy mix (e.g., persistent money-financed deficits under a fixed exchange rate) leads to a sudden attack that exhausts reserves and forces abandonment of the peg.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of the Indian economy, the demographic dividend can be harnessed through:
A. Investing in education, skill development and job creation for the working-age population
B. Raising the fertility rate continuously
C. Increasing the dependency ratio
D. Reducing the labour force participation rate

Correct Answer: Option A


Explanation:
To realise the demographic dividend, a country must invest in human capital and create productive employment opportunities for its large working-age population.

This question belongs to: Economy GK Economy Set 1