Q23
In order to control credit, Reserve Bank of India should
A.
Increase CRR and decrease Bank rate
B.
Decrease CRR and reduce Bank rate
C.
Increase CRR and increase Bank rate
AnswerD.
Reduce CRR and increase Bank rate
Answer: Option C
Solution
Answer: Option C
Solution:
In order to control credit, Reserve Bank of India should Increase CRR and increase Bank rate. During high inflation in the economy, RBI raises the CRR to lower the bank's loanable funds.