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      Question

      With reference to Indian economy, consider the

      following— 1. Bank rate 2. Open market operations 3. Public debt 4. Public revenue Which of the above is/are component/components of Monetary Policy?
      A 1 only Correct Answer Incorrect Answer
      B 2, 3 and 4 Correct Answer Incorrect Answer
      C 1 and 2 Correct Answer Incorrect Answer
      D 1, 3 and 4 Correct Answer Incorrect Answer
      E None of the these Correct Answer Incorrect Answer

      Solution

      The Reserve Bank of India (RBI) uses the monetary policy to manage liquidity or money supply in a manner that balances inflation and at the same time aids growth. The tools RBI uses to manage monetary policy are : 1. Repo and Reverse Repo Rate. 2. Cash Reserve Ratio (CRR). 3. Open Market Operations. 4. Statutory Liquidity Ratio. 5. Bank Rate.

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