Ayushi Asked a Question
August 13, 2020 11:20 pmpts 30 pts
Ifthe Resèrve Bank of India lowers reserve requirements, which of the follow ing is most likely to happen to interest rates and nominal gross domestic product? 6. Nominal Gross Interest Rates (1) Increase Domestic Product Decrease (2) Increase Increase 3) Decrease Decrease (4) Decrease Increase
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  • Nidhi taparia Best Answer
    option (4) is correct. RBI reduces reserve requirement > banks have more to lend > money supply increases > interest rate falls > investment increases > GDP rises.
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