1. Business is the product of environment:

Business is an integral part of the environment in which it operates. The environment has a significant impact on businesses and, in turn, businesses also shape the environment. A favorable environment can help businesses grow, while an unfavorable environment can hinder their growth. The environment includes various factors such as economic, social, cultural, legal, political, technological, and ecological factors that influence business operations.

Relationship between business and environment:

The relationship between business and environment is symbiotic – businesses depend on the environment for resources and a market, and the environment depends on businesses for economic growth and employment generation. Businesses need to ensure that their operations are sustainable and do not harm the environment. Similarly, the environment needs to be protected for future generations, and businesses need to play their part in this regard.

2. Role and Instruments of Monetary Policy in India:

Monetary policy is a policy implemented by the central bank of a country to control the money supply and interest rates in the economy. The Reserve Bank of India (RBI) is responsible for formulating and implementing monetary policy in India. The primary objective of monetary policy in India is to maintain price stability while promoting growth and development.

Role of Monetary Policy in India:

- To regulate the supply of money in the economy
- To regulate the cost of credit
- To control inflation
- To promote economic growth and development

Instruments of Monetary Policy in India:

- Cash Reserve Ratio (CRR): It is the percentage of deposits that banks are required to keep with the RBI. By changing the CRR, the RBI can control the money supply in the economy.
- Statutory Liquidity Ratio (SLR): It is the percentage of deposits that banks are required to keep in the form of liquid assets such as government securities. By changing the SLR, the RBI can control the credit availability in the economy.
- Repo Rate: It is the rate at which the RBI lends money to banks. By changing the repo rate, the RBI can influence the cost of credit in the economy.
- Reverse Repo Rate: It is the rate at which banks lend money to the RBI. By changing the reverse repo rate, the RBI can influence the liquidity in the economy.

In conclusion, monetary policy plays a crucial role in maintaining the stability of the Indian economy. The RBI uses various instruments to control the money supply, credit availability, and interest rates in the economy. These instruments help in promoting economic growth while ensuring price stability.