Which of the statements gives an accurate picture of the effect of the increase in the repo rate ?
An increase in the repo rate makes central-bank borrowing more expensive for banks. This tends to restrain bank lending and reduce the money supply.
Choose your answer
Which of the statements gives an accurate picture of the effect of the increase in the repo rate ?
Answer and explanation
Correct answer A
An increase in the repo rate makes central-bank borrowing more expensive for banks. This tends to restrain bank lending and reduce the money supply.
Practice for these exams
-
Madhya Pradesh SET (MP SET)
-
Maharashtra and Goa SET (MH SET)