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Quantitative measures/instruments of monetary policy (Policy of Central Bank) focuses on:
quantity of money across selected sectors of the economy
Quantity of money in the economy
inflationary and deflationary gaps in the economy
Both b) and c)
- Quantitative measures/instruments of monetary policy, like bank rate, open market operations, and cash reserve ratio, control the overall supply or quantity of money in the whole economy.
- Option 1: Controlling money across "selected sectors" refers to *qualitative* or selective instruments, not quantitative ones.
- Option 2: Correct. Quantitative measures aim at controlling the quantity of money in the entire economy.
- Option 3: Partially correct—the ultimate target of these policies can be inflationary or deflationary gaps, but the direct focus is on the overall money supply, not just price gaps.
- Option 4: Incorrect, because only Option 2 clearly fits.
Correct answer: Option 2, "Quantity of money in the economy."
By: santosh ProfileResourcesReport error
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