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In the context of the Reserve Bank of India’s (RBI) monetary policy operations, a sustained period of increasing Repo Rate is generally expected to have which of the following effects on the Indian economy? (i) Dampen demand-pull inflation by increasing the cost of borrowing and investment. (ii) Reduce the net interest margin (NIM) of commercial banks that rely heavily on deposits for funding. (iii) Lead to an appreciation of the Indian Rupee against major global currencies. (iv) Encourage a shift in household savings from market-linked instruments to bank fixed deposits. Select the correct answer using the code given below:
Correct Answer: (c)
Official keyThis question appeared in the MZPSC Prelims 2025 examination (GS). It is Question 58 out of 100 questions in this paper.
This question was part of the MZPSC Prelims 2025 (GS). The MZPSC Prelims examination tests candidates on general studies, current affairs, and aptitude through multiple-choice questions.
Practice previous year questions from all MZPSC Prelims papers and compare patterns with UPSC Prelims PYQ to identify overlapping topics.