If the RBI wishes to increase the money supply in an economy which of the following type of monetar...........

Economic and Social Issues Monetary and Fiscal Policy

If the RBI wishes to increase the money supply in an economy, which of the following type of monetary policy will be followed by it?

Accommodative Monetary Policy

Contractionary Monetary Policy

Neutral Monetary Policy

Any of the above

None of the options given above

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Explanation:

Accommodative monetary policy means a policy of allowing the money supply to rise in line with national income and the demand for money. Accommodative monetary policy will also usually involve lower interest rates.Accommodative monetary policy may also be known as ‘easy monetary policy’ / loose monetary policy / expansionary monetary policy.The aim of accommodative monetary policy is to enable higher economic growth and lower unemployment.