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. GDP Deflator

B. Wholesale Price Index

C. Producer Price Index

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

Tax buoyancy measures the responsiveness of:

A. expenditure to revenue

B. tax revenue to changes in GDP including discretionary changes

C. tax revenue to changes in GDP without discretionary changes

D. imports to exports

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Correct Answer: Option B

Explanation:
Tax buoyancy includes both automatic and discretionary changes in tax revenue relative to GDP growth.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of demand theory, the law of demand states that, ceteris paribus:

A. Price and quantity demanded are inversely related

B. Income and quantity demanded are inversely related

C. Price and quantity demanded are positively related

D. Price and supply are inversely related

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Correct Answer: Option A

Explanation:
The law of demand states that, other things remaining constant, the quantity demanded of a commodity falls when its price rises and rises when its price falls, indicating an inverse relationship between price and quantity demanded.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' on port services is:

A. 28%

B. 18%

C. 12%

D. 5%

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Correct Answer: Option B

Explanation:
Port services attract 18% GST.

This question belongs to: Economy GK Economy Set 1

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