Question

explain the meaning cheap money policy and dear money policy​

Answer 1

★Dear money policy★

Dear money policy refers to a monetary policy by the central bank where the central bank sets high interest rates so that credit is not easily available to the general public in order to decrease the real income and hence purchasing power of the people.

★Cheap money policy★

Cheap money policy is that monetary policy of the RBI in which loans and advances are made available on low interest rate and on easy terms. Reducing the CRR and Bank Rate are the main part of the cheap money policy.

Answer 2

$\LARGE{\tt{\underline{\underline{\ Answer:-}}}}$

${\star \tt{\underline{\underline{\ Cheap \ Money \ Policy \ :-}}}}$

A monetary policy in which a central bank sets low interest rates so that credit is easily attainable. This makes borrowing easy for business, which stimulates investment and expansion of operations. 

${\star \tt{\underline{\underline{\ Dear \ Money \ Policy \ :-}}}}$

It is restricting the volume of credit available in the economy coupled with increasing the rate of interest. Increasing the CRR and Bank rate are the main components of dear money policy. The objective of dear money policy is to counter inflation.