Question : If inflation is to be combated, the RBI:
Option 1: Raises SLR and lowers CRR
Option 2: Raises both SLR and CRR
Option 3: Lowers SLR and raises CRR
Option 4: lowers both SLR and CRR
Correct Answer: Lowers SLR and raises CRR
Solution : The correct answer is (c) Lowers SLR (Statutory Liquidity Ratio) and raises CRR (Cash Reserve Ratio)
By lowering the SLR, banks have more liquidity available to lend to the economy, which stimulates economic activity. Raising the CRR requires banks to keep a higher proportion of their deposits as reserves with the central bank, reducing the amount of money available for lending. These measures help control the money supply and curb inflationary pressures in the economy.
Question : The rate at which the RBI lends to commercial banks is called:
Option 1: CRR
Option 2: SLR
Option 3: Repo rate
Option 4: Reverse repo rate
Question : The rate at which the RBI borrows from commercial banks is called:
Question : The Phillips curve shows the relationship between:
Option 1: Inflation and unemployment
Option 2: GDP and inflation
Option 3: GDP and unemployment
Option 4: Interest rates and inflation
Question : ___________ is the rate at which the central bank borrows money from commercial banks.
Option 1: Repo rate
Option 2: Reverse repo rate
Option 3: Cash reserve ratio (CRR)
Option 4: Statutory liquidity ratio (SLR)
Question : A recession is characterized by:
Option 1: High inflation and high unemployment
Option 2: Low inflation and high unemployment
Option 3: High inflation and low unemployment
Option 4: Low inflation and low unemployment
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