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      Question

      Which among the following is NOT a qualitative measure

      of monetary policy undertaken by the RBI in India?
      A Moral Suasion Correct Answer Incorrect Answer
      B Direct Action Correct Answer Incorrect Answer
      C Reduction in Repo Rates Correct Answer Incorrect Answer
      D Both A and B Correct Answer Incorrect Answer
      E All A, B and C Correct Answer Incorrect Answer

      Solution

      Qualitative Measures are also adopted by the RBI to control the money supply in the economy. There are various measures for this: Margin Requirement, Rationing of Credit, Moral Suasion, Direction Action etc. Repo Rate and Reverse Repo Rate, LAF, MSF etc are quantitative measures adopted by RBI for this purpose. The quantitative instruments are also known as general tools used by the RBI (Reserve Bank of India). These instruments are related to the quantity and volume of the money. These instruments are designed to control the total volume/money of the bank credit in the economy. These instruments are indirect in their nature and are used to influence the quantity of credit in the economy.

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