UPSC Prelims Practice Questions — Stock markets crash over 3% as oil price spikes to $114 a barrel
Q1. In monetary policy commentary, the term 'hawkish stance' of a central bank such as the U.S. Federal Reserve most precisely refers to which one of the following?
- A. A bias towards keeping policy interest rates higher for longer to contain inflation, and a reluctance to cut rates
- B. Aggressive open-market purchases of government securities to expand the central bank's balance sheet
- C. Direct intervention in the foreign exchange market to defend the value of the domestic currency
- D. Lowering of the reserve requirement on commercial banks to stimulate credit growth
Q2. According to the U.S. Energy Information Administration, which one of the following is the world's most important oil transit chokepoint by volume of crude oil and petroleum products flow?
- A. Strait of Malacca
- B. Suez Canal and SUMED Pipeline
- C. Strait of Hormuz
- D. Bab el-Mandeb
Q3. As per the U.S. Energy Information Administration's 2024 estimate, approximately what share of global petroleum liquids consumption passed through the Strait of Hormuz — the disruption of which triggered the March 2026 oil price spike?
- A. About 10%
- B. About 20%
- C. About 35%
- D. About 50%