Which of the following is a quantitative tool of monetary policy used by the RBI

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Question: Which of the following is a quantitative tool of monetary policy used by the RBI?

Options:

Correct Answer: Open market operations

Solution:

Open market operations are a quantitative tool used by the RBI to control the money supply by buying or selling government securities.

Which of the following is a quantitative tool of monetary policy used by the RBI?

Which of the following is a quantitative tool of monetary policy used by the RBI?

Step 1: Understand what monetary policy is. It is how a central bank, like the RBI, controls the money supply in the economy.
Step 2: Learn about quantitative tools of monetary policy. These are methods used to manage the amount of money circulating in the economy.
Step 3: Identify one of the quantitative tools used by the RBI. One such tool is open market operations.
Step 4: Know what open market operations involve. It means the RBI buys or sells government securities (like bonds) to increase or decrease the money supply.
Step 5: Recognize that when the RBI buys securities, it puts more money into the economy, and when it sells them, it takes money out of the economy.

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