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

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In India, the exchange rate of the rupee is best described as:

A. fully floating with no RBI intervention

B. fixed by the government

C. pegged to the dollar

D. managed floating

Answer: Option D

Solution (By JKSSB Mock Tests)

India follows a managed floating exchange rate system with occasional RBI intervention.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'GST' regime has subsumed which of the following central taxes?

A. Income tax

B. Corporate tax

C. Central Excise Duty

D. Customs duty

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Correct Answer: Option C

Explanation:
GST subsumed central excise duty, service tax, additional customs duty, etc.

This question belongs to: Economy GK Economy Set 1

Question #2

Repo rate is the rate at which the Reserve Bank of India:

A. lends short-term funds to commercial banks against government securities

B. accepts deposits from public

C. lends to the government

D. borrows money from commercial banks

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Correct Answer: Option A

Explanation:
Repo rate is the rate at which the RBI lends short-term funds to banks against government securities.

This question belongs to: Economy GK Economy Set 1

Question #3

Keynes' liquidity preference theory relates the demand for money to:

A. exchange rate

B. prices only

C. income only

D. interest rate and income

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Correct Answer: Option D

Explanation:
Liquidity preference theory says money demand depends on income and the interest rate.

This question belongs to: Economy GK Economy Set 1

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