Monetary Policy Quiz

What is the full form of RBI?

• Reserve Bank of Investment

• Reserve Bank of India

• Regulatory Bank of India

• Real Bank of India

Who is responsible for framing the monetary policy in India?

• Ministry of Finance

• NITI Aayog

• RBI

• SEBI

What is the main objective of monetary policy?

• Increase imports

• Control inflation and support economic growth

• Increase fiscal deficit

• Boost agriculture alone

What is the repo rate?

• Rate at which RBI lends to banks

• Rate at which banks lend to RBI

• Tax rate on goods

• Bank's interest on savings

What happens when the RBI increases the repo rate?

• Borrowing becomes cheaper

• Banks lend more freely

• Borrowing becomes expensive

• Inflation rises

Which of the following is a quantitative tool of monetary policy?

• CRR

• Moral Suasion

• Credit Rationing

• Consumer Rights

How often does the Monetary Policy Committee (MPC) meet to review the policy?

• Once a year

• Every month

• Every 2 months (Bi-monthly)

• Weekly

If inflation is rising and RBI wants to control it, what should it ideally do?

• Decrease CRR

• Increase repo rate

• Reduce reverse repo rate

• Buy government securities

Suppose the RBI reduces the SLR. What effect will this likely have on the economy?

• Banks will have to keep more money in reserves

• Banks can lend more money, boosting spending

• Inflation will drop immediately

• Currency will lose its value

In April 2020, the RBI reduced the repo rate to 4% due to COVID-19. What was the intended impact?

• Control high inflation

• Discourage spending

• Promote economic activity through easy credit

• Support foreign exchange reserves