Question

which of the following is not an instrument of monetary policy ?

(1 Point)

Open market operation

Bank Rate

selective credit control

Gvt spending

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Answer 1

Answer:

gvt spending

Explanation:

government expenses are not included in monetary policy as it doesn't help to develop economy.

Answer 2

Government spending is not an instrument of Monetary Policy. option(d)

Monetary policy

It is the method through which the Reserve Bank of India (RBI) controls the money supply in the economy and uses monetary instruments within its control to fulfill the objectives set out in the RBI Act of 1934.

Monetary Policy Instruments:

• Open market operation: The Reserve Bank of India purchases and sells government securities on the open market.

• Bank Rate: The rate at which the Reserve Bank of India purchases rediscount bills of exchange or other commercial papers is known as the bank rate. (BR=MSF) Aligned to the MSF rate (4.25%).

• Selective credit control: Selective Credit Control (SCC) is a method of limiting the amount of credit given or distributed by commercial banks.