Which of the following is NOT a function of the Reserve Bank of India?
A. Issuing currency notes
B. Controlling credit
C. Acting as banker to the government
D. Formulating fiscal policy
Answer: Option D
Solution (By JKSSB Mock Tests)
Fiscal policy is formulated by the government (Ministry of Finance). RBI is responsible for monetary policy, currency issue, banker to government and credit control.
Explanation:
Under a flexible exchange rate system, the exchange rate adjusts automatically to equilibrate the demand and supply of foreign exchange, helping to correct balance of payments imbalances.
Explanation:
Necessities like salt have inelastic demand because quantity demanded does not change significantly with price changes. Luxuries tend to have elastic demand.
Explanation:
Reference-dependent preferences, central to prospect theory, evaluate outcomes as gains or losses relative to a reference point rather than in terms of final absolute wealth levels.
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