Cut in Repo rate by RBI is likely to demand for goods and services in the economy ........

Economics (CUET) Money and banking

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Cut in Repo rate by RBI is likely to______________demand for goods and services in the economy.

Increase

Decrease

Either (1) or (2)

Neither (1) nor (2)

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Explanation:

Option (1) is correct
Explanation: To correct the situation of deficient demand RBI will reduce repo rate Banks in turn will reduce lending rate of interest, so there will be more demand for
loans. This will increase money supply and correct the situation of deficient demand.