Assertion (A): Reserve Bank of India (RBI) has the power to influence money supply in the economy.
Assertion (A): Reserve Bank of India (RBI) has the power to influence money supply in the economy.
Reason (R): RBI has the responsibility of managing the public debt.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
Anurag Pathak Changed status to publish January 5, 2024
Ans – (b)
Assertion (A) is correct as the Reserve Bank of India has the power to influence the money supply in the economy with the help of different monetary policies.
Reason (R) is also correct as RBI is the banker of the government and thus it manages the public debt.
Public debt is the total amount, including total liabilities borrowed by the government to meet its expenses.
As RBI is the Banker to the government. It manages all government financial matters.
But Reason (R) does not explain how RBI has the power to influence the money supply in the economy.
Anurag Pathak Changed status to publish January 5, 2024
