In 2013, Morgan Stanley used the label 'Fragile Five' for emerging economies hit hard by the taper tantrum. Which set of countries did it cover?

India, Brazil, Indonesia, South Africa and Turkey. The Fragile Five were India, Brazil, Indonesia, South Africa and Turkey. The label came in 2013, after Bernanke signalled on 22 May 2013 that Fed asset purchases could slow. The other options swap in Mexico, Argentina or Russia, which were not in the group. Read more: US Fed and the World Economy: How a US Rate Move Reaches India

Assertion (A): The 2013 taper tantrum hurt emerging markets such as India. Reason (R): On 22 May 2013, Fed Chairman Bernanke told Congress that asset purchases could slow. Which one is correct?

Both A and R are true, and R is the correct explanation of A. Bernanke's 22 May 2013 testimony signalled slower asset purchases. That raised US yields and pushed investors out of emerging-market assets. Such tightening signals can raise emerging-market yields, trigger portfolio outflows and weaken currencies. So R explains A. Read more: US Fed and the World Economy: How a US Rate Move Reaches India

Consider the following statements. 1. On 16 September 2026 the FOMC raised the target range by 25 bp to 3.75%-4.00%, by a 12-0 vote. 2. On 28 October 2026 the FOMC held at 3.75%-4.00% by a 10-2 vote, with Cook and Hammack preferring a further hike. 3. On 29 July 2026 Hammack, Kashkari and Logan dissented, preferring a 25 bp cut. 4. On 7 October 2026 the RBI MPC raised the repo rate by 25 bp to 5.50%, with the SDF at 5.25%. How many of the statements given above are correct?

Only three. Statements 1, 2 and 4 are correct. Statement 3 is wrong because the three July dissenters preferred a 25 bp hike, not a cut. This showed hike pressure before the September increase. The RBI moved to 5.50% in October after holding at 5.25% earlier in 2026. Read more: US Fed and the World Economy: How a US Rate Move Reaches India

Which statement correctly contrasts the RBI's monetary policy framework with the Fed's?

The RBI targets 4% CPI inflation with a 2%-6% band, set by a six-member MPC, while the Fed works under a dual mandate with a 2% inflation goal. The RBI follows flexible inflation targeting: 4% CPI with a 2%-6% band, retained for April 2026-March 2031. A six-member MPC sets the repo rate. The Fed has a dual mandate of maximum employment and stable prices, with a 2% inflation goal. The other options mix up the targets, bands and mandates. Read more: US Fed and the World Economy: How a US Rate Move Reaches India

Consider the following statements about the US Federal Reserve. 1. The FOMC has 12 voting members, including the 7 Board governors and the New York Fed president. 2. The Federal Reserve Act sets goals of maximum employment, stable prices and moderate long-term interest rates, called the dual mandate. 3. The Fed’s stated inflation goal is 4 percent. Which of the statements given above is/are correct?

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