Under the Monetary Policy Framework Agreement, RBI is deemed to have failed if inflation:

CA Foundation · Business Economics · RTP · May 2026
Under the Monetary Policy Framework Agreement, RBI is deemed to have failed if inflation:
(A) A. Deviates from target even once
(B) B. Breaches tolerance limits for two consecutive quarters
(C) C. Exceeds upper or lower tolerance limits for three consecutive quarters
(D) D. Deviates from WPI targets

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Exceeds upper or lower tolerance limits for three consecutive quarters

Topics: Money Market

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