With reference to India economy consider the following 1 Bank rate 2 Open market operations 3 Public...........

Economic Affairs Money Supply and Monetary Policy

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With reference to India economy, consider the following:

1.Bank rate

2.Open market operations

3.Public debt

4.Public revenue

How many of the above is/are component/components of Monetary Policy?

Only One

Only Two

Only Three

All Four

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Explanation:

1 and 2

Bank Rate: Bank rate is a component of monetary policy. It is the rate at which the central bank (RBI in the case of India) lends money to commercial banks. It influences the general level of interest rates and is a tool used to control money supply in the economy.

Open Market Operations: Open market operations are another component of monetary policy. It involves the buying and selling of government securities by the central bank in the open market to control the money supply.

Public Debt: Public debt is not directly a component of monetary policy. Public debt refers to the total outstanding borrowings of the government. While the management of public debt can have implications for monetary policy, it is not a tool used directly in the implementation of monetary policy.

Public Revenue: Public revenue is not a component of monetary policy. Public revenue refers to the funds generated by the government through taxes and other sources. Monetary policy focuses on regulating the money supply and interest rates to achieve macroeconomic objectives.