📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

  • google app store apple app store
  • ✖

      Question

      Consider the following statements: Statement-I:

      Monetary Policy is different from Fiscal Policy which is managed by the Ministry of Finance and measures the spending and taxation in the Indian Economy. Statement-II: Monetary Policy is formed and managed by the Reserve Bank of India to control a nation's overall money supply and achieve economic growth. Which one of the following is correct in respect of the above statements?
      A Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I Correct Answer Incorrect Answer
      B Statement-I is correct but Statement-II is incorrect Correct Answer Incorrect Answer
      C Statement-I is incorrect but Statement-II is correct Correct Answer Incorrect Answer
      D Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement I Correct Answer Incorrect Answer

      Solution

       Monetary policy is a set of actions taken by a country's central bank to control the money supply and interest rates.    Monetary policy is different from Fiscal Policy which is managed by the Ministry of Finance and measures the spending and taxation in the Indian Economy. Hence, statement I is correct.   Monetary Policy is formed and managed by the Reserve Bank of India to control a nation's overall money supply and achieve economic growth. Hence, statement II is correct.   The MPC determines the policy repo rate required to achieve the inflation target while other decisions are taken by the RBI.  Hence, option B is correct because both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I.   

      Practice Next
      ask-question