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Which of the following are limitations of anti-inflationary monetary policy? (A) Commercial Banks…

All three—(A) Commercial Banks' portfolio adjustments (selling government securities to expand credit), (B) the growth of Non-Bank Financial Intermediaries (NBFIs) outside…

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Which of the following are limitations of anti-inflationary monetary policy?
(A) Commercial Banks Portfolio Adjustment
(B) Growth of Non-Bank Financial Intermediaries
(C) Risk of destabilisation

Select one answer
Answer and explanation

Correct answer D

All three—(A) Commercial Banks' portfolio adjustments (selling government securities to expand credit), (B) the growth of Non-Bank Financial Intermediaries (NBFIs) outside direct central bank credit control, and (C) the risk of economic destabilisation/recession—are classic textbook limitations of anti-inflationary monetary policy.

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