BUSINESS ADMINISTRATION
BUSINESS POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The BSP’s primary mandate
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Refers to low and stable inflation
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Preserves purchasing power
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All of the above
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Detailed explanation-1: -Price stability is the condition in which the domestic currency retains its purchasing power by maintaining low and stable inflation as measured by the Consumer Price Index over the medium term (from 3 to 5 years). Price stability does not imply that prices do not change; it means that prices grow at a moderate pace.
Detailed explanation-2: -Under the Reserve Bank of India, Act, 1934 (RBI Act, 1934) (as amended in 2016), RBI is entrusted with the responsibility of conducting monetary policy in India with the primary objective of maintaining price stability while keeping in mind the objective of growth.
Detailed explanation-3: -Louis Fed glossary help lay it out: Inflation is a general, sustained upward movement in the prices of goods and services in an economy. Price stability is a low and stable rate of inflation maintained over an extended period of time.