UPSC Economics Business and Foreign Trade / व्यापार और विदेश व्यापार Question Bank Fiscal and Monetary Policy

  • question_answer
          When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?                                                                                                                [IAS Prelims 2015]

    A) India?s GDP growth rate increases drastically

    B) Foreign Institutional Investors may bring more capital into our country

    C) Scheduled Commercial Banks may cut their lending rates

    D) It may drastically reduce the liquidity to the banking system

    Correct Answer: C

    Solution :

    When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points; the Scheduled Commercial Banks may cut their lending rates.


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