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Shyam KoppoJu

· started a discussion

· 1 Months ago

What are the Cheap money Policies??? (Question: 110974.0 )

List a few to get an idea, please
Tq

Question:

Properties of a Cheap Money policy are:- 


(1) Increasing SLR

(2) Selling G-Sec

(3) Increasing CRR

Options:
A) Only 1 & 2
B) Only 2 & 3
C) Only 2
D) Only 1 & 3
E) None of these
Solution:
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.

Knowledge Expert

· commented

· 1 Months ago

Cheap Money Policy is a monetary policy that increases the money supply usually by lowering interest rates. It occurs when a country's central bank decides to allow new cash flows into the banking system. Since interest rates are lower, it is easier for banks and lenders to loan money, thus leading to increased economic growth.
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