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UPSC 2007: Consider the following statements: 1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India. 2. A value of 1 for the Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population. Which of the statements given above is/are correct?
(a)1 only
(b)2 only
(c)Both 1 and 2
(d)Neither 1 nor 2
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Not attemptedCorrect Answer: (a) 1 only
1. The repo rate is defined by the RBI as the rate at which it lends short-term funds to commercial banks, i.e., banks borrow from the RBI at this rate—so Statement 1 is correct. ([en.wikipedia.org](https://en.wikipedia.org/wiki/Reserve_Bank_of_India)) 2. The Gini coefficient ranges from 0 (perfect equality) to 1 (perfect inequality); therefore a value of 1 denotes complete inequality, not equality—so Statement 2 is wrong. ([en.wikipedia.org](https://en.wikipedia.org/wiki/Gini_coefficient)) Hence only Statement 1 is correct.
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Frequently Asked Questions
What is the correct answer to this UPSC 2007 Indian Economy question?▼
The correct answer is option (a): 1 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Monetary Policy & Money Supply question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2007, GS Paper 1, as Question 98. It falls under Indian Economy > Monetary Policy & Money Supply.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from Monetary Policy & Money Supply?▼
UPSC has asked 27 questions from Monetary Policy & Money Supply (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.