Ten MCQs on current International and national events - 197

PRERNA FOR IAS

(ASSOCIATE OF SAMKALP)

A-Category MCQs -197

Q1. RBI Monetary Policy, Inflation and Economic Growth

In the context of the reported increase in the RBI's repo rate to 5.50%, consider the following statements:

1. An increase in the repo rate generally raises borrowing costs and can moderate aggregate demand.
2. Monetary tightening can directly increase agricultural production and reduce international crude oil prices.
3. Persistent inflation may reduce the purchasing power of households, particularly those with lower incomes.
4. Monetary policy must consider inflation expectations, economic growth and financial stability.

Which of the statements given above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1, 2, 3 and 4

Correct Answer: (b) 1, 3 and 4 only

Explanation: The supplied summaries report that the RBI increased the repo rate by 25 basis points to address renewed inflationary pressures. A higher repo rate generally increases borrowing costs, reducing credit demand and helping control demand-driven inflation. However, higher rates can also discourage investment and consumption. Statement 2 is incorrect because monetary policy cannot directly increase crop production or reduce international oil prices. Such supply-side problems require government measures involving agriculture, energy and logistics.

Hidden trap: Monetary tightening is not equally effective against every type of inflation.

Elimination clue: The word directly makes Statement 2 incorrect.

Q2. Election Commission, Constitutional Independence and Accountability

With reference to the Election Commission of India, consider the following statements:

1. Article 324 vests the superintendence, direction and control of elections in the Election Commission.
2. Article 326 provides for elections to the Lok Sabha and State Legislative Assemblies on the basis of adult suffrage.
3. Constitutional independence makes the Election Commission completely immune from judicial review.
4. Transparent appointments, fair procedures and accessible remedies can strengthen public confidence in electoral administration.

Which of the statements given above are correct?

(a) 1 and 3 only (b) 2, 3 and 4 only (c) 1, 2 and 4 only (d) 1, 2, 3 and 4

Correct Answer: (c) 1, 2 and 4 only

Explanation: The supplied summaries discuss debates concerning the appointment of Election Commissioners and the revision of electoral rolls. Article 324 establishes the Election Commission's constitutional authority, while Article 326 provides the basis for adult suffrage. Statement 3 is incorrect because institutional independence does not place a constitutional authority beyond the law. Judicial review can examine the legality of decisions without taking over routine election administration.

Public confidence also depends on transparent procedures, proper notice and effective appeals.

Hidden trap: Independence and accountability are complementary, not contradictory.