The 'inflation targeting' in India uses which index as the nominal anchor? MCQ with Answer and Explanation

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The 'inflation targeting' in India uses which index as the nominal anchor?

A. WPI

B. CPI-IW only

C. GDP deflator

D. CPI-Combined

Answer: Option D

Solution (By JKSSB Mock Tests)

RBI's inflation targeting uses CPI-Combined as the nominal anchor.

This question belongs to: Economy GK Economy Set 1

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Question #1

The Human Development Index (HDI) is published by:

A. World Bank

B. United Nations Development Programme

C. International Monetary Fund

D. World Economic Forum

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Correct Answer: Option B

Explanation:
The Human Development Index is published annually by the United Nations Development Programme (UNDP) in its Human Development Report.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Giffen paradox' occurs when:

A. the good has many substitutes

B. the income effect of a price rise dominates the substitution effect for an inferior good

C. the good is a luxury

D. the substitution effect dominates the income effect

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Correct Answer: Option B

Explanation:
Giffen goods have a strong negative income effect that outweighs the substitution effect, causing demand to rise with price.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a characteristic of the 'Classical Dichotomy'?

A. Money affects real output in the long run

B. Real and nominal variables are determined separately and money is neutral

C. Real and nominal variables are always interdependent

D. Only fiscal policy is neutral

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Correct Answer: Option B

Explanation:
The classical dichotomy is the proposition that real variables (output, employment, relative prices) are determined independently of nominal variables and that money is neutral in the long run.

This question belongs to: Economy GK Economy Set 1

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