Economics · Inflation Targeting
Under India's Flexible Inflation Targeting (FIT) framework, which of the following statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The inflation target is reviewed every three years in consultation with the RBI.
- 2Failure to maintain inflation within the tolerance band for three consecutive quarters requires the RBI to report to the Central Government.✓
- 3The Monetary Policy Committee (MPC) consists entirely of RBI officials.
- 4The inflation target is set solely by the Reserve Bank of India.
Correct answer
Failure to maintain inflation within the tolerance band for three consecutive quarters requires the RBI to report to the Central Government.
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