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Multiple Choice Questions

What is the meaning of the italicized line in the passage 2 marks 1 RBI will adopt Accommodative mon...........

Economic and social issues (RBI) Monetary and fiscal policies

PASSAGE ON RBI’S LIQUIDITY MANAGEMENT FRAMEWORK

The Reserve Bank of India (RBI) adopted a new liquidity management framework in which there would be no fixed daily liquidity injection operations, but the central bank would act whenever the banking system requires money. The ______ will remain the operating target of the monetary policy, the RBI said, which means it will ensure enough liquidity to anchor the call rate at around the repo rate.

What is the meaning of the italicized line in the passage? (2 marks)

1. RBI will adopt Accommodative monetary policy.

2. RBI will adopt expansionary monetary policy.

3. RBI will adopt contractionary monetary policy.

4. The call rate inches above the repo rate, it would signal liquidity deficit and the central bank will bring its tools to infuse liquidity

5. If the call rate is below the repo rate, that would mean the banking system has surplus liquidity

This questions was previously asked in

RBI Grade B Phase 2 Exam (2021)

View All RBIB Previous Year Papers

1 and 3 only

2 and 3 only

3 and 4 only