Daily Current Affairs Quiz: February 11, 2026

Statement 1 is incorrect: If inflation is too high, the Reserve Bank of India sells government securities (OMO sale) to absorb excess liquidity and reduce money supply. Buying securities would increase liquidity and worsen inflation.

Statement 2 is correct: If the rupee is rapidly depreciating, RBI typically sells dollars from its forex reserves to increase dollar supply and support the rupee in the foreign exchange market.

Statement 3 is correct: If interest rates fall in the United States or the European Union, capital tends to move towards higher-yielding emerging markets like India. This leads to dollar inflows, prompting RBI to buy dollars to prevent excessive rupee appreciation and to build forex reserves.

The real sector of the economy includes activities that involve actual production of goods and services (agriculture, manufacturing, industry, services).

Statement 1 is correct: Farmers harvesting crops = agricultural production → part of the real sector.

Statement 2 is correct: Textile mills converting raw cotton into fabric = manufacturing activity → part of the real sector.

Statement 3 is incorrect: A commercial bank lending money is a financial activity (credit creation), belonging to the financial sector, not the real sector.

Statement 4 is incorrect: Issuing Rupee Denominated Bonds overseas is capital market financing → again part of the financial sector, not real sector.

Reserve Bank of India is mandated under the RBI Act, 1934 (amended in 2016) to maintain price stability by controlling inflation through monetary policy tools like repo rate, reverse repo, CRR, and OMOs.

Statement 1 is correct: Acquiring new technology creates a long-term asset or enduring benefit for the organisation. Hence, it is treated as capital expenditure (CapEx).

Statement 2 is incorrect: Debt financing and equity financing are sources of funds, not expenditures.

• Raising debt = liability creation
• Issuing equity = ownership dilution

Neither is classified as revenue expenditure. They appear on the balance sheet, not the income–expenditure account.

During an economic recession, demand falls, private investment slows, and unemployment rises. To revive growth, governments typically adopt expansionary fiscal policy.

Increasing expenditure on public projects boosts aggregate demand, creates jobs, and crowds-in private investment. This fiscal stimulus helps pull the economy out of recession by directly supporting growth and income.