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The country has entered a major …

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The country has entered a major economic slowdown. A series of interest rate cut has failed to stop the decline. India already has real interest rate of negative 2.2%, Lower than other developing Asian countries,suggesting that monetary policy isn't going to be the answer --The Eco. Times Q.Discuss the measure that govt. Of india must take to address the situation indicated in above news report ?

Posted by Diwakar Kumar Gautam Abc 4 years, 1 month ago

CBSE > Class 12 > Economics

1 answers

Mohd Muaz Malik 4 years, 1 month ago

Interest rate :- it's refer to a process of paying extra amount to lenders [Commercial banks, financial institutions]. For example Ram borrowing from SBI 5000 with 10% interest, if ram pay to SBI $5000+$500(for interest) = $5500. THIS CASE IN DISCUSS IN ABOVE NEWS REPORT, first and foremost thing is negative INTEREST RATE, BANKS AND FINANCIAL INSTITUTIONS POINT OF VIEW, for example RAM borro.. from SBI 5000 with interest rate 2.2% negative, if RAM pay to SBI $5000 - $110 = 4890, here we see SBI going in loss with $110, It's means RBI take fast action with deep study, and increase moderate INTEREST RATE, it's leads to grow banks and financial institutions which implies many creation.

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