Consider the following statements:

1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India.
2. A value of 1 or Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population.

Which of the statements given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Explanation

Statement 1 is correct

• The repo rate (short for repurchase rate) is the interest rate at which a country’s central bank (like the Reserve Bank of India) lends short-term funds to commercial banks.

Statement 2 is incorrect

• The Gini coefficient is a statistical measure used to assess the distribution of income, wealth, or resources in a population. It ranges from 0 to 1, where 0 indicates perfect equality and 1 indicates maximum inequality. The Gini index is the same value multiplied by 100 (ranging from 0 to 100).

Answer: (a) 1 only