Multiple Choice Questions on Consider the following statements 1 A policy of low repo rate by the RBI decreases the money supply ........... for UPSC Civil Services Examination (General Studies) Preparation

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Multiple Choice Questions

Consider the following statements 1 A policy of low repo rate by the RBI decreases the money supply ...........

Economic Affairs Money Supply and Monetary Policy
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    Consider the following statements

    1. A policy of low repo rate by the RBI decreases the money supply in the economy.

    2. A policy of high repo rate by the RBI increases the money supply in the economy.

    Which of the statements given above is/are incorrect?

    1 only

    Incorrect Answer

    2 only

    Incorrect Answer

    Both 1 and 2

    Correct Answer

    Neither 1 nor 2

    Incorrect Answer
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    Explanation:

    Both 1 and 2 are incorrect. When repo rate is low the loans will be cheaper and the money supplying the economy will increase and when repo rate is high the loans will be costlier and the money supply in the economy will decrease

    By: Kritika Kaushal
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