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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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Directions:Read the following paragraph and answer the question:In the...
Answer:
Introduction:
The given paragraph talks about the Monetary Policy announced for the year 2006-07 and the decisions taken regarding various rates. It also mentions that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged.
What is Bank Rate and Cash Reserve Ratio (CRR)?
- Bank Rate is the interest rate at which the RBI lends money to commercial banks.
- Cash Reserve Ratio (CRR) is the percentage of total deposits that banks have to keep with the RBI as a reserve.
What can RBI do to control credit in the economy?
- RBI can increase Bank Rate: By increasing the Bank Rate, RBI can make borrowing from it more expensive for commercial banks. This, in turn, will lead to an increase in the interest rates charged by commercial banks on loans to customers. This will make borrowing expensive for customers and reduce the demand for credit, leading to a decrease in the credit flow in the economy.
- RBI can increase CRR: By increasing CRR, RBI can reduce the amount of money available with commercial banks for lending. Banks will have to keep a higher percentage of their deposits with the RBI, leading to a decrease in the money supply in the economy. This will make borrowing expensive for customers and reduce the demand for credit, leading to a decrease in the credit flow in the economy.
Conclusion:
In the given paragraph, it is stated that Bank Rate and CRR have been kept unchanged. If RBI wants to control credit in the economy, it can increase Bank Rate and increase CRR. Hence, option 'B' is the correct answer.
Introduction:
The given paragraph talks about the Monetary Policy announced for the year 2006-07 and the decisions taken regarding various rates. It also mentions that Bank Rate and Cash Reserve Ratio (CRR) have been kept unchanged.
What is Bank Rate and Cash Reserve Ratio (CRR)?
- Bank Rate is the interest rate at which the RBI lends money to commercial banks.
- Cash Reserve Ratio (CRR) is the percentage of total deposits that banks have to keep with the RBI as a reserve.
What can RBI do to control credit in the economy?
- RBI can increase Bank Rate: By increasing the Bank Rate, RBI can make borrowing from it more expensive for commercial banks. This, in turn, will lead to an increase in the interest rates charged by commercial banks on loans to customers. This will make borrowing expensive for customers and reduce the demand for credit, leading to a decrease in the credit flow in the economy.
- RBI can increase CRR: By increasing CRR, RBI can reduce the amount of money available with commercial banks for lending. Banks will have to keep a higher percentage of their deposits with the RBI, leading to a decrease in the money supply in the economy. This will make borrowing expensive for customers and reduce the demand for credit, leading to a decrease in the credit flow in the economy.
Conclusion:
In the given paragraph, it is stated that Bank Rate and CRR have been kept unchanged. If RBI wants to control credit in the economy, it can increase Bank Rate and increase CRR. Hence, option 'B' is the correct answer.
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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?
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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? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 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? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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?.
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? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 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? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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?.
Solutions for 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? in English & in Hindi are available as part of our courses for CA Foundation.
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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?, a detailed solution for 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? has been provided alongside types 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? theory, EduRev gives you an
ample number of questions to practice 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? tests, examples and also practice CA Foundation tests.
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