CUET Economics 2025 3 June Shift 2 PYQs

When the interest rate is very high, newspapers and media channels are predicting that it may fall in future and hence anticipate capital gains from bond-holdings. Hence, people convert their money into bonds.

In the above statement, which motive of money is highlighted?

1. Transaction Motive
2. Speculative Motive
3. Demonetisation Motive
4. Precautionary Motive

Why does central bank is called the lender of last resort?

1. It lends money to the government to finance its budget deficit.
2. Central bank lends money to trade and industry to support their export operations.
3. When a country runs out of money, the central bank prints more money.
4. Central bank lends money to banks at all times.

During the period of COVID, there was an apprehension that the Indian economy might slip into recession. Therefore, to combat the situation, the Reserve bank of India reduced the Repo rate by 110 basis points. Arrange the consequences of the same in sequential order.

(A) Increase in aggregate demand.

(B) Reduction in the market lending rate by commercial banks.

(C) Increase in money supply.

(D) Increase in borrowings by the public.

Choose the correct answer from the options given below: