📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      Which one is an indication of policy tightening?

      A An increase in the Bank Rate Correct Answer Incorrect Answer
      B A fall in the market rate of interest Correct Answer Incorrect Answer
      C RBI no longer provides loans to commercial banks Correct Answer Incorrect Answer
      D Easy credit policy of banks Correct Answer Incorrect Answer
      E None of the Above Correct Answer Incorrect Answer

      Solution

      Tightening policy occurs when central banks raise the policy rates, and easing occurs when central banks lower the policy rate. In a tightening monetary policy environment, the RBI raises policy rates so as to reduce the money supply, thereby controlling inflation in the economy.

      Practice Next
      More Economic and Social Issues ESI Questions
      ask-question