Consider the following statements: 1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India. 2. A value of 1 for Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population. Which of the statements given above is/are correct?

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YESPYQ · Accepted Answer

Correct answer: 1 only. Statement 1 is correct : The repo rate is the rate at which commercial banks borrow money from the Reserve Bank of India (RBI) to meet their short-term liquidity needs. It is a key monetary policy tool used to control inflation and sta- bilize the economy. If RBI increases the repo rate, borrowing be- comes more expensive, reducing liquidity in the market, which helps in controlling inflation. If RBI decreases the repo rate, borrowing becomes cheaper, in- creasing liquidity and boosting economic activity. Statement 2 is incorrect : The Gini coefficient is a measure of income inequality within a population. It ranges from 0 to 1. A higher Gini coefficient signifies greater inequality, and a lower value indicates a more equal distribution of income.  0 represents perfect equality (everyone has the same income).  1 represents perfect inequality (one person has all the income, and everyone else has none). 201

Consider the following statements:1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India.2. A value of 1 for Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population.Which of the statements given above is/are correct?

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Consider the following statements:1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India.2. A value of 1 for Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population.Which of the statements given above is/are correct?

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