Which of the following is a quantitative tool of monetary policy used by the RBI
Practice Questions
Q1
Which of the following is a quantitative tool of monetary policy used by the RBI?
Open market operations
Moral suasion
Credit control
Public debt management
Questions & Step-by-Step Solutions
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.
