QUIZ – 2020: INSIGHTS STATIC QUIZ, 21 February 2020 – Economy

Solution: a)

The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy with the primary objective of maintaining price stability while keeping in mind the objective of growth. This responsibility is explicitly mandated under the Reserve Bank of India Act, as amended in 2016. It is now transferred to the Monetary Policy Committee, which will also face the same primary objective, i.e. to keep inflation within an acceptable band. If inflation is in control, prices will be relatively stable.

Solution: c)

Rupee deprecation badly affects importers or those who wish to visit foreign countries for holidays as they need more local currency to get the same service or product. When rupee depreciates exporters from India are benefited. (Eg: Software companies, seafood exporters etc.) Depreciation of rupee benefit the overseas Indians as those who are working abroad will gain more on remitting money to their homeland.

Solution: d)

The Reserve Bank of India (RBI) regulates and supervises Public Sector and Private Sector Banks. The powers of RBI are wide-ranging and comprehensive to deal with various situations that may emerge in all banks, irrespective of ownership i.e. the Public Sector and the Private Sector owned Banks.

Solution: d)

Loans from the foreign banks constitute capital account of Balance of Payment.

Solution: b)