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Explain the role of the following …

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Explain the role of the following in correcting inflationary gap in an economy (a) open market operation (b) bank rate

Posted by Satakshi Choubey 6 years, 10 months ago

CBSE > Class 12 > Economics

1 answers

Zeenat Anees 6 years, 10 months ago

Open market is the place where RBI sell its securities so at the time of inflationary gap the will sell more securities to soak the money from market and then inflatinary gap will decrease. And bank rate is the rate at with RBI give loan to commercial bank so if RBI with increase this rate bank will take less loan and they will give less credit to general people and inflatinary gap will decrease

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