Question:
When economists refer to "tight" monetary policy, they mean that the Reserve Bank of India is taking actions that will:
When economists refer to "tight" monetary policy, they mean that the Reserve Bank of India is taking actions that will:
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A tight monetary policy is typically used to prevent an overheating economy and control inflation.
Updated On: Mar 25, 2025
- Increases the demand for money
- Decreases the demand for money
- Expand the supply of money
- Contract the supply of money
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The Correct Option is D
Solution and Explanation
A "tight" monetary policy means reducing the money supply, which raises interest rates and reduces the demand for borrowing, thus helping to control inflation.
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