Reserve Bank of India cuts Interest Rate after Inflation fall , Slow Down


The article reports the steep fall in Inflation figures leading the Reserve Bank, the Central Bank of India , to reduce the Interest Rate . Though the Inflation has been reported low, the Food and Fuel Inflation is yet to configure in the overall Inflation numbers explaining the conservative 25 basis point decrease instead of the expected 50 basis point decrease in the Interest rates.


Topics covered are Interest rates, Inflation, relationship between Interest rates and Inflation, Expansionary Monetary policy and its consequences. Explain using the National output diagrams and discuss the combined effect of Expansionary monetary policy on Inflation, Economic Growth and unemployment.


Evaluation will include effectiveness of Monetary policy to tackle Inflation and its further effects on Unemployment, Economic Growth , impact on the consumers, producers and society in short term and long term.