Question

In the present COVID-19 times, many economists have raised their concerns that Indian economy may have to face a deflationary situation, due to reduced economic activities in the country. 

Suppose you are a member of the high powered committee constituted by the Reserve Bank of India (RBI). 

You have suggested that as the supervisor of commercial banks, ................ (restriction/release) of the money supply be ensured, by the Reserve Bank of India (RBI).

Answer 1

Answer is:

Release

Answer 2

RBI should release money. It will increase the supply of money in the hsnds of the public and eventually increase production activities.