Which of the following is a feature of the Indian monetary system? MCQ with Answer and Explanation

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Which of the following is a feature of the Indian monetary system?

A. Managed floating exchange rate with inflation targeting

B. Fixed exchange rate without any intervention

C. Complete free floating without RBI role

D. Gold standard

Answer: Option A

Solution (By JKSSB Mock Tests)

India follows a managed floating exchange rate regime and has adopted a flexible inflation targeting framework for monetary policy.

This question belongs to: Economy GK Economy Set 1

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Question #1

The term 'Managed Floating' exchange rate system means that:

A. The exchange rate is rigidly fixed by the government

B. There is no role whatsoever for the central bank

C. The exchange rate is fixed in terms of gold only

D. The exchange rate is largely market-determined with occasional central bank intervention

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Correct Answer: Option D

Explanation:
Under a managed float, the exchange rate is primarily determined by market forces, but the central bank intervenes from time to time to prevent excessive volatility or disorderly movements.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Employees' Provident Fund' contribution is deposited by:

A. employer only

B. employee only

C. government only

D. both employer and employee

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Correct Answer: Option D

Explanation:
EPF contribution is made by both employer and employee.

This question belongs to: Economy GK Economy Set 1

Question #3

Which institution primarily provides short-term financial assistance to countries facing balance of payments problems?

A. ADB

B. World Bank

C. WTO

D. IMF

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Correct Answer: Option D

Explanation:
The IMF provides short-term financial assistance to countries with balance of payments problems.

This question belongs to: Economy GK Economy Set 1

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