ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Reserve requirement
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Corporate tax rate
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Discount rate
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Open market operations
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Detailed explanation-1: -The correct answer is Direct Tax rate cut.
Detailed explanation-2: -Out of the given options, deficit financing is not a monetary tool.
Detailed explanation-3: -The 6 tools of monetary policy are reverse Repo Rate, Reverse Repo Rate, Open Market Operations, Bank Rate policy (discount rate), cash reserve ratio (CRR), Statutory Liquidity Ratio (SLR).
Detailed explanation-4: -There are two forms of monetary policy, i.e., the contractionary and expansionary policy. The tools or measures initiated by the central bank under this policy include changes in the discount rate, open market operations and reserve requirements.
Detailed explanation-5: -Monetary Policy is concerned with government’s attempts to provide a more stable economy by regulating the rate of growth of the money supply.