Economy, asked by muzamilshabir962, 9 months ago

5: Liquidity preference theory 6 points
of Keynes indicates Keynesian
support to fiscal policy as
against Monetary policy.
Explain with valid arguments.
Your answer​

Answers

Answered by niranjan1739
1

Explanation:

Definition: Reverse repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) borrows money from commercial banks within the country. It is a monetary policy instrument which can be used to control the money supply in the country.

Description: An increase in the reverse repo rate will decrease the money supply and vice-versa, other things remaining constant. An increase in reverse repo rate means that commercial banks will get more incentives to park their funds with the RBI, thereby decreasing the supply of money in the market.

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