Which of the following statements is/are correct regarding the ‘Monetary Policy Committee (MPC)?1. It decides the RBI’s benchmark interest rates.2. It is a 12-member body including the Governor of RBI and is reconstituted every year.3. It functions under the chairmanship of the Union Finance Minister.Select the correct answer using the code given below:
✓ Correct answer: a) 1 only
ExplanationStatement 1 is correct: The primary function of the MPC is to determine the policy repo rate, which is the bench- mark interest rate at which commercial banks borrow mon- ey from the RBI.This rate influences other interest rates in the economyStatement 2 is incorrect: The MPC is a 6-member body con- sisting of:3 members from the RBI, including the Governor (who acts as the chairperson).3 external members nominated by the Government of India.Members are appointed for a four-year termStatement 3 is incorrect : The MPC functions under the chairmanship of the Governor of the RBI, not the Union Fi- nance Minister.SUPER HINT S3 aligns with Function-person/organisation/ministry match trap as it's easy to manipulate to make it false.Is it RBI governor or FM?176
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