Question
Which of the following steps that will result in containing inflation?
Select the correct answer using the codes given below:
- Increasing Cash Reserve Ratio (CRR)
- Decreasing Statutory Liquidity Ratio (SLR)
- Permitting Central/State agencies to import duty free pulses and sugar.
Select the correct answer using the codes given below:
Answer: Option C
Answer: (c)
In order to curb inflation if CRR is increased, then it may take liquidity from markets as banks will have to deposit more money with RBI.
Moreover, inflation may also be curbed by Permitting Central/State agencies to import duty-free pulses and sugar.
However, Decreasing SLR will leave more money to banks to give loans, which in turn will lead to inflation.
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Answer: (c)
In order to curb inflation if CRR is increased, then it may take liquidity from markets as banks will have to deposit more money with RBI.
Moreover, inflation may also be curbed by Permitting Central/State agencies to import duty-free pulses and sugar.
However, Decreasing SLR will leave more money to banks to give loans, which in turn will lead to inflation.
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