Monetary Policy is the policy of:
Monetary Policy is the policy of:
(a) Commercial Bank
(b) Central Government
(c) Central Bank
(d) State Government
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Ans – (c)
Monetary Policy is the policy of the Central Bank.
Explanation:-
The Reserve Bank of India (RBI) is empowered to regulate the money supply in the economy through its ‘Monetary Policy’.
It is the policy adopted by the Central Bank of an economy in the direction of credit control or money supply.
As RBI has the sole monopoly in currency issues, it can control credit and supply of money.
For this, RBI makes use of the following instruments of Monetary Policy.
1. Repo Rate
2. Bank Rate
3. Reverse Repo Rate
4. Open Market Operations
5. Legal Reserve Requirements
6. Margin Requirements
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