Economics · Monetary Policy in India
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: The Monetary Policy Committee (MPC) independently sets the official inflation target to ensure unbiased monetary policy management and price stability. Reason R: Under the formal inflation targeting framework, the government sets the inflation target based on the Consumer Price Index (CPI), and the MPC is mandated to achieve it using the repo rate. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is correct but R is not correct
- 2A is not correct but R is correct✓
- 3Both A and R are correct but R is NOT the correct explanation of A
- 4Both A and R are correct and R is the correct explanation of A
Correct answer
A is not correct but R is correct
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