UPSC 2022 › Indian Economy › Monetary Policy & Money Supply

2 questions · 2022 · answers as per the UPSC key

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UPSC 2022 · Q3 · Indian Economy › Monetary Policy & Money Supply · Save

With reference to the Indian economy, consider the following statements :

  1. If the inflation is too high, Reserve Bank of India (RBI) is likely to buy government securities.
  2. If the rupee is rapidly depreciating, RBI is likely to sell dollars in the market.
  3. If interest rates in the USA or European Union were to fall, that is likely to induce RBI to buy dollars.

Which of the statements given above are correct ?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
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Answer: (b) 2 and 3 only
UPSC 2022 · Q68 · Indian Economy › Monetary Policy & Money Supply · Save

In India, which one of the following is responsible for maintaining price stability by controlling inflation ?

(a) Department of Consumer Affairs
(b) Expenditure Management Commission
(c) Financial Stability and Development Council
(d) Reserve Bank of India
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Answer: (d) Reserve Bank of India