Question
With reference to Indian economy, consider the
following— 1. Bank rate 2. Open market operations 3. Public debt 4. Public revenue Which of the above is/are component/components of Monetary Policy?Solution
The Reserve Bank of India (RBI) uses the monetary policy to manage liquidity or money supply in a manner that balances inflation and at the same time aids growth. The tools RBI uses to manage monetary policy are : 1. Repo and Reverse Repo Rate. 2. Cash Reserve Ratio (CRR). 3. Open Market Operations. 4. Statutory Liquidity Ratio. 5. Bank Rate.
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