Question : Dear money policy of the central bank, which is used to keep growth steady and in line with other economic factors, refers to
Option 1: Tightening the money supply in the economy
Option 2: Easing the money supply in the economy.
Option 3: Allow commercial banks to work in a less strict environment
Option 4: Both (b) and (c)
Correct Answer: Tightening the money supply in the economy
Solution : The correct answer is (a) Tightening the money supply in the economy.
A dear money policy is a monetary policy that is used to reduce the amount of money in circulation in an economy. This is done by raising interest rates, which makes it more expensive for people and businesses to borrow money. This, in turn, reduces the amount of spending in the economy, which can help to control inflation.
So, the dear money policy is the opposite of the cheap money policy, which is used to increase the amount of money in circulation in an economy. The cheap money policy is used to stimulate economic growth, while the dear money policy is used to control inflation.
Question : ___________ is a process where the central bank reduces the money supply in the economy.
Option 1: Contractionary monetary policy
Option 2: Expansionary monetary policy
Option 3: Quantitative easing
Option 4: Open market operations
Question : The process of increasing the money supply and/or lowering interest rates in order to stimulate economic growth is known as:
Option 1: Fiscal policy
Option 2: Monetary policy
Option 3: Budgetary policy
Option 4: Industrial policy
Question : What is the meaning of reverse repo rate?
Option 1: The rate at which RBI borrows money from foreign banks.
Option 2: The rate at which RBI borrows money from commercial banks.
Option 3: The rate at which commercial banks borrow money from RBI.
Option 4: The rate at which commercial banks borrow money from foreign banks.
Question : ___________ refers to the total amount of money in circulation in an economy.
Option 1: Money supply
Option 2: Money demand
Option 3: Money multiplier
Option 4: Money creation
Question : It refers to the total volume of money held by public at a particular point of time in an economy.
Option 1: Money Supply
Option 3: Monetary policy
Option 4: Fiscal policy
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile