A) It is a situation of High Inflation and Low real interest rates which deter the financial savings.
B) It is a situation in which the inflation shocks effectively reduce the value of outstanding debt.
C) It is a situation where a state is indirectly encouraging people to purchase gold, real estate and overseas assets.
D) It is a situation where a low and stable inflation rate helps maintain the value of the currency, both domestically and externally.
Correct Answer: C
Solution :
[c] Financial repression signifies measures sometimes used by governments to boost their coffers and/or reduce debt. These measures include the deliberate attempt to hold down interest rates to below inflation, representing a tax on savers and a transfer of benefits from lenders to borrowers.
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