A) Reverse repo operation by RBI aims at injecting/increasing liquidity.
B) SDR refers to Special Drawing Rights
C) Rupee appreciation results in decrease in imports.
D) Increase in inflation rate leads to decline in real interest rate.
Correct Answer: C
Solution :
[c] If Rupee depreciates (For example, when US$-INR moves from Rs. 60/- to Rs. 65/ Imports become costly as for each USD we have to pay Rs5/- more. If Rupee appreciates (For example, when US$-INR moves from Rs. 60/- to Rs. 511- Imports become cheaper as for each USD we have to pay Rs. 3 less.
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