A. Policies that keep interest rates artificially low and channel credit to preferred borrowers, often the government
B. Complete liberalisation of interest rates
C. Only the absence of any credit controls
D. Only high real interest rates
Answer: Option A
Solution (By JKSSB Mock Tests)
Financial repression encompasses a set of policies—interest-rate ceilings, high reserve requirements, directed credit and capital controls—that hold real interest rates low and facilitate cheap financing of the government.
Explanation:
The semi-strong form of the efficient market hypothesis asserts that stock prices adjust rapidly to all publicly available information, so that neither technical nor fundamental analysis can yield abnormal returns.
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