Which of the following indices is used by the RBI as the nominal anchor for monetary policy in India? MCQ with Answer and Explanation

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Which of the following indices is used by the RBI as the nominal anchor for monetary policy in India?

A. Wholesale Price Index

B. Producer Price Index

C. GDP Deflator

D. Consumer Price Index (Combined)

Answer: Option D

Solution (By JKSSB Mock Tests)

Under the Flexible Inflation Targeting framework, the RBI targets CPI-Combined inflation as the nominal anchor for monetary policy.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'National Stock Exchange' was established in:

A. 1875

B. 1995

C. 1992

D. 2000

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Correct Answer: Option C

Explanation:
NSE was established in 1992.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'SIDBI' is a wholly owned subsidiary of:

A. National Housing Bank

B. NABARD

C. EXIM Bank

D. RBI

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Correct Answer: Option D

Explanation:
SIDBI is a wholly owned subsidiary of the RBI.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the 'Carry Trade' strategy in foreign-exchange markets?

A. Only hedging all exchange-rate risk

B. Borrowing in a high-interest-rate currency and investing in a low-interest-rate currency

C. Only trading on the basis of purchasing-power parity

D. Borrowing in a low-interest-rate currency and investing in a high-interest-rate currency

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Correct Answer: Option D

Explanation:
A carry trade involves borrowing funds in a currency with a low interest rate and investing them in a currency with a higher interest rate, thereby earning the interest differential while remaining exposed to exchange-rate risk.

This question belongs to: Economy GK Economy Set 1

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