Directions: Read the following paragraph and answer the question:
In the Monetary Policy announced for the year 2006-07 the following announcements have been made - Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio have been kept unchanged at their present levels of 6 per cent, 6.5 per cent, 5.5 per cent and 5 per cent respectively. These have been kept unchanged as liquidity pressure seen during the last 4 months of 2005-06 have eased off considerably.
In the given paragraph it is stated that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged. What can RBI do if it wants to control credit in the economy?
  • a)
    Decrease Bank Rate and decrease CRR
  • b)
    Increase Bank Rate and increase CRR
  • c)
    Increase Bank Rate and decrease CRR
  • d)
    Decrease Bank Rate and increase CRR
Correct answer is option 'B'. Can you explain this answer?

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This discussion on Directions:Read the following paragraph and answer the question:In the Monetary Policy announced for the year 2006-07 the following announcements have been made - Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio have been kept unchanged at their present levels of 6 per cent, 6.5 per cent, 5.5 per cent and 5 per cent respectively. These have been kept unchanged as liquidity pressure seen during the last 4 months of 2005-06 have eased off considerably.In the given paragraph it is stated that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged. What can RBI do if it wants to control credit in the economy?a)Decrease Bank Rate and decrease CRRb)Increase Bank Rate and increase CRRc)Increase Bank Rate and decrease CRRd)Decrease Bank Rate and increase CRRCorrect answer is option 'B'. Can you explain this answer? is done on EduRev Study Group by CA Foundation Students. The Questions and Answers of Directions:Read the following paragraph and answer the question:In the Monetary Policy announced for the year 2006-07 the following announcements have been made - Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio have been kept unchanged at their present levels of 6 per cent, 6.5 per cent, 5.5 per cent and 5 per cent respectively. These have been kept unchanged as liquidity pressure seen during the last 4 months of 2005-06 have eased off considerably.In the given paragraph it is stated that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged. What can RBI do if it wants to control credit in the economy?a)Decrease Bank Rate and decrease CRRb)Increase Bank Rate and increase CRRc)Increase Bank Rate and decrease CRRd)Decrease Bank Rate and increase CRRCorrect answer is option 'B'. Can you explain this answer? are solved by group of students and teacher of CA Foundation, which is also the largest student community of CA Foundation. If the answer is not available please wait for a while and a community member will probably answer this soon. You can study other questions, MCQs, videos and tests for CA Foundation on EduRev and even discuss your questions like Directions:Read the following paragraph and answer the question:In the Monetary Policy announced for the year 2006-07 the following announcements have been made - Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio have been kept unchanged at their present levels of 6 per cent, 6.5 per cent, 5.5 per cent and 5 per cent respectively. These have been kept unchanged as liquidity pressure seen during the last 4 months of 2005-06 have eased off considerably.In the given paragraph it is stated that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged. What can RBI do if it wants to control credit in the economy?a)Decrease Bank Rate and decrease CRRb)Increase Bank Rate and increase CRRc)Increase Bank Rate and decrease CRRd)Decrease Bank Rate and increase CRRCorrect answer is option 'B'. Can you explain this answer? over here on EduRev! Apart from being the largest CA Foundation community, EduRev has the largest solved Question bank for CA Foundation.
This discussion on Directions:Read the following paragraph and answer the question:In the Monetary Policy announced for the year 2006-07 the following announcements have been made - Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio have been kept unchanged at their present levels of 6 per cent, 6.5 per cent, 5.5 per cent and 5 per cent respectively. These have been kept unchanged as liquidity pressure seen during the last 4 months of 2005-06 have eased off considerably.In the given paragraph it is stated that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged. What can RBI do if it wants to control credit in the economy?a)Decrease Bank Rate and decrease CRRb)Increase Bank Rate and increase CRRc)Increase Bank Rate and decrease CRRd)Decrease Bank Rate and increase CRRCorrect answer is option 'B'. Can you explain this answer? is done on EduRev Study Group by CA Foundation Students. The Questions and Answers of Directions:Read the following paragraph and answer the question:In the Monetary Policy announced for the year 2006-07 the following announcements have been made - Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio have been kept unchanged at their present levels of 6 per cent, 6.5 per cent, 5.5 per cent and 5 per cent respectively. These have been kept unchanged as liquidity pressure seen during the last 4 months of 2005-06 have eased off considerably.In the given paragraph it is stated that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged. What can RBI do if it wants to control credit in the economy?a)Decrease Bank Rate and decrease CRRb)Increase Bank Rate and increase CRRc)Increase Bank Rate and decrease CRRd)Decrease Bank Rate and increase CRRCorrect answer is option 'B'. Can you explain this answer? are solved by group of students and teacher of CA Foundation, which is also the largest student community of CA Foundation. If the answer is not available please wait for a while and a community member will probably answer this soon. You can study other questions, MCQs, videos and tests for CA Foundation on EduRev and even discuss your questions like Directions:Read the following paragraph and answer the question:In the Monetary Policy announced for the year 2006-07 the following announcements have been made - Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio have been kept unchanged at their present levels of 6 per cent, 6.5 per cent, 5.5 per cent and 5 per cent respectively. These have been kept unchanged as liquidity pressure seen during the last 4 months of 2005-06 have eased off considerably.In the given paragraph it is stated that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged. What can RBI do if it wants to control credit in the economy?a)Decrease Bank Rate and decrease CRRb)Increase Bank Rate and increase CRRc)Increase Bank Rate and decrease CRRd)Decrease Bank Rate and increase CRRCorrect answer is option 'B'. Can you explain this answer? over here on EduRev! Apart from being the largest CA Foundation community, EduRev has the largest solved Question bank for CA Foundation.