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Which of the following Monetary policy t...

Which of the following Monetary policy tools is used by RBI to control inflation ?

A

Fiscal Drag

B

Parsimoniousness Measures

C

Repo Rate

D

Fiscal Boost

Text Solution

Verified by Experts

The correct Answer is:
C
Repo rate is the rate at which RBI lends to its clients generally against government securities. Reduction in repo rate helps the commercial banks to get money at a cheaper rate and increase in repo rate discourages the commercial banks to get money as the rate increases and becomes expensive.
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