Question

14. An increase in repo rate by
RBI acts as a
for
commercial banks. *
O Incentives
O Disincentives
o
Decrease
O
Stability​

Answer 1

Answer:

b) Disincentives

Explanation:

In the event of inflation, central banks increase repo rate as this acts as a disincentive for banks to borrow from the central bank. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.