Question

What is the impact of an increase in the reverse repo

Q: Answer-What is the impact of an increase in the reverse repo rate?

An increase in the reverse repo rate generally tightens the liquidity in the banking system as banks are incentivized to park more funds with the central bank, reducing money available for loans and potentially slowing economic activity.

rate?

A Reduces liquidity and makes home loans costlier.

B Reduces liquidity only.

C Makes home loans more affordable and increases money flow.

D Increases money flow only.

Practice Next

More Economics Questions

What is 'Judima'?
Which of the following is used for measuring the rate of transpiration?
Which plant tissue is responsible for making the plant hard and stiff?
Which of the following is not classified as a Bio-fertilizer?
Which phylum does the genus 'Fasciola', known as liver flukes, belong to?
Which one is an Anticoagulant Substance in the blood?
What is the name of India's first oral contraceptive pill developed by Dr. Nitya Anand?
Name a reproductive strategy in which parasites take advantage of the care of other individuals of the same species or different species to raise their ...
Fermentation is a
Which vitamin is also referred to as Tocopherol?

Relevant for Exams:

What is the impact of an increase in the reverse repo

Solution

Relevant for Exams: