ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bank rate
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Open market operation
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Selective credit control
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Government spending
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Detailed explanation-1: -Hence, the Call money rate is NOT an instrument of monetary policy in India. The call money rate at which short-term funds are borrowed and lent in the money market.
Detailed explanation-2: -Out of the given options, deficit financing is not a monetary tool.
Detailed explanation-3: -The correct answer is option 2, i.e., MSP. MSP is NOT an instrument of RBI’s Monetary Policy.
Detailed explanation-4: -Ans. The various different tools and instruments of monetary policy are as follows: cash reserve ratio, statutory liquidity ratio, bank rate, repo rate, reserve repo rate and open market operations.
Detailed explanation-5: -Repo Rate: The (fixed) interest rate at which the Reserve Bank provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).