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Inflation stays above the upper tolerance level for three consecutive quarters. This counts as:
AFailure to meet the target
BA perfectly normal outcome
CA period of deflation
DA rise in fiscal deficit
Answer & Solution
Correct answer: A. Failure to meet the target
1. The Government has notified what failure means.
2. Three consecutive quarters outside the band is the test.
3. RBI must then report reasons and remedies.
_Source: Reserve Bank of India, Monetary Policy function overview (rbi.org.in)._
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