Q: (IAS/2020)
question_subject:
Economics
question_exam:
IAS
stats:
0,100,147,21,100,95,31
keywords:
{'expansionist monetary policy': [0, 0, 0, 1], 'statutory liquidity ratio': [0, 0, 1, 0], 'rbi': [1, 4, 2, 23], 'bank rate': [0, 1, 1, 2], 'marginal standing facility rate': [0, 0, 0, 1], 'repo rate': [0, 0, 1, 1]}
The correct answer is b.
If the RBI decides to adopt an expansionist monetary policy, it would not increase the Marginal Standing Facility Rate as it is a tool used by the RBI for controlling short-term credit. An expansionist monetary policy aims to boost economic growth by increasing liquidity in the system, which is done by cutting the Bank Rate and Repo Rate, and optimizing the Statutory Liquidity Ratio.