Question:
Read the following statements carefully :
Statement 1: The government may reduce the repo rate, to control deflationary gap prevailing in the economy.
Statement 2: The government may reduce the deflationary gap, by selling off government securities (G-Sec) in the open market.
In the light of the given statements, choose the correct option from the following :
Read the following statements carefully :
Statement 1: The government may reduce the repo rate, to control deflationary gap prevailing in the economy.
Statement 2: The government may reduce the deflationary gap, by selling off government securities (G-Sec) in the open market.
In the light of the given statements, choose the correct option from the following :
Statement 1: The government may reduce the repo rate, to control deflationary gap prevailing in the economy.
Statement 2: The government may reduce the deflationary gap, by selling off government securities (G-Sec) in the open market.
In the light of the given statements, choose the correct option from the following :
Show Hint
To combat a deflationary gap, the central bank can lower the repo rate and perform open market operations such as selling government securities to control the money supply.
Updated On: Jul 1, 2025
- Statement 1 is true and Statement 2 is false.
- Statement 1 is false and Statement 2 is true.
- Both Statements 1 and 2 are true.
- Both Statements 1 and 2 are false.
Hide Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
Statement 1 is true because reducing the repo rate helps in controlling the deflationary gap by encouraging borrowing and spending in the economy.
Statement 2 is also true because selling government securities in the open market is an open market operation that can help reduce the deflationary gap by reducing the money supply.
Statement 2 is also true because selling government securities in the open market is an open market operation that can help reduce the deflationary gap by reducing the money supply.
Was this answer helpful?
0
0
Top Questions on Government Budget and the Economy
- "Taxation is an effective tool to reduce the inequalities of income." Justify the given statement with valid reasons.
- CBSE CLASS XII - 2025
- Economics
- Government Budget and the Economy
- The main objective of measuring the primary deficit is to highlight present ___________.
(Choose the correct option to fill in the blank)- CBSE CLASS XII - 2025
- Economics
- Government Budget and the Economy
- Read the following statements – Assertion (A) and Reason (R). Choose the correct alternative from the options given below:
Assertion (A): Direct taxes are imposed on income/profits of individuals/companies.
Reason (R): The burden of payment of direct taxes cannot be shifted to any other entity.- CBSE CLASS XII - 2025
- Economics
- Government Budget and the Economy
- Read the following statements carefully :
Statement 1: Public goods are those goods for which the payments are made by all the entities in the country.
Statement 2: Private goods are those goods which are provided by the government of a country at subsidised rates.
In the light of the given statements, choose the correct option from the following :- CBSE CLASS XII - 2025
- Economics
- Government Budget and the Economy
- "As per the Economic Survey of India 2022 – 23, due to the outbreak of geopolitical conflict, the result was higher international prices for fertilizer and fuel. Thus, there was a higher fuel and fertilizer subsidy requirement for supporting the people."
On the basis of the given text, identify and explain the indicated objective of the government budget.- CBSE CLASS XII - 2025
- Economics
- Government Budget and the Economy
View More Questions
Questions Asked in CBSE CLASS XII exam
- What type of cell is mercury cell? Why is it more advantageous than dry cell?
- CBSE CLASS XII - 2025
- CBSE Compartment XII - 2025
- Electrochemistry
A compound (A) with molecular formula $C_4H_9I$ which is a primary alkyl halide, reacts with alcoholic KOH to give compound (B). Compound (B) reacts with HI to give (C) which is an isomer of (A). When (A) reacts with Na metal in the presence of dry ether, it gives a compound (D), C8H18, which is different from the compound formed when n-butyl iodide reacts with sodium. Write the structures of A, (B), (C) and (D) when (A) reacts with alcoholic KOH.
- CBSE CLASS XII - 2025
- Haloalkanes And Haloarenes
- State Faraday’s second law of electrolysis. How much electricity is required in terms of Faraday for the reduction of 1 mole of $Cr_2\text{O}_7^{2-} \text{ to Cr}^{3+}$?
- CBSE CLASS XII - 2025
- Electrochemistry
- Calculate the \(\Delta G\) of the following cell:
\[ \text{Mg}(s) | \text{Mg}^{2+} (aq) || \text{Cu}^{2+} (aq) | \text{Cu}(s) \] \[ \left[ E^\circ_{\text{Mg}^{2+}/\text{Mg}} = -2.37 \, \text{V}, E^\circ_{\text{Cu}^{2+}/\text{Cu}} = +0.34 \, \text{V}, F = 96500 \, \text{C mol}^{-1} \right] \]- CBSE CLASS XII - 2025
- Electrochemistry
- Calculate the emf of the following cell at 25°C : \[ \text{Zn(s)} | \text{Zn}^{2+} (0.1 \, \text{M}) \parallel \text{H}^+ (0.01 \, \text{M}) | \text{Hg}(l) | \text{Hg}_2^{2+} (1 \, \text{bar}), \, \text{Pt(s)} \] \[ \left[ E^\circ_{\text{Zn}^{2+}/\text{Zn}} = -0.76 \, \text{V}, \, E^\circ_{\text{H}_2/\text{H}^+} = 0.00 \, \text{V}, \, \log 10 = 1 \right] \]
- CBSE CLASS XII - 2025
- Electrochemistry
View More Questions