Discussion
Which of the following factors is/ are considered by the RBI to determine the number of notes to be issued by it ?
Answer: D
Correct answer: All of these
All three enter the estimate. Growth in GDP raises the volume of transactions and therefore the currency the public wants to hold; inflation raises the number of notes needed for the same real transactions; and reserve stock requirements cover the buffer held against seasonal peaks and the replacement of soiled notes.
The RBI estimates demand denomination by denomination and indents on the printing presses accordingly. Note that the quantity is demand-driven rather than a policy lever: currency in circulation responds to what the public withdraws, and monetary policy works through reserves and rates instead.
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development