Multiple choice

Monetary policy transmission involves the following: Read the following statements and answers the correct ones. i. When Reserve Bank India (RBI) changes the policy rates, the commercial banks also must follow the RBI. ii. When Government’s Fiscal deficit changes , RBI should change its policy rates iii. When the rate of inflation on Consumer Price index changes, RBI should change the policy rates. iv. When financial Savings in India increase or decrease, RBI should change its policy rates.

  1. i & ii only

  2. i only

  3. ii only

  4. iii & iv only

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 (b)