An economics teacher was explaining the concept of policy adopted by Reserve Bank of India in the direction of credit control
An economics teacher was explaining the concept of policy adopted by Reserve Bank of India in the direction of credit control. Choose the correct alternative which specifies towards the concept explained by him.
(a) Fiscal Policy
(b) Credit Policy
(c) Monetary Policy
(d) None of these
Anurag Pathak Changed status to publish January 5, 2024
Ans – (c)
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 issue, it can control credit and supply of money.
For this, RBI makes use of the following instruments of Monetary Policy:
1. Repo (Repurchase) Rate:
2. Bank Rate (or Discount Rate):
3. Reverse Repo Rate (or Reverse Repurchase Rate):
4. Open Market Operations
5. Legal Reserve Requirements
6. Margin Requirements
7.
Anurag Pathak Changed status to publish January 5, 2024
