What is the role of the Reserve Bank of India (RBI) in fiscal management?
Practice Questions
Q1
What is the role of the Reserve Bank of India (RBI) in fiscal management?
Setting fiscal policy
Managing government accounts
Regulating stock markets
Controlling inflation directly
Questions & Step-by-Step Solutions
What is the role of the Reserve Bank of India (RBI) in fiscal management?
Step 1: Understand that the Reserve Bank of India (RBI) is the central bank of India.
Step 2: Know that fiscal management involves how the government manages its money, including spending and borrowing.
Step 3: Recognize that the RBI helps the government by managing its accounts, which means keeping track of the money the government has.
Step 4: Learn that the RBI also helps the government borrow money when needed, which is important for funding various projects and services.
Step 5: Conclude that by managing accounts and facilitating borrowing, the RBI plays a key role in helping the government manage its finances effectively.
