ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Central banks conduct monetary policy by adjusting the supply of money, usually through buying or selling securities in the open market. Open market operations affect short-term interest rates, which in turn influence longer-term rates and economic activity.

Detailed explanation-2: -The Federal Reserve conducts the nation’s monetary policy by managing the level of short-term interest rates and influencing the availability and cost of credit in the economy. Monetary policy directly affects interest rates; it indirectly affects stock prices, wealth, and currency exchange rates.

Detailed explanation-3: -The Reserve Bank of India (RBI) controls the monetary policy. The Monetary Policy Committee (MPC) is assisted by the Monetary Policy Department of the Reserve Bank of India in formulating the monetary policy.

Detailed explanation-4: -Supervising and Regulating Financial Institutions and Activities. The Federal Reserve promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole.