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  • EEP-1 Question 1 - 21pgdm040

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    SAURAV KUMAR GUPTA
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    The document discusses monetary policy actions by the Reserve Bank of India (RBI). It explains that if RBI increases the repo rate: 1) Commercial banks will have to increase their lending rates, which will reduce lending in the economy and slow down inflation. 2) It will increase the interest rates on government securities, making them more attractive than other investments and reducing liquidity in the market. 3) As liquidity decreases and interest rates rise, output will fall which will help control inflation.

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    EEP-1 Question 1 -21pgdm040

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    The document discusses monetary policy actions by the Reserve Bank of India (RBI). It explains that if RBI increases the repo rate: 1) Commercial banks will have to increase their lending rates, which will reduce lending in the economy and slow down inflation. 2) It will increase the interest rates on government securities, making them more attractive than other investments and reducing liquidity in the market. 3) As liquidity decreases and interest rates rise, output will fall which will help control inflation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    8 views5 pages

    EEP-1 Question 1 - 21pgdm040

    Uploaded by

    SAURAV KUMAR GUPTA
    The document discusses monetary policy actions by the Reserve Bank of India (RBI). It explains that if RBI increases the repo rate: 1) Commercial banks will have to increase their lending rates, which will reduce lending in the economy and slow down inflation. 2) It will increase the interest rates on government securities, making them more attractive than other investments and reducing liquidity in the market. 3) As liquidity decreases and interest rates rise, output will fall which will help control inflation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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