| 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. |
A) 1 only
B) 2 only
C) Both 1 and 2
D) Neither 1 nor 2
Correct Answer: A
Solution :
Repo Rate is the rate at which commercial banks borrow funds from RBI. A reduction in the repo rate will help banks to get money from the central bank at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive. A value of (0) for Gini Coefficient in a country implies that there is perfect equality in the system. If the value is 1 then there is complete inequality in the country.
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