The 'asymmetric corridor' in Indian monetary policy refers to: MCQ with Answer and Explanation

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The 'asymmetric corridor' in Indian monetary policy refers to:

A. repo and reverse repo being equidistant from the policy rate

B. fixed exchange rate bands

C. different widths of the corridor at different times or instruments

D. dual GST rates

Answer: Option C

Solution (By JKSSB Mock Tests)

The asymmetric corridor refers to variations in the distance between policy rate, MSF and reverse repo rates.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'resource curse' hypothesis suggests that countries rich in natural resources:

A. may experience slower growth due to governance and economic distortions

B. always grow faster

C. have no poverty

D. are free from inflation

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Correct Answer: Option A

Explanation:
The resource curse suggests natural resource wealth may lead to slower growth due to various distortions.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of monetary policy, the 'Zero Lower Bound' problem refers to:

A. The floor on the fiscal deficit

B. The inability of real interest rates to be positive

C. The minimum reserve requirement

D. The inability of nominal interest rates to fall significantly below zero

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Correct Answer: Option D

Explanation:
The zero lower bound refers to the constraint that nominal interest rates cannot be reduced much below zero, limiting the effectiveness of conventional monetary policy in deep recessions.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'strategic sale' in disinvestment means:

A. merger of two PSUs

B. sale of controlling shareholding to a private or strategic buyer

C. sale of shares in the stock market

D. buyback of shares

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Correct Answer: Option B

Explanation:
Strategic sale involves transfer of management control.

This question belongs to: Economy GK Economy Set 1

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