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प्रश्न
Explain the role of Repo Rate in reducing the Inflationary gap.
उत्तर
Because of an inflationary gap, the repo rate will be increased by the central bank and it will increase the cost of borrowings for the commercial bank. This leads to a decline in the demand for loans and consumption expenditure. Thus, the aggregate demand comes down nd the economy attains equilibrium.
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संबंधित प्रश्न
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| Group A | Group B | ||
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| 4) | A.P.C. | d) | ΔC/ΔY |
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| f) | Addition to stock of capital | ||
| g) | Destruction of utility | ||
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