The Central Bank of a country is responsible for money supply in the economy. In this context, consider the following statements:
1. A Central Bank adopts cheap money policy in order to reduce inflation in the economy.
2. A dear money policy is often adopted in order to revive growth in the economy.
Which of the statements given above is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
• Cheap money policy implies that the Central Bank eases the rates at which credit is available. This is often done in order to spur growth in the economy.
• Dear money policy implies that the Central Bank is raising the interest rates. This is in order to mop up excess money in the market and, thus, to tackle inflation.
The term 'West Texas Intermediate', sometimes found in news, refers to a grade of
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