Arrange the following in sequence for the impact on economy when central bank raises Repo rate :
A. People will take less loan.
B. Money supply will decrease in economy.
C. Borrowing become costlier.
D. Commercial banks will increase interest rate.
E. Aggregrate demand will decrease.
Choose the correct answer from the options given below :

Question

Read the following text carefully:
“The Reserve Bank of India (RBI) announced a 50 basis point Repo Rate cut to 5.50% from 6%.”
In the light of the given text and common understanding, answer the following questions:

[(i)] Identify the economic issue indicated in the above text.
[(ii)] Explain the likely causes and consequences of this step of RBI on the economy.

Answer 1

The correct option is (C) :D, C, A, B, E.

The Correct Option is C

Solution and Explanation

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