ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which is not an example of shocks outside the control of the Central Bank
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Monetary Policy
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Changes in bank capital requirements
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Changes in the global economy and changes in commodity price
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In fiscal policy
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Explanation:
Detailed explanation-1: -Public Debt does not fall in the ambit of RBI and can never be a part of monetary policy.
Detailed explanation-2: -A monetary policy shock occurs when a central bank changes, without sufficient advance warning, its pattern of interest rate or money supply control. A fiscal policy shock is an unexpected change of government spending or taxation amounts.
Detailed explanation-3: -Based on the above discussion we can conclude that, reducing fiscal deficit is not an objective of the Monetary Policy of Reserve Bank of India.
Detailed explanation-4: -Detailed Solution. The correct answer is option 2, i.e., MSP. MSP is NOT an instrument of RBI’s Monetary Policy.
There is 1 question to complete.