Question

The macroeconomic policy tool that involves the use of monetary instruments by the central bank to regulate the availability of credit in the market, to achieve the ultimate objective of economic policy is known as

• A. Fiscal Policy of RBI
• B. Credit Control Policy of RBI
• C. Monetary Policy of RBI
• D. Cash Reserve Policy of RBI

Answer 1

Answer:

C. Monetary Policy of RBI

Monetary Policy of RBI:

• It is a macroeconomic policy tool used by the Central Bank to influence the money supply in the economy, to achieve certain macroeconomic goals.
• It involves the use of monetary instruments by the central bank to regulate the availability of credit in the market, to achieve the ultimate objective of economic policy.

Types of Monetary Policy:

• Expansionary Monetary Policy
• Contractionary Monetary Policy.