The case for price stability as the dominant objective of monetary policy in India rests on certain assumptions. Which one of the following is not a correct assumption?

Volatility in prices creates uncertainly in decision making

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

Rising prices make speculative investment more attractive

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

Rising prices favorable climate for promoting savings and for making optical allocation resources have no hedge against inflation

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

Rising prices affect adversely those who don't have the money power

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

Open in App

Solution

The correct option is B Rising prices favorable climate for promoting savings and for making optical allocation resources have no hedge against inflation
Volatility in prices creates uncertainty in decision making is not correct assumption in relation with price stability as the dominant objective of monetory police in India, hence option(c) is not correct.

Suggest Corrections

Similar questions

Consider the following statements and choose the option which is correct.

(1) Inflation targeting focuses mainly on achieving price stability as the ultimate objective of Monetary policy.

(2) Monetary policy & fiscal policy have to converge for achievement of inflation targeting.

(3) The basket of items in CPI does not include machinery, chemicals etc.

Join BYJU'S Learning Program