Question
During period of inflation, rates should
Answer: Option B
Answer: (b)
During inflation interest rates should increase so that the investor invests more in lieu of higher interest-earning thus money supply reduces which can reduce inflation.
Similarly higher interest rates mean credit becomes costly so that again supply of money reduces which helps in curbing inflation.
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Answer: (b)
During inflation interest rates should increase so that the investor invests more in lieu of higher interest-earning thus money supply reduces which can reduce inflation.
Similarly higher interest rates mean credit becomes costly so that again supply of money reduces which helps in curbing inflation.
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