Negative Interest Rate Policy:

  1. is a fiscal policy which government uses to affect the economy
  2. aims to reduce inflationary pressure in the economy

  Which of the above statements is/are correct?

Answer: [D] Neither 1 nor 2

First statement is incorrect because it is an unconventional monetary policy tool exercised by central bank of a country. Second statement is again incorrect because negative interest rate policy is used to curb the problem of deflation.

This question is a part of GKToday's Integrated IAS General Studies Module