Consider the following statements:
Which of the statements given above is/are correct?
Statement 1 is correct. The repo rate is the interest rate at which commercial banks borrow funds from the Reserve Bank of India (RBI) by pledging government securities. This is a short-term borrowing mechanism used by banks to meet their liquidity requirements, and it is a key instrument of the RBI's monetary policy.
Statement 2 is incorrect. The Gini coefficient is a measure of income or wealth inequality within a nation or social group. A value of 0 for the Gini coefficient indicates perfect income equality, where everyone in the population has the same income. Conversely, a value of 1 (or 100%) indicates perfect income inequality, where one person possesses all the income, and the rest have none. Therefore, the statement's interpretation of a Gini coefficient of 1 is reversed.
Option (b) is incorrect because Statement 2 is factually wrong regarding the interpretation of the Gini coefficient.
Option (c) is incorrect as Statement 2 is incorrect.
Option (d) is incorrect because Statement 1 correctly defines the repo rate.