Multiple choice general knowledge

The Reserve Bank of India keeps on changing various ratio/rates frequently. Why this is done? (1) To keep inflation under control. (2) To ensure that Indian Rupee does not loose its market value. (3) To ensure that Banks do not earn huge profits at the cost of public money.

  1. Only 1

  2. Only 2

  3. Only 3

  4. All 1, 2 and 3
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

RBI changes ratios (CRR, SLR, repo rate) to: (1) control inflation by tightening/loosening money supply, (2) maintain rupee value by managing capital flows, and (3) prevent banks from exploiting rate differentials for excessive profits.

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