If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do? 1. Cut and optimize the Statutory Liquidity Ratio (SLR) 2. Increase the Marginal Standing Facility (MSF) Rate 3. Cut the Bank Rate and Repo Rate Select the correct answer using the code given below: |ForumIAS

[A] 1 and 2 only

[B] 2 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: B

Notes:

Explanation:

Expansionist monetary policy aims to increase money supply and boost economic activity.

Statement 1 is incorrect: Cutting the SLR is consistent with expansionist policy as it frees up funds for lending.

Statement 2 is correct: Increasing the MSF Rate is a contractionary measure and not aligned with an expansionist stance.

Statement 3 is incorrect: Cutting the Bank Rate and Repo Rate is typical of expansionist policy to make borrowing cheaper.

Source- IE

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