Question

What will be the impact of reduction in Repo Rate in the economy?

(a) Fall in aggregate demand (b) Rise in aggregate demand (C) Rise in general price level (d) No change in aggregate demand​

Answer 1

Answer:

The decrease in repo rates is to aim at bringing in growth and improving economic development in the country. Consumers will borrow more from banks thus stabilizing the inflation. A decline in the repo rate can lead to the banks bringing down their lending rate.

Answer 2

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The decrease in repo rates is to aim at bringing in growth and improving economic development in the country. Consumers will borrow more from banks thus stabilizing the inflation. A decline in the repo rate can lead to the banks bringing down their lending rate.

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