Which of the following is NOT a tool of monetary policy used by the RBI?
Practice Questions
Q1
Which of the following is NOT a tool of monetary policy used by the RBI?
Cash Reserve Ratio (CRR)
Statutory Liquidity Ratio (SLR)
Open Market Operations (OMO)
Income Tax Rate
Questions & Step-by-Step Solutions
Which of the following is NOT a tool of monetary policy used by the RBI?
Step 1: Understand what monetary policy is. It refers to the actions taken by a central bank, like the RBI, to control the money supply and interest rates in the economy.
Step 2: Identify the tools of monetary policy used by the RBI. Common tools include the repo rate, reverse repo rate, cash reserve ratio (CRR), and open market operations.
Step 3: Recognize what fiscal policy is. Fiscal policy involves government spending and tax policies, which are not controlled by the RBI.
Step 4: Look at the options given in the question. Determine which option is related to fiscal policy rather than monetary policy.
Step 5: Conclude that the Income Tax Rate is a fiscal policy tool, not a monetary policy tool used by the RBI.
