With reference to the Indian economy, consider the following: 1) Bank rate 2) Open market operations 3) Public debt 4) Public revenue Which of the above is/are the component/components of Monetary Policy?

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CollectorBabu · Accepted Answer

Correct Answer: 1 and 2. Monetary policy is the macroeconomic policy laid down by the central bank. It refers to the use of monetary instruments under the control of the central bank to influence variables, such as interest rates, money supply and availability of credit, to achieve the objectives of the policy. The components of Monetary policy includes bank rate variations, open market operations and changing reserve requirements, so 1 and 2 are correct, hence option C is correct. Public debt and Public revenue are related to Fiscal policy as these are taxes and expenditures used by the government in order to manipulate the economy, so 3 and 4 are incorrect, which eliminates option B and D.

With reference to the Indian economy, consider the following: 1) Bank rate 2) Open market operations 3) Public debt 4) Public revenue Which of the above is/are the component/components of Monetary Policy?

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