In the present COVID-19 times, many economists have raised their concerns that Indian economy may have to face a deflationary situation
In the present COVID-19 times, many economists have raised their concerns that Indian economy may have to face a deflationary situation, due to reduced economic activities in the country. Suppose you are a member of the high powered committee constituted by the Reserve Bank of India (RBI). You have suggested that as the supervisor of commercial banks, ____ (restriction/release) of the money supply be ensured, by the Reserve Bank of India (RBI). (Choose the correct alternative)
[CBSE, Sample Paper 2021]
Anurag Pathak Changed status to publish December 24, 2023
In the present COVID-19 times, many economists have raised their concerns that Indian economy may have to face a deflationary situation, due to reduced economic activities in the country. Suppose you are a member of the high powered committee constituted by the Reserve Bank of India (RBI). You have suggested that as the supervisor of commercial banks, release (restriction/release) of the money supply be ensured, by the Reserve Bank of India (RBI). (Choose the correct alternative).
Explanation:-
Due to the Covid-19 restrictions, economic activities are stopped.
The people of the country do not have the flow of money to spend.
It halts the sale and purchase activity in the country and the Indian economy may have to face a deflationary situation.
In this case, the government should release the money supply in the form of free deposits in the accounts of poor people.
For example, during COVID-19, the government of India deposited ₹ 500 per month in the pradhanmantri zero balance account of females.
Anurag Pathak Changed status to publish December 24, 2023
