The monetary policy in India uses which of the following tools 1 Bank rate 2 Open market operations ...........

Indian Economy (CDS) Economy

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The monetary policy in India uses which of the following tools?

1. Bank rate

2. Open market operations

3. Public debt

4. Public revenue

Select the correct answer using the code given below.

1 and 2 only

2 and 3 only

1 and 4 only

1, 2, 3 and 4

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Explanation:

Monetary policy is a process through which RBI controls the input and output of money in the economy, thus regulating the inflation. Bank rate is the rate of interest on which the RBI provides loan or funds to the commercial banks. It is also called discount rate. The present bank rate is 6.25% Bank needs to keep a certain percentage of bank deposits with the RBI in the form of reserves and balance. The present bank rate is 4%.