SSC Economics Sample Paper NCERT Sample Paper-6

  • question_answer
    To combat raising inflation, RBI has to do which of the following activities?

    A)  Increase bank rate

    B)        Sell government securities

    C)  Increase reserve ratios 

    D)  All of above

    Correct Answer: D

    Solution :

    [d] To combat from inflation, RBI has to sell government securities, increase bank rate, increase policy rate, etc. so that banks have left less money to lend then people borrow less, demand goes down and the result of it is the prices of goods and services also goes down. This is how, RBI decreases the inflation rate.

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