Which of the following factors led to a decline in inflation rate in India during 2014-2015? 1. Persistent decline in crude oil prices 2. Softness in global prices of tradables such as edible oils and coal 3. Tight monetary policy pursued by the Reserve B

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Q: 92 (CDS-II/2015)

Which of the following factors led to a decline in inflation rate in India during 2014-2015?
1. Persistent decline in crude oil prices
2. Softness in global prices of tradables such as edible oils and coal
3. Tight monetary policy pursued by the Reserve Bank of India
Select the correct answer using the code given below.

question_subject: 

Economics

question_exam: 

CDS-II

stats: 

0,52,24,7,11,6,52

keywords: 

{'inflation rate': [0, 0, 0, 3], 'tight monetary policy': [0, 0, 0, 2], 'persistent decline': [0, 0, 0, 1], 'factors': [0, 0, 1, 0], 'crude oil prices': [0, 0, 0, 3], 'decline': [1, 0, 4, 11], 'india': [8, 1, 7, 13], 'global prices': [0, 0, 0, 1], 'reserve bank': [1, 0, 3, 4]}

The correct answer is option 4, which states that factors 1, 2, and 3 all contributed to the decline in inflation rate in India during 2014-2015.

Factor 1 is the persistent decline in crude oil prices. This means that the cost of crude oil, which is a significant determinant of fuel prices, decreased during this period. As fuel prices went down, it had a cascading effect on other sectors of the economy, leading to a decline in inflation.

Factor 2 is the softness in global prices of tradables such as edible oils and coal. The term "tradables" refers to goods that can be traded internationally. When the global prices of these goods go down, it benefits the Indian economy as it becomes cheaper to import them. This reduction in the cost of tradables also contributes to the decline in inflation.

Factor 3 is the tight monetary policy pursued by the Reserve Bank of India. A tight monetary policy involves measures such as increasing interest rates or reducing the money supply. These actions aim to curb inflationary pressures in the economy. By implementing a tight monetary policy, the Reserve Bank of India helped in reducing the inflation rate during 2014-2015.

It is important to note that all three factors played a

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