Economics · Monetary Economics
Assertion (A): According to the Radcliffe-Sayers thesis, controlling the money supply alone is insufficient for effective monetary policy. Reason (R): Non-bank financial intermediaries can activate idle deposits and raise velocity (V), offsetting central bank restrictions on money supply (M) and leaving total liquidity largely flexible. Choose the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is false, R is true
- 2A is true, R is false
- 3Both A and R are true, but R is not the correct explanation of A
- 4Both A and R are true, and R is the correct explanation of A✓
Correct answer
Both A and R are true, and R is the correct explanation of A
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