ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Growth with Stability
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Reduce Poverty and Achieve Stability
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Overall Monetary Stability
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None of These
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Detailed explanation-1: -Answer: The primary objectives of the monetary policy in India are: Growth with Stability. Regulation, Supervision, and also Development of Financial Stability. Promoting Priority Sector.
Detailed explanation-2: -“…the primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.”
Detailed explanation-3: -The primary objective of monetary policy is Price stability. The price stability goal is attained when the general price level in the domestic economy remains as low and stable as possible in order to foster sustainable economic growth.
Detailed explanation-4: -The case of price stability as the objective of monetary policy rests on the fact that volatility in prices creates uncertainty in decision making. Rising prices affect savings adversely while making speculative investments more attractive.
Detailed explanation-5: -Monetary policy has a strong influence over interest rates in the economy, including the lending and deposit rates faced by households and businesses. In turn, these interest rates influence economic activity, employment and inflation.