question_answer

As reported in the newspapers, China has asked its banks to put 12.5% money instead of earlier 12% as CRR. This correction in CRR has been made for the seventh time in past one year. Why did China have to take this step again and again and so frequently?                      [OBC 2008]

[a] It will put a curb on lending of money by the banks.

[b] It will help Govt of China to tame the rate of inflation.

[c] It will help the poor to get easy loans at cheaper rates from the banks as higher CRR brings more money for activities of the social sector.

A)  Only [a] is correct

B)  Only [b] is correct

C)  All [a], [b] and [c] are correct

D)  Only [c] is correct

E)  Both [a] and [b] are correct