Money MarketMCQPYQ - May 2019 (Inter)Question 143 of 22

Repo Rate is the rate at which:

Select Your Answer (Keyboard: A, B, C, D)

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Correct Answer

✅ Option a — RBI lends to banks

All Options:

ARBI lends to banks
BBanks lend to RBI
CBanks lend to customers
DRBI lends to Government

Detailed Solution & Explanation

PYQ - May 2019 (Inter)

About This Chapter: Money Market

Paper

Paper 4: Business Economics

Weightage

10%

Key Topics

Money Demand/Supply, Monetary Policy

This chapter covers the monetary system — how money circulates in the economy. Topics include Demand for Money, Supply of Money, Monetary Policy instruments (Repo Rate, CRR, SLR, Open Market Operations), and the role of the Reserve Bank of India in controlling inflation and managing the economy.

View Official ICAI Syllabus

Exam Strategy Tip

Memorize the RBI's monetary policy instruments and their impacts. Questions often ask about the effect of changing CRR or Repo Rate on money supply.

Key Concepts to Understand

Repo Rate

The rate at which the Reserve Bank of India (RBI) lends short-term funds to commercial banks against government securities. An increase in Repo Rate makes borrowing costlier for banks, reducing money supply and inflation; a decrease stimulates borrowing and growth.

Related Comparison Tables

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