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The monetary policy in India uses which of the following tools?
1. Bank rate
2. Open market operations
3. Public debt
4. Public revenue
Select the correct answer using the code given below.
  • a)
    1 and 2 only
  • b)
    2 and 3 only
  • c)
    1 and 4 only
  • d)
    1, 2, 3 and 4
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
The monetary policy in India uses which of the following tools?1. Bank...
The correct answer is1 and 2 only
Monetary policy is the macroeconomic policy laid down by the central bank.
  • It involves the management of the money supply and interest rate
  • It is used to achieve macroeconomic objectives like inflation, consumption, growth and liquidity.
Monetary policy in India is governed by RBI through various tools like
  • Cash Reserve Ratio
  • Statutory Liquidity Ratio
  • Open market operations
  • Bank rate
  • Moral suasion

Note: According to the fourth bimonthly policy of 2018-19, CRR is 4 and SLR is 19.5%
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