Question
Economics Question on Money and Banking
Arrange the following in sequence for the impact on economy when central bank raises Repo rate :
A. People will take less loan.
B. Money supply will decrease in economy.
C. Borrowing become costlier.
D. Commercial banks will increase interest rate.
E. Aggregrate demand will decrease.
Choose the correct answer from the options given below :
A
D, B, C, A, E
B
D, C, B, A, E
C
D, C, A, B, E
D
E, A, B, C, D
Answer
D, C, A, B, E
Explanation
Solution
The correct option is (C) :D, C, A, B, E.