Question

Monetary Policy is the policy of the ______ to control money supply and credit creation in the economy.

• A. Central Government
• B. Central Bank
• C. Both (a) and (b)
• D. None of these

Answer 1

The correct option is B Central Bank

The central bank adopts various measures to control the supply of money in the economy. Largely, these measures relate to credit supply by the commercial banks. Monetary policy of the central bank is often known as credit control policy. For example, in India, RBI makes implements the monetary policies in the economy to check the credit creation capacity of the commercial banks.