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RBI & monetary policy

Economy9 of 11 papers14 questions

What UPSC asks

  1. Which way RBI moves a toolExpansionary policy, high inflation, a falling rupee, sterilisation
  2. Basic money ideasMoney multiplier, legal tender, how a cash withdrawal affects money supply
  3. RBI's legal powersWho appoints the Governor, lender of last resort, sources of income
  4. Who sets the policy rateThe MPC: what it decides, its size, who chairs it

Asked again and again

What raises the money multiplier20192021Asked almost word for word twice
What RBI would do here202020222023 Q222023 Q24RBI's response to a given situation
RBI's powers and legal basis20172021 Q12021 Q1520222025Its functions and what the law gives it
What counts as money20182020Money and money supply

How to study it

  1. For each tool, note whether it adds or removes money from the system.
  2. Practise "if X happens, what does RBI do?" out loud.
  3. Note what the RBI Act gives RBI and the Government, and RBI's income sources.

Hardly ever askedCurrent repo or reverse repo rate values

Written by AI from this area's own questions; not yet reviewed by a person. Counts come straight from the questions.