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    Question

    _______________________ is an agreement reached between Government and the central bank in India – the Reserve Bank of India (RBI) - on the maximum tolerable inflation rate that RBI should target to achieve price stability.

    A Monetary Policy Correct Answer Incorrect Answer
    B Monetary Policy Framework Agreement Correct Answer Incorrect Answer
    C Fiscal Policy Framework Agreement Correct Answer Incorrect Answer
    D Fiscal Policy Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Monetary Policy Framework Agreement is an agreement reached between Government and the central bank in India – the Reserve Bank of India (RBI) - on the maximum tolerable inflation rate that RBI should target to achieve price stability. The Reserve Bank of India and Government of India signed the Monetary Policy Framework Agreement on 20 February 2015 which made inflation targeting and achieving price stability the responsibilities of RBI.

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