Loading...
UPSC 2014: If the interest rate is decreased in an economy, it will
(a)decrease the consumption expenditure in the economy
(b)increase the tax collection of the Government
(c)increase the investment expenditure in the economy
(d)increase the total savings in the economy
Attempt This Question
Not attemptedCorrect Answer: (c) increase the investment expenditure in the economy
A fall in the policy/market interest rate lowers the cost of borrowing, making more investment projects profitable and thus raising aggregate investment expenditure. It does not automatically raise tax collections or savings, and consumption usually rises, not falls. ([upscprep.com](https://www.upscprep.com/untitled-2/?utm_source=openai))
Related Current Affairs
Related UPSC Questions
Frequently Asked Questions
What is the correct answer to this UPSC 2014 Indian Economy question?▼
The correct answer is option (c): increase the investment expenditure in the economy. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Money & Banking / Monetary Policy question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2014, GS Paper 1, as Question 61. It falls under Indian Economy > Money & Banking / Monetary Policy.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Money & Banking / Monetary Policy?▼
UPSC has asked 1 questions from Money & Banking / Monetary Policy (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.