Economics · Monetary Policy
The Monetary Policy Framework Agreement (MPFA) between the Government of India and the Reserve Bank of India underpins India's flexible inflation targeting framework. Consider the following statements: 1. The inflation target is set by the Central Government, in consultation with the RBI, once every five years. 2. The upper tolerance band for CPI inflation is set at 6%, with the target being 4%. 3. Failure to maintain inflation within the tolerance band for three consecutive quarters triggers an automatic mandatory repo rate hike. 4. The Monetary Policy Committee (MPC) consists of six members: three from the RBI (including the Governor) and three external members appointed by the Central Government. Which of the statements given above are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 11 and 4 only
- 21, 2 and 4 only✓
- 32 and 3 only
- 42, 3 and 4 only
Correct answer
1, 2 and 4 only
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Monetary Policy MCQs →Want more practice questions on Monetary Policy?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Monetary Policy