In order to encourage investment in the country, the RBI may :
To encourage investment and economic activity in the country, the RBI adopts an expansionary monetary policy by reducing the Cash Reserve Ratio (CRR). Lowering the CRR…
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In order to encourage investment in the country, the RBI may :
Answer and explanation
Correct answer A
To encourage investment and economic activity in the country, the RBI adopts an expansionary monetary policy by reducing the Cash Reserve Ratio (CRR). Lowering the CRR releases additional lendable funds to commercial banks, expands credit availability, and puts downward pressure on market interest rates, thereby stimulating borrowing and capital investment.
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