Ayushi Asked a Question
August 12, 2020 2:08 pmpts 30 pts
47. Which of the following willlower inflationary expectations? (1) The governments armouncement that it wil increase spending on intra structure (2) The RBI's ennouncement that it will steadily raise the funds rate (3) An increase in the valuo of stocks (4) An increase in the money Supply (3) Rds 48. Ifthe cconony is operatisg at potential.cDP, an.increase in the money supply will lead to (1) Stagflation (2) Struchural inflation (3) Denmand-Side imiation 4) Supply-side inflaion
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  • Nidhi taparia Best Answer
    47. The correct answer is (2). When funds rates or in simple terms interest rates rise, it becomes dearer to lend. This brings inflation down. So when RBI announces it will raise ...
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