Cheap money policy is followed __________.

to counter inflation

No worries! We‘ve got your back. Try BYJU‘S free classes today!

to reverse depression

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

to appease the public

No worries! We‘ve got your back. Try BYJU‘S free classes today!

to increase disposal income of the households

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C to reverse depression
Cheap money policy refers to a monetary policy by the central bank where the central bank sets low interest rates so that credit is easily available to the general public in order to bring efficiency in trade and commerce in an economy. Such a policy is used by the government at the time of depression in the economy as it increases the money supply in the economy which reverses depression.

Suggest Corrections

Similar questions

In November of 2010, the US Central Bank, the Federal Reserve, embarked on a policy of quantitative easing. Since this policy essentially represents an increase in the supply of money, it may create inflationary expectations. Let’s assume (and this is a strong assumption), that as a result of this polic y, US households start to expect inflation (price increases) in the housing market. The effect on the housing market will be:

Q. Cheap money policy is followed to _______.

Q. This question is based on the following pie chart showing percentage of money spend on household items by a representative family.

If the income of a family increase by Rs. 1000 P.M., then the, amount spent (in rupees) on Electricity should increase by nearly

Which of the following is a true statement?

i. National income refers to the income of individuals of a country

ii.The income at their disposal after paying direct taxes is called disposable income

Q. Cheap money policy means __________.

Join BYJU'S Learning Program