Monetary Policy Committee questions for RBI Grade B

Dear aspirants,
We are presenting you the Monetary Policy Committee questions for RBI Grade B under Finance and Management Section of the phase 2 exam. The Monetary Policy Committee (MPC) has been constituted by central government in September 2016 for maintaining price stability, while keeping in mind the objective of growth. Before going through these Monetary Policy Committee questions for RBI Grade B we recommend you to read about Monetary Policy Committee.

1. Who is responsible for conducting monetary policy in India?
   1. Ministry of Finance
   2. Department of Financial Services
   3. Department of Economic Affairs
   4. Reserve Bank of India
2. Which among the following is/are tasks of Monetary Policy Committee?
   a) Devise policy rate while maintaining price stability
   b) Fixing the benchmark policy rate (repo rate)
   c) Containing inflation within the specified target level
   d) Devising mechanism for implementing fiscal policy
   Select the correct answer from following options:
   1. Only b
   2. Only a, c and d
   3. Only a, b and c
   4. All are correct
3. Which section of RBI Act, 1934 provides the powers to constitute Monetary Policy Committee?
   1. Section 45 ZB
   2. Section 7(1)
   3. Section 21
   4. Section 35
4. What is the minimum number of meeting has to be conducted by Monetary Policy Committee?
   1. 4
   2. 6
   3. 2
   4. 8
5. What is the Inflation target range set by Monetary Policy Committee?
   1. Target: 3%, Upper tolerance level: 5%, Lower tolerance level: 1%
   2. Target: 4%, Upper tolerance level: 6%, Lower tolerance level: 2%
   3. Target: 6%, Upper tolerance level: 3%, Lower tolerance level: 9%
   4. Target: 4%, Upper tolerance level: 3%, Lower tolerance level: 5%
6. Which of the following statements is/are correct about Monetary Policy Committee?
   a) There are six members in the committee
   b) Three Members are from the RBI
   c) Other three Members of MPC are appointed by the Central Government
   d) Governor is the ex officio chairman of the committee
   Select the correct answer from following options:
   1. Only b and c
   2. Only a, c and d
   3. Only a, b and d
   4. All are correct
7. For what period Members of the Monetary Policy Committee appointed by the Central Government shall hold office?
   1. 6 years
   2. 5 years
   3. 4 years
   4. 3 years
8. Which framework is used by RBI to control Inflation?
   1. Policy Targets Agreement
   2. Quarterly Monetary policy announcement
   3. Exchange rate mechanism
   4. Flexible inflation targeting framework
9. According to RBI Act, after how many years inflation target will be set of government in consultation with RBI?
   1. 6
   2. 5
   3. 4
   4. 3
10. Which price index is targeted by MPC under its revised framework to contain inflation?
    1. Wholesale Price Index
    2. Consumer Price Index
    3. Index of Industrial Production
    4. None of these

Answers

1. 4
2. 3
3. 1
4. 1
5. 2
6. 4
7. 3
8. 4
9. 1
10. 2

We hope you find this quiz helpful for your preparation. For feedback please post comment under comments section below. Also read the previous BASEL questions for RBI Grade B.

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Reference : https://www.rbi.org.in/scripts/fs_overview.aspx?fn=2752