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What is the primary reason behind the seasonality of the Indian money market?
- a)Agricultural activities
- b)Stock market fluctuations
- c)Government policies
- d)Foreign exchange rates
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
What is the primary reason behind the seasonality of the Indian money ...
The Indian money market experiences seasonality due to its agricultural-based economy, with higher demand for funds during busy agricultural seasons.
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What is the primary reason behind the seasonality of the Indian money ...
The primary reason behind the seasonality of the Indian money market is **agricultural activities**.
**Agricultural Activities**
- India is primarily an agrarian economy, with a significant portion of its population engaged in agricultural activities.
- The demand for credit in rural areas tends to increase during the sowing and harvesting seasons when farmers require funds to purchase seeds, fertilizers, and other inputs.
- This increased demand for credit leads to a rise in interest rates in the money market during these periods.
- On the other hand, post-harvest seasons see a decrease in the demand for credit, resulting in a decrease in interest rates.
- The fluctuations in the demand for credit due to agricultural activities create seasonality in the Indian money market.
In conclusion, the seasonality of the Indian money market is primarily driven by the fluctuations in demand for credit arising from agricultural activities. Understanding this relationship is crucial for policymakers and market participants to anticipate and navigate the seasonal variations in interest rates and liquidity in the money market.
**Agricultural Activities**
- India is primarily an agrarian economy, with a significant portion of its population engaged in agricultural activities.
- The demand for credit in rural areas tends to increase during the sowing and harvesting seasons when farmers require funds to purchase seeds, fertilizers, and other inputs.
- This increased demand for credit leads to a rise in interest rates in the money market during these periods.
- On the other hand, post-harvest seasons see a decrease in the demand for credit, resulting in a decrease in interest rates.
- The fluctuations in the demand for credit due to agricultural activities create seasonality in the Indian money market.
In conclusion, the seasonality of the Indian money market is primarily driven by the fluctuations in demand for credit arising from agricultural activities. Understanding this relationship is crucial for policymakers and market participants to anticipate and navigate the seasonal variations in interest rates and liquidity in the money market.
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What is the primary reason behind the seasonality of the Indian money market?a)Agricultural activitiesb)Stock market fluctuationsc)Government policiesd)Foreign exchange ratesCorrect answer is option 'A'. Can you explain this answer?
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What is the primary reason behind the seasonality of the Indian money market?a)Agricultural activitiesb)Stock market fluctuationsc)Government policiesd)Foreign exchange ratesCorrect answer is option 'A'. Can you explain this answer? for B Com 2025 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the primary reason behind the seasonality of the Indian money market?a)Agricultural activitiesb)Stock market fluctuationsc)Government policiesd)Foreign exchange ratesCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the primary reason behind the seasonality of the Indian money market?a)Agricultural activitiesb)Stock market fluctuationsc)Government policiesd)Foreign exchange ratesCorrect answer is option 'A'. Can you explain this answer?.
What is the primary reason behind the seasonality of the Indian money market?a)Agricultural activitiesb)Stock market fluctuationsc)Government policiesd)Foreign exchange ratesCorrect answer is option 'A'. Can you explain this answer? for B Com 2025 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the primary reason behind the seasonality of the Indian money market?a)Agricultural activitiesb)Stock market fluctuationsc)Government policiesd)Foreign exchange ratesCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the primary reason behind the seasonality of the Indian money market?a)Agricultural activitiesb)Stock market fluctuationsc)Government policiesd)Foreign exchange ratesCorrect answer is option 'A'. Can you explain this answer?.
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