UPSC PRELIMS · ECONOMICS · MONETARY POLICY — EXPANSIONIST POLICY

If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do? 1. Cut and optimise the Statutory Liquidity Ratio 2. Increase the Marginal Standing Facility Rate 3. Cut the Bank Rate and Repo Rate Select the correct answer using the code given below:

Take a breath. Choose one. Press A–D on your keyboard if you like.

EXPLANATION

An expansionary stance would lower restrictive rates/ratios; increasing the MSF rate would instead make bank borrowing more expensive.

Ready for the real thing?

Battle other aspirants in timed 1v1 Prelims duels, climb the rating ladder and keep your daily streak. Free and ad-free.