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Functions of MPC

This quiz aims to assess your understanding of the functions and responsibilities of the Monetary Policy Committee (MPC) in India.

15 Questions Published
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Questions

Question 1 Multiple Choice (Single Answer)

What is the primary objective of the Monetary Policy Committee (MPC) in India?

  1. To maintain price stability
  2. To promote economic growth
  3. To control inflation
  4. To manage the exchange rate
Question 2 Multiple Choice (Single Answer)

How often does the MPC meet to review and adjust monetary policy?

  1. Monthly
  2. Quarterly
  3. Semi-annually
  4. Annually
Question 3 Multiple Choice (Single Answer)

Who is the chairperson of the Monetary Policy Committee?

  1. The Governor of the Reserve Bank of India
  2. The Finance Minister of India
  3. The Prime Minister of India
  4. The President of India
Question 4 Multiple Choice (Single Answer)

How many external members are appointed to the Monetary Policy Committee?

  1. 3
  2. 4
  3. 5
  4. 6
Question 5 Multiple Choice (Single Answer)

What is the term of office for members of the Monetary Policy Committee?

  1. 2 years
  2. 3 years
  3. 4 years
  4. 5 years
Question 6 Multiple Choice (Single Answer)

What is the main instrument used by the MPC to influence monetary policy?

  1. Open market operations
  2. Bank rate
  3. Cash reserve ratio
  4. Statutory liquidity ratio
Question 7 Multiple Choice (Single Answer)

What is the impact of increasing the repo rate on the economy?

  1. It increases the cost of borrowing for banks and businesses
  2. It decreases the cost of borrowing for banks and businesses
  3. It has no impact on the cost of borrowing
  4. It increases the money supply
Question 8 Multiple Choice (Single Answer)

What is the impact of decreasing the repo rate on the economy?

  1. It increases the cost of borrowing for banks and businesses
  2. It decreases the cost of borrowing for banks and businesses
  3. It has no impact on the cost of borrowing
  4. It decreases the money supply
Question 9 Multiple Choice (Single Answer)

What is the target inflation range set by the MPC for India?

  1. 2-4%
  2. 3-5%
  3. 4-6%
  4. 5-7%
Question 10 Multiple Choice (Single Answer)

What is the role of the MPC in managing the exchange rate?

  1. It directly intervenes in the foreign exchange market
  2. It sets the exchange rate
  3. It monitors the exchange rate and takes appropriate actions
  4. It has no role in managing the exchange rate
Question 11 Multiple Choice (Single Answer)

What is the MPC's responsibility in promoting financial stability?

  1. It ensures that banks have adequate capital and liquidity
  2. It regulates the financial sector
  3. It monitors systemic risks and takes appropriate actions
  4. All of the above
Question 12 Multiple Choice (Single Answer)

What is the relationship between the MPC and the Government of India?

  1. The MPC is independent of the Government
  2. The MPC is accountable to the Government
  3. The MPC is appointed by the Government
  4. Both B and C
Question 13 Multiple Choice (Single Answer)

What is the impact of MPC's decisions on the stock market?

  1. It can lead to fluctuations in stock prices
  2. It has no impact on the stock market
  3. It always leads to an increase in stock prices
  4. It always leads to a decrease in stock prices
Question 14 Multiple Choice (Single Answer)

What is the impact of MPC's decisions on economic growth?

  1. It can stimulate economic growth
  2. It can slow down economic growth
  3. It has no impact on economic growth
  4. It can both stimulate and slow down economic growth depending on the circumstances
Question 15 Multiple Choice (Single Answer)

What is the impact of MPC's decisions on inflation?

  1. It can help control inflation
  2. It can lead to higher inflation
  3. It has no impact on inflation
  4. It can both control and lead to higher inflation depending on the circumstances
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